General Mills profit falls as sales disappoint
General Mills sees decline in 'foundation' brands and US yogurt
General Mills reported lower first-quarter profit today (21 September) as sales failed to meet the company's expectations.
The Cheerios maker revealed that net sales declined 7% to US$3.9bn in the period to 28 August, with forex and the disposal of Green Giant adding to the group's underlying weakness. Organic sales were down 4% with growth in the natural segment and emerging markets more than offset by lower sales of General Mills' "foundation" business - which consists largely of refrigerated dough, soup and baking mixes sold through the US retail channel - and of yogurt in the US.
CEO Ken Powell said General Mills was disappointed by the top-line result but added the group has a number of growth initiatives it believes it can leverage moving forward. "Our net sales performance did not meet our expectations due to the challenging macro environment, a difficult year-over-year comparison, and a slower start to the year on certain businesses. We are taking actions to improve our net sales performance going forward, leveraging our consumer-first focus. At the same time, we have a number of encouraging examples across our global portfolio where our efforts to adapt to evolving consumer interests are driving positive results," he said.
The company did note year-on-year margin improvements, with operating margin expanding by 30 basis points to 16.5% of net sales. This did not, however, compensate for the drop in revenue and operating profit decreased 6% to $646m. Net profit declined to $409m from $426.6m last year.
General Mills reiterated its full-year forecasts, with sales expected to fall 0-2%, constant-currency operating profit to rise 6-8% on a 150 bps increase in margin, and constant-currency earnings per share to rise 6-8%.
Companies: General Mills
Marketline's Company Mergers & Acquisitions (M&A), Partnerships & Alliances and Investments reports offer a comprehensive breakdown of the organic and inorganic growth activity undertaken by an organi...
The report provides a review of the latest news and key events in the global bakery & cereals market during January....
Savory Snacks in Brazil industry profile provides top-line qualitative and quantitative summary information including: market share, market size (value and volume 2011-15, and forecast to 2020)....
A cereal bar is a pre-packaged food item that contains oats, nuts, honey, dry fruits, and puffed rice and is rolled in the shape of a bar....
- just-food 2017 Survey - your thoughts on growth
- 2017 - what will shape the UK food sector?
- Food market in 2017: need-to-know US trends
- Food market in 2017: big foodservice trends
- Could BRF's Turkey move pave way for OneFoods IPO?
- Ferrero insists Nutella not pulled from shelves
- UK's Bakkavor plays down IPO "speculation"
- PepsiCo launches Walkers Mediterranean in UK
- Mondelez plans "selective" UK price hikes
- Unilever sets packaging target