Falling Yogurt Sales Drag General Mills' Earnings--Update
September 20 2017 - 8:12AM
Dow Jones News
By Annie Gasparro
General Mills Inc. said its revenue declined for the ninth
straight quarter, as sales of Yoplait yogurt and cereal brands
continued to sink.
Shares dropped 5% in premarket trading Wednesday, as the
company's latest quarterly results fell below Wall Street
expectations.
Chief Executive Jeff Harmening said in a statement that the
quarterly results marked an improvement from the prior period, even
though North America retail sales fell 5%. That was led by
double-digit declines in yogurt sales and a 7% drop in cereal
sales.
Mr. Harmening, who took the top job in June after decades at the
company, has owned up to much of General Mills' struggles, saying
they were "self-inflicted," through missteps like a lack of
innovation and pricing its products too high.
General Mills isn't alone in its struggle to win back consumers
who are increasingly looking for healthier and fresher brands.
Mainstays in the packaged-food aisles are under pressure to
reinvent their recipes and find ways to get their products into the
fresh and refrigerated sections of the grocery store.
In recent years, General Mills has made Cheerios gluten-free,
removed artificial colors from Trix cereal, bought Annie's
Homegrown natural and organic snacks, and removed aspartame from
Yoplait Light.
In July, General Mills came out with what it calls a
French-style yogurt to try to appeal to consumers who aren't coming
back to the Yoplait brand. Oui is cultured for eight hours in the
small glass jars it is sold in, and doesn't contain artificial
flavors or preservatives.
General Mills' global sales fell 4% to $3.77 billion. On a
comparable basis, revenue was down 4%, which is a significantly
larger drop than its projected 1% to 2% decline for the fiscal
year, which ends in May.
"We're confident that improved momentum will translate into
stronger organic net sales results in the rest of year," Mr.
Harmening said.
General Mills' profit of $408.6 million was down 2.6% from a
year ago. Excluding one-time items, adjusted earnings per share
came to 71 cents, below the FactSet consensus of 76 cents.
Write to Annie Gasparro at annie.gasparro@wsj.com
(END) Dow Jones Newswires
September 20, 2017 08:57 ET (12:57 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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