Adjusted earnings of 75 cents beat analyst estimates of 72 cents
General Mills posted net sales of $4.39 billion for the quarter ended Aug. 30, down 2.8% from a year earlier but just ahead of the $4.35 billion Wall Street had forecast, according to a FactSet poll cited by The Wall Street Journal. On an organic basis, which strips out the impact of acquisitions and divestitures, total sales were essentially flat from the prior year.
The company reported quarterly net income of $397 million, or 74 cents per share, compared with $1.2 billion, or $2.22 per share, in last year’s comparable period. Stripping out certain one-time items, adjusted earnings came in at 75 cents per share, ahead of the 72 cents analysts had expected.
Sales declines were concentrated in the company’s North American retail segment, where revenue fell 6.6% to $2.45 billion. International sales provided a partial offset, rising 4.5% to $794.2 million. Sales in General Mills’ North American pet business were flat.
Chief Executive Jeff Harmening said General Mills continues to operate in a volatile environment. The company is still working to cut costs and improve its top-line trends through stronger product innovation and updated marketing strategies that highlight ingredients such as protein and fiber, he said.
Looking ahead, General Mills said it continues to expect category growth to run below its long-term historical rate because of what it described as a challenging consumer backdrop. The company reaffirmed its full-year adjusted earnings outlook of $3 to $3.20 per share, compared with analyst views of $3.07 per share. Organic sales are projected to fall 1.5% or rise as much as 0.5%.