Plummeting Yogurt Sales Drag General Mills' Earnings
20 September 2017 - 10:58PM
Dow Jones News
By Cara Lombardo
General Mills's sales slid 4% in its latest quarter as the food
maker faced double-digit drops in yogurt sales and a continued
consumer shift away from breakfast cereals.
The Minneapolis-based company, whose brands range from Fiber One
to Häagen-Dazs, reported revenue of $3.77 billion in the quarter
ended Aug. 31, down from $3.93 billion a year ago. Net income was
$404.7 million, down from $409 million a year ago.
The company's adjusted earnings per share of 71 cents was 5
cents less than analysts polled by Thomson Reuters expected,
prompting shares in the company to drop 4.9% premarket
Wednesday.
Like many of its peers, the food processor has been retooling
its portfolio to adapt as consumers increasingly favor fresher
foods with shorter ingredient lists over highly processed
options.
The company said declines in sales of its light and Greek
Yoplait yogurt varieties continued to hurt results, although it
said that was partially offset by benefits from its new Oui by
Yoplait French-style yogurt, introduced in June.
The company has vowed to fight declining sales by tweaking
recipes to remove artificial ingredients and building up its
natural-food brands, such as Annie's Homegrown and Lärabar snack
bars.
Still, cereal sales in the U.S. dropped 7% in the company's
latest quarter, while snack sales decreased 2%, partially offset by
growth in sales of brands such as Nature Valley that are marketed
as healthier alternatives.
Chief Executive Jeff Harmening said in prepared remarks that the
company anticipated a slow start to its fiscal year and would focus
on boosting international sales and developing new products.
In its latest quarter, the company saw the largest revenue drops
in the U.S., Asia and Latin America, while sales rose slightly in
Europe and Australia.
The company reaffirmed its forecast that net sales would fall 1%
to 2% this year.
Write to Cara Lombardo at cara.lombardo@wsj.com
(END) Dow Jones Newswires
September 20, 2017 08:43 ET (12:43 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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