GIS General Mills Inc

By Micah Maidenberg 

General Mills Inc. reported weaker-than-expected revenue in its latest quarter, as the packaged-foods company failed to lift sales volume in retail stores in North America.

The maker of Cheerios cereal and Häagen-Dazs ice cream said Wednesday net sales increased 5% from a year earlier to $4.41 billion, less than the $4.51 billion analysts polled by FactSet expected.

Like other packaged-foods companies, General Mills is pushing to attract customers who say they are looking for healthier foods and simpler options. In July, the company said it would focus on what it believes are unique product lines, including its natural and organic brands and its snack bars business, and consider divestitures.

The Minneapolis-based company struggled to reach shoppers in the U.S. and Canada in the latest quarter, as revenue from North American retail stores fell 3% compared with the same period last year to $2.68 billion

Sales volume in the unit, the company's largest, dropped by 4 percentage points. Prices and the company's product mix ticked up 1 percentage point in the unit.

"We're taking actions to strengthen our second-half top-line trends in North America retail, led by U.S. cereal and snacks," Chief Executive Officer Jeff Harmening said in prepared remarks.

General Mills earned a profit of $343 million in the quarter ended Nov. 25, or 57 cents a share, compared with $431 million, or 74 cents a share a year earlier. Adjusted profit of 85 cents a share beat the 81 cents a share analysts expected.

The company took $193 million in impairment charges related to its Progresso, Food Should Taste Good, and Mountain High brands in the quarter primarily because it now expects those product lines to generate weaker sales in the future.

The company's dog food results -- it completed an $8 billion acquisition of Blue Buffalo Pet Products in April -- included sales of $335 million in the latest quarter. But operating profit of $71 million was $18 million lower than the prior year due to cost inflation, lower volume and factory startup costs.

Write to Micah Maidenberg at micah.maidenberg@wsj.com

(END) Dow Jones Newswires

December 19, 2018 07:51 ET (12:51 GMT)

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