The lower revenue was attributed to declining organic net sales, the divesture of the company’s North American Green Giant business to B&G Foods (BGS) past year and impacts from foreign exchange.
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Operating profit totaled $646 million, down 6 percent compared to the prior year. The company still expects constant-currency adjusted earnings per share growth of 6 percent to 8 percent from the base of $2.92 earned in fiscal 2016.
Chairman and Chief Executive Ken Powell said sales performance didn’t meet the company’s expectations, and blamed the results on “the challenging macro environment, a hard year-over-year comparison and a slower start to the year on certain businesses”.
Organic net sales declined 4%. Revenue fell 7.3% from past year to $3.9 billion, which was in-line with Wall Street’s $3.92 billion estimate.
Strong results had been posted by Annie’s and Lärabar Nature Valley cereals and Old El Paso Mexican products but this had been more than offset by declines in Yoplait yogurt and Progresso soup. Prior to today’s report, GIS had gained 12.21% year-to-date. The company is planning actions to improve its sales performance, but is expecting to achieve its profit goals for fiscal 2017 and its target of 20% adjusted operating profit margin by fiscal 2018. “At the same time, we have a number of encouraging examples across our global portfolio where our efforts to adapt to evolving consumer interests are driving positive results“.
General Mills said the increase in USA natural and organic brand and emerging markets “more than offset” declines in its foundation businesses and in US yogurt.
Worldwide segment sales totaled $1.13 billion, down 6%. Net sales were down 6% to $1.13bn when taking into account foreign exchange and divestiture of Green Giant in Canada.
The company also backed its full-year sales and earnings guidance.
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The stock traded up by $0.30, or 0.46 percent, to $65 in the pre-market trading.
