Supply Chain Costs Weigh on General Mills's Bottom Line -- Earnings Review
March 21 2018 - 8:18AM
Dow Jones News
By Imani Moise
The Minneapolis-based food conglomerate General Mills Inc.
reported third-quarter results before the opening bell Wednesday.
Here's what you need to know:
EARNINGS. The maker of Cheerios and Hamburger Helper reported
adjusted earnings of 79 cents a share, up from 72 cents a year
earlier. Analysts polled by Thomson Reuters had forecast 78 cents a
share.
REVENUE: Sales rose 2.3% to $3.88 billion, ahead of the
consensus forecast from analysts of $3.78 billion. Organic net
sales rose 1%.
EXPENSES: Rising costs outpaced sales growth in the most recent
quarter. General Mills's cost of sales jumped 5.7% and the company
attributed much of increase on higher freight rates and commodity
prices. Chief Executive Jeff Harmening said the company has
launched initiatives to mitigate inflation, including increasing
its number of freight carriers and using different modes of
transportation.
OUTLOOK: The company also lowered its outlook for the year to
reflect higher supply-chain costs. It now expects constant-currency
operating profit to drop 5% to 6%, compared with its previous
expectation of being flat to falling 1%. The company still expects
organic net sales to be in line with the previous fiscal year.
STOCK MOVE: Shares, which have fallen 17% over the past year
while the S&P 500 has gained 14%, fell 6.8% to $46.55 during
premarket trading.
Write to Imani Moise at imani.moise@wsj.com
(END) Dow Jones Newswires
March 21, 2018 08:03 ET (12:03 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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