GIS General Mills Inc

By Cara Lombardo 

General Mills's sales slid 4% in its latest quarter as the food maker faced double-digit drops in yogurt sales and a continued consumer shift away from breakfast cereals.

The Minneapolis-based company, whose brands range from Fiber One to Häagen-Dazs, reported revenue of $3.77 billion in the quarter ended Aug. 31, down from $3.93 billion a year ago. Net income was $404.7 million, down from $409 million a year ago.

The company's adjusted earnings per share of 71 cents was 5 cents less than analysts polled by Thomson Reuters expected, prompting shares in the company to drop 4.9% premarket Wednesday.

Like many of its peers, the food processor has been retooling its portfolio to adapt as consumers increasingly favor fresher foods with shorter ingredient lists over highly processed options.

The company said declines in sales of its light and Greek Yoplait yogurt varieties continued to hurt results, although it said that was partially offset by benefits from its new Oui by Yoplait French-style yogurt, introduced in June.

The company has vowed to fight declining sales by tweaking recipes to remove artificial ingredients and building up its natural-food brands, such as Annie's Homegrown and Lärabar snack bars.

Still, cereal sales in the U.S. dropped 7% in the company's latest quarter, while snack sales decreased 2%, partially offset by growth in sales of brands such as Nature Valley that are marketed as healthier alternatives.

Chief Executive Jeff Harmening said in prepared remarks that the company anticipated a slow start to its fiscal year and would focus on boosting international sales and developing new products.

In its latest quarter, the company saw the largest revenue drops in the U.S., Asia and Latin America, while sales rose slightly in Europe and Australia.

The company reaffirmed its forecast that net sales would fall 1% to 2% this year.

Write to Cara Lombardo at cara.lombardo@wsj.com

(END) Dow Jones Newswires

September 20, 2017 08:43 ET (12:43 GMT)

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