Dive Brief:
- General Mills reported its fifth straight quarter of sales declines Wednesday as the company's first fiscal quarter 2017 performance missed the company's own expectations,according to a company statement.
- Revenue dropped 7.1% to $3.91 billion, in line with analysts' expectations. U.S. retail sales tumbled 8% to $2.33 billion.
- Quarterly profits also declined 4% to$409 million, or $0.67 per share, down from $426.6 million, or $0.69 per share, in the same period last year, though it still beat analysts' expectations.
Dive Insight:
In one positive note from the earnings report, the company expanded its operating profit margin by 30 basis points to 16.5% of net sales. For its adjusted operating profit margin, the company improved by 80 basis points to 19.2% of net sales. Those results are critical while General Mills struggles with its top-line performance. But they're also somewhat expected going forward following the company's announcement totrim down its operationsand close a handful of U.S. and international plants.
General Mills continues to struggle, particularly in segments like yogurt where it doesn't have an established presence in the fastest-growing sub-segments, like organic. The company is attempting to address those issues with amassive overhaul of its yogurt portfolio, which General Mills announced earlier this year.
The yogurt category is key for General Mills to turn around its consistent top-line declines. That's due in part to yogurt's relative proportion of the company's total sales and to its alignment with consumer trends and demands for convenient and better-for-you snacks and breakfast foods.
Still, the company reaffirmed its full-year sales and earnings guidance, with chairman and CEO Ken Powell sayingthe company expects to improve its organic net sales performance over the rest of the year.
