• General Mills sales down 2%
  • Operating profit down 4%
  • US weighs as General Mills caught by changing consumer trends

General Mills has conceded that the performance of its US brands weighed on full-year sales and earnings in a 12 month period that the company described as "mixed".

Sales in the year dropped 2% to US$17.6bn, although in a constant currency basis revenue rose 2%. Total segment operating profit declined 4% to $3bn, while net earnings fell to $1.97 per share compared to $2.83 per share in 2014.

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CEO Ken Powell said that the group's performance was "mixed" with international, foodservice and convenience growing operating profit – but a weak performance from US retail overshadowing the result.

Commenting on the group's domestic performance, Powell noted: "We returned our US yoghurt business to growth, and our brands gained share in categories representing 65% of our US retail measured sales volume, but overall sales trends reflected the impact of changing consumer food preferences.

"Our actions to respond to evolving consumer food interests – including bolstering our natural and organic portfolio with the addition of Annie's – helped strengthen our business performance in the second half of the year. This 'consumer first' product and marketing focus, combined with our significant productivity and cost-savings programs, positions General Mills to deliver stronger growth in 2016."

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Looking to the coming year, General Mills said it expected 2016 sales to "match" 2015 levels on a constant currency basis. Constant-currency adjusted diluted EPS is expected to grow at a "mid single-digit rate" but the company expects currency exchange to represent around a 4% headwind in 2016.

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