GIS General Mills Inc

By Annie Gasparro 

General Mills Inc. raised revenue expectations after U.S. sales of its snacks and cereal improved in the latest quarter.

The maker of Cheerios and Hamburger Helper has struggled as consumers shy away from processed foods. Missteps with brands like its Yoplait yogurt also have dragged down sales in recent years.

Chief Executive Jeff Harmening, who assumed that role in June, said stronger innovation and better marketing helped General Mills gain market share. U.S. cereal sales increased 7% and U.S. snacks sales rose 5% in the latest quarter, helped by new Chocolate Peanut Butter Cheerios and Nature Valley granola bars.

General Mills now expects comparable sales for the year ending in May to be flat to down 1%, from an earlier estimate of down 1% to 2%. Shares were up slightly in premarket trading Wednesday.

Mr. Harmening, who was previously chief operating officer and head of the North America business, made reviving General Mills' cereal and yogurt businesses his top priorities. Mr. Harmening has said consumer priorities have shifted from weight management to simpler ingredients, hurting brands such as Yoplait.

The company is adjusting its recipes to meet the new demands, but its latest results also underscore a persistent desire for indulgent treats. Classics like Lucky Charms and Cinnamon Toast Crunch have sold better recently, even though they are sugary and considered unhealthy by many.

General Mills yogurt sales were still down 11% in North America, but that marks a major improvement from the summer. Mr. Harmening said new French-style yogurt, Oui by Yoplait, which is sold in glass jars with no artificial ingredients, has helped.

General Mills' revenue rose 2.1% in the second quarter to $4.2 billion. Profit for the quarter ended Nov. 26 fell to $430.5 million from $481.8 million the prior year. But excluding one-time items, adjusted earnings of 82 cents matched analysts' expectations according to FactSet, while revenue results topped their projection.

Allison Prang contributed to this article.

Write to Annie Gasparro at annie.gasparro@wsj.com

(END) Dow Jones Newswires

December 20, 2017 09:27 ET (14:27 GMT)

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