General Mills today (20 February) narrowed upwards a target for annual sales but raised the possibility a key operating profit metric could fall year-on-year.
Ahead of a presentation by General Mills senior management at the Consumer Analyst Group of New York investment conference in Florida, the Cheerios owner updated its forecasts for full-year organic net sales and total segment operating profit.
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General Mills, which usually announces its annual financial results in late June, said it now expects its organic net sales to be “in line with last year”, a forecast it added was “at the high end of the previous range of flat to down 1%”.
The company, which has a range of brands that also includes Yoplait yogurt and Old El Paso Mexican-style foods, said it “continues to see broad-based improvement in top-line momentum, including in the US.
However, General Mills now expects its constant-currency total segment operating profit to be between flat to down 1% year-on-year, compared to an earlier forecast flat to up 1%. It pointed to “increased input cost pressure, including freight and logistics costs in North America, and slower-than-expected performance improvement in Brazil”.
Nevertheless, the business also expects its adjusted earnings per share to grow by 3-4%, versus an earlier forecast of growth of 1-2%, reflecting a lower effective tax rate and a more favourable foreign exchange environment
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