General Mills shares slump after falling short of revenue estimates
Food maker General Mills saw its shares slump in early trading after falling short on quarterly revenues following a move away from snack foods in the US.
Net sales across North America, which accounts for more than half of General Mill's revenue, fell 2% over the group's fourth trading quarter, something it attributed to a decline in its US snacks business, which includes the likes of Chex Mix and Nature Valley granola bars.
US retail sales for General Mills' meals and baking, yoghurt and cereal segments were all flat year-on-year.
Revenues rose 7% during the quarter to $4.16bn, thanks to the acquisition of Blue Buffalo Pet Products, but still fell short of average estimates of $4.24bn.
However, General Mills did top Wall Street estimates on earnings, reporting adjusted earnings of $0.83 per share, ahead of the $0.77 forecast.
Looking forward, General Mills expects organic net sales to increase 1% to 2% in 2020 and adjusted full-year earnings per share to jump 3% to 5% from the $3.22 recorded in 2019.
Chief executive Jeff Harmening said: "We'll look to improve our performance again in fiscal 2020, and we have plans in place to accelerate our organic sales growth while maintaining our strong margins and cash discipline."
As of 1640 BST, General Mills shares had slumped 5.87% to $50.50 each.