The Cheerios cereal maker’s US retail sales fell 4 percent in the second quarter ended November 29 as consumers shift away from processed items and pick foods that are perceived as healthier.
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The divestitures and a strong USA dollar contributed to falling sales in the quarter, the company said. Foreign currency exchange cut sales by 4%, the company said.
Diluted earnings per share totaled 87 cents, up from 56 cents a year ago and beating analysts’ consensus estimate of 82 cents.
Some General Mills products have been performing well also. Analysts predicted 83 cents in adjusted earnings per share on $4.61 billion in sales, according to Thomson Reuters. Earlier this year, the company said it would remove artificial flavors and colors from all of its cereals.
General Mills’ revenue for the second quarter of 2016 came in at $4.42 billion.
After sales declines in recent quarters, gluten-free varieties of Cheerios posted sales growth in grocery stores once it began advertising them in September. Operating profit +6.9% to $102.8M.
General Mills early this year launched a restructuring it calls Project Century to streamline operations, and says those actions will result in annual cost savings of about $450 million by the end of next year.
The company said sales of its snacks and baking products – which includes brands Betty Crocker, Pillsbury, Bugles, Nature Valley and Chex – declined by 1 percent, while all its other product categories (cereals, pizzas, etc.) declined “mid single-digits”.
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Lisa Beilfuss contributed to this article.
