General Mills Continues to Face Declining Sales
March 21 2017 - 9:37AM
Dow Jones News
By Joshua Jamerson
General Mills Inc.'s sales were hurt in the latest quarter by
declines in its U.S. yogurt and convenience meal businesses, the
latest sign that the food giant is struggling to lift demand amid
shifting consumer tastes.
The Minneapolis company said fiscal third-quarter sales in its
North American retail segment, the company's largest, fell 7%
compared with a year ago, dragged down by double-digit declines in
its U.S. meals and baking and yogurt categories.
The meals and baking category includes products under the
Helper, Progresso, Old El Paso, Totino's, Betty Crocker and
Pillsbury brands.
The decline in sales was larger than Wall Street expected, and
shares fell 2.2% to $58.91 in premarket trading.
General Mills also booked $78 million in restructuring and
impairment charges, which dented profit. However, excluding
restructuring and other charges, the company's bottom line rose to
72 cents a share from 65 cents a share in the year-prior third
quarter. Analysts polled by Thomson Reuters expected per-share
profit of 71 cents.
Last month, the company cut an already-downbeat forecast for
sales and earnings in its current year, blaming weak sales in the
U.S. for yogurt and soup. General Mills has been trying to win back
consumers who have ditched traditional processed foods like its
Yoplait yogurt for more natural alternatives.
Lower food costs and other savings had for a while helped
General Mills deliver solid earnings despite the lower sales, but
analysts have raised concerns that sales declines are catching up
with the cost reductions. On Tuesday, the company affirmed the
financial outlook it provided last month.
Over all, for the quarter that ended Feb. 26, General Mills
reported net income of $357.8 million, down 1.1% from $361.7
million in the year-ago period. On a per-share basis, net income
rose to 61 cents a share from 59 cents, aided by a lower
outstanding share count.
Net sales fell 5% to $3.79 billion, lower than analysts'
estimates of $3.82 billion.
Selling, general, and administrative expenses declined 9%
compared with the prior-year quarter.
Write to Joshua Jamerson at joshua.jamerson@wsj.com
(END) Dow Jones Newswires
March 21, 2017 09:22 ET (13:22 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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