Sales at General Mills Hurt by Weaker Demand for Snacks, Meals Businesses
18 September 2019 - 10:07PM
Dow Jones News
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)
Copyright (c) 2019 Dow Jones & Company, Inc.
General Mills (NYSE:GIS)
Historical Stock Chart
From Apr 2024 to May 2024
General Mills (NYSE:GIS)
Historical Stock Chart
From May 2023 to May 2024