First-quarter profits rise at General Mills despite sales fall
Shares in General Mills eased in pre-market trading after the US food giant missed first-quarter sales estimates.
The owner of Häagen-Dazs, Yoplait, Betty Crocker and Old El Paso said operating profits for the three months to 25 August were 10% ahead at $662m. Adjusted diluted earnings per rose 13% to $0.79.
But net sales eased by more than analysts expected, off 2% to $4.0bn, with organic net sales down 1%. Wall Street had been looking for net sales of around $4.08bn.
Chairman and chief executive Jeff Harmening said: "We are making progress in becoming a nimbler, more consumer-connected General Mills. Our first-quarter net sales performance included encouraging improvement in North America Retail, and strong growth in Pet, driven by good innovation and effective brand-building investment.
"We got off to a slower start in our other segments, and we’re taking actions to drive topline improvement for those segments and the company starting the second quarter."
Sales were flat in its North America Retail division, at $2.38bn, while its pet segment - which recently acquired pet food brand Blue Buffalo - reported a 7% increase to $368m.
In the convenience stores and foodservice division, net sales fell 4% to $445m, contrary to analyst expectations for an increase in revenues. General Mills said the fall had been driven by "lower bakery flour volume and unfavourable index pricing".
In Europe and Australia, net sales slid 9% to $454m, hurt by "continued challenging retail environment in France for yoghurt and ice cream", and sales fell 10% in Asia and Latin America to $360m.
As at 1300 BST, shares in General Mills were off 2% in pre-market trade at $55.03.