General Mills has warned that third-quarter earnings are likely to miss market expectations as sales volumes declined 1% in the period.
In an update today (14 March), the company provided a guidance range of $0.61-0.62 for adjusted earnings per share, missing consensus expectations of $0.68 a share.
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“Sales and operating profit for the third quarter ended 23 February will reflect approximately 1% lower volume, consistent with recent food industry trends in developed markets, as well as negative foreign currency translation effects,” the company said.
General Mills added its result will also be dented by a higher incremental marketing and merchandising spend in the US yoghurt category.
The Yoplait maker has been battling declining sales in an intensely competitive US yoghurt market, particularly in the high-growth Greek category. To date, the company said the response to these efforts has been “encouraging”.
US retail operating profit is expected to be 10-11% below last year, when General Mills booked growth of 13%. Total segment operating profit is also expected to be “below” last year’s “strong third quarter”, the company revealed.
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By GlobalDataGeneral Mills shares were down 1.82% to $50.05 at 16.00 (GMT)
The company is scheduled to report third-quarter earnings next week (19 March).
