By Michael Calia
General Mills Inc. said its sales fell in the most recent
quarter amid continued weakness in the U.S. food industry and
slowing growth in emerging markets.
Earnings for the period topped the company's outlook, reflecting
a shift in the timing of expenses, while sales fell below analysts'
projections.
The company has sought to reduce its costs by closing factories,
cutting jobs and scaling back production to respond to lower
consumer demand. Chief Executive Ken Powell said he believes the
company is primed for growth in the second half of its fiscal
year.
"The operating environment remains challenging but, as we move
into the second half of our fiscal year, we expect to renew sales
and profit growth," he said in a news release.
General Mills said results improved in the most recent quarter
compared to the previous period while products sold in the
U.S.--particularly Yoplait yogurt, Nature Valley breakfast biscuits
and Cinnamon Toast Crunch cereal, among others--helped buoy
sales.
However, the company's U.S. retail segment posted $2.86 billion
in sales, a drop of 4% as volumes fell. The segment's snacks and
yogurt units were a bright spot, posting sales gains, but its
cereal, baking products and meals units posted a sales decline, the
company said.
Sales in the company's international businesses fell 6% to $1.32
billion, with foreign-exchange pressures offsetting neutral volume
and favorable impacts from pricing and product mix.
Convenience stores and food service sales rose 4% to $530
million.
For the period ended Nov. 23, General Mills posted a profit of
$346.1 million, or 56 cents a share, down from $549.9 million, or
84 cents a share, a year earlier. Excluding certain items, the
company posted per-share earnings of 80 cents, above its projection
of 75 cents to 77 cents a share.
Net sales fell 3.4% to $4.71 billion. Analysts surveyed by
Thomson Reuters had projected $4.79 billion in sales.
In the most recent quarter, the company's selling, general and
administrative expenses fell 5.1%, while input costs declined less
than 1%.
Write to Michael Calia at michael.calia@wsj.com
Access Investor Kit for General Mills, Inc.
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=US3703341046
Subscribe to WSJ: http://online.wsj.com?mod=djnwires