General Mills Profit Falls
September 21 2016 - 8:24AM
Dow Jones News
By Joshua Jamerson
General Mills Inc. said profit and revenue fell in the latest
period as sales of yogurt, one of its largest global businesses,
continued to struggle.
Chairman and Chief Executive Ken Powell said sales performance
didn't meet the company's expectations, and blamed the results on
"the challenging macro environment, a difficult year-over-year
comparison and a slower start to the year on certain
businesses."
Still, he said the company expects organic net sales performance
will improve over the remainder of the year, and General Mills's
profit for the quarter came in better than analysts were
expecting.
General Mills, which makes Yoplait yogurt, doesn't have a strong
foothold in the fastest-growing segments within yogurt, such as
organic. The Minneapolis company is trying to fix that with more
varieties of organic yogurt under the Annie's Homegrown brand it
bought two years ago.
The company -- which makes Cheerios cereal, Häagen-Dazs ice
cream and Annie's macaroni & cheese -- said U.S. retail sales
fell 8% to $2.33 billion for the three months that ended in August,
hurt in part by yogurt. After cereal had struggled for years
industrywide as Americans turned to the likes of Greek yogurt and
granola bars, General Mills has stabilized its cereal sales
recently.
The company has also been hurt recently by a strong U.S. dollar
devaluing international sales, as well as the sale of its Green
Giant frozen-vegetable business. International segment sales fell
6% to $1.13 billion.
Over all, General Mills reported a profit of $409 million, or 67
cents a share, down from $426.6 million, or 69 cents a share, a
year earlier. Adjusted for certain market-to-market effects and
restructuring costs, among other items, per-share earnings fell to
78 cents from 79 cents. Analysts expected 75 cents a share,
according to Thomson Reuters.
Revenue fell 7.1% to $3.91 billion, meeting analysts
expectations.
The company also backed its full-year sales and earnings
guidance.
Write to Joshua Jamerson at joshua.jamerson@wsj.com
(END) Dow Jones Newswires
September 21, 2016 08:09 ET (12:09 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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