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 to trim down its operations and 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 a massive 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 saying the company expects to improve its organic net sales performance over the rest of the year.