General Mills earnings drop one-third
Profits down at General Mills in company's second quarter
General Mills booked a steep decline in second-quarter earnings due to restructuring costs and lower sales.
The company said operating profit fell 35.8% to US$559m in the three months to 24 November. Restructuring costs rose to $214.6m, compared to $700,000 in the year ago period. General Mills has embarked on a cost-cutting drive that has seen it place production plants under review and slash jobs.
Net profit attributable to General Mills was down 37.1% to $346.1m in the quarter.
General Mills also witnessed ongoing soft sales trends, with revenue down 3.4% to $4.7bn. CEO and chairman Ken Powell said the company's top line has been hit by issues facing the food sector as a whole. "Net sales declined for the quarter as anticipated, reflecting continued weak food-industry trends in the US and slowing growth in key emerging markets," Powell said.
Last month, General Mills cut its full-year sales and earnings forecasts. The company said operating profit for the financial year ending in May, excluding the impact of currency exchange, is expected to see a low single-digit decline from last year's level of US$3.15bn. Powell said the second quarter result meant the group was on-track to meet these expectations.
Click here for coverage of General Mills' results conference call, in which the company outlined improving market share in some key categories in the US.
Companies: General Mills
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