GIS General Mills Inc

By Micah Maidenberg 

General Mills Inc. said sales of its snacks as well as its meals and baking products weakened in the U.S. in its latest quarter, dragging down the company's overall revenue.

Minneapolis-based General Mills on Wednesday reported sales of $4 billion in its fiscal first quarter, slightly less than what analysts polled by FactSet predicted. Sales fell 1% when excluding currency fluctuations and the effect of mergers and acquisitions.

Shares of General Mills fell 4% in premarket trading Wednesday.

The company said sales in the U.S. and Canada, its most important market, were flat in the quarter that ended Aug. 25. The maker of Wheaties and Cheerios reported a 1% sales gain of cereals in the U.S., a product category consumers have been turning away from for years.

Demand for snacks, as well as products in its meals and baking business, dropped in the quarter, with sales for both units falling 1% in the U.S. compared with last year. Yogurt sales in the market were flat.

Like other large packaged-food companies, General Mills is trying to figure out how to drive faster sales growth of products amid heightened consumer interest in food perceived as healthier and fresher. Retailers have also introduced more of their own store-brand products, ramping up a longtime competitive threat.

Meanwhile, its yogurt brands, like Yoplait, compete with dozens of other varieties in grocery stores and its Fiber One and Nature Valley snack bars also must try to stand out against competition from a gaggle of other brands.

The company on Wednesday also reported a quarterly profit of $520.6 million, or 85 cents a share, compared with $392.3 million, or 65 cents a share, the year earlier.

After adjustments, the General Mills reported a profit of 79 cents a share, 2 cents more than the 77 cents a share that analysts predicted.

The company also said fiscal first quarter sales in its pet-food business rose 7% from the year earlier to $368 million. That unit includes the Blue Buffalo pet food brand, which General Mills purchased last year for about $8 billion.

General Mills has been expanding distribution of Blue Buffalo products, including to Walmart Inc. stores, creating competition for companies like J.M. Smucker Co., which last year bought the Nutrish pet-food brand.

(END) Dow Jones Newswires

September 18, 2019 07:52 ET (11:52 GMT)

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