US food major General Mills risks seeing its sales decline in Greater China after reporting almost half of its Häagen-Dazs ice-cream shops have been temporarily closed due to the coronavirus outbreak.
China is relatively small in terms of its 4% contribution to the New York-listed firm’s group sales, but General Mills said in a statement that “because of the evolving nature of the situation, we are not able to quantify the financial impact of the outbreak on our fiscal 2020 results at this time”.
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Coronavirus broke out in the Chinese city of Wuhan, the capital of Hubei province, late in December and has since spread to around 29 countries. In China, more than 72,000 cases have been reported so far and more than 1,800 deaths.
Minnesota-based General Mills added that its remaining Häagen-Dazs ice-cream stores are “operating under severely restricted hours”. About 40% of its 4% net sales in Greater China come from the Häagen-Dazs shops and other foodservice outlets, it said.
“During the rapidly-evolving situation related to the coronavirus outbreak in China in recent weeks, General Mills and our China team have prioritised the safety of our consumers, employees, and other stakeholders by following government and health organisation guidance regarding safety precautions,” the Yoplait yogurt owner said.
The announcement was made in conjunction with a presentation at the Consumer Analyst Group of New York (CAGNY) investor conference yesterday (18 February) where General Mills reaffirmed its financial guidance for the year ending on 31 May.
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By GlobalDataOrganic net sales are expected to increase 1% to 2% percent. “The combination of currency translation, the impact of divestitures executed in fiscal 2019, and contributions from the 53rd week in fiscal 2020 are expected to increase reported net sales by approximately one percentage point,” it said.
Constant-currency adjusted operating profit is projected to rise 2% to 4%.
