- Yogurt continues to be a problem for General Mills, which reported a 7% decline in fiscal second-quarter net sales to $4.1 billion, according to the company's earnings report released Tuesday. Organic sales fell 4%.
- Diluted EPS fell 8% to $0.80 per share, for a total quarterly profit of $481.8 million. The company attributed the decrease to a prior-year gain from its Green Giant divestiture in North America.
- General Mills has lowered its fiscal full-year forecast for organic net sales to a 3% to 4% decline, down from previous predictions of flat to down 2%.
In its U.S. Retail segment, General Mills reported a 14% decline in volume offset in part by a 5% gain from price/mix, for a total 9% decline in net sales for this segment. Brands like Annie's, Lärabar, Old El Paso and Totino's posted sales increases. Those gains were offset by declines in sales of Yoplait yogurt, Pillsbury refrigerated dough and Progresso soup.
Yogurt seems to be one of the most challenging segments for General Mills right now, as the category posted a 17% sales decline in the most recent quarter. That's similar to the 15% drop the Yoplait brand reported in the first fiscal quarter this year. Yogurt comprises about 13% of General Mills' sales, so it's key for the company to get this segment back on a path toward growth.
General Mills already understands this critical issue and made moves earlier this year to begin addressing the problem. In July, the company committed to a massive overhaul of a majority (60%) of its yogurt brands and products, to be carried out over the next year.
Now about five months out from that original commitment, it's unclear how much General Mills has changed internally. But it is clear that these efforts have yet to have any significant impact on sales — though it still could be too early to tell. It may take multiple quarters before these efforts are completed and reflect growth for the company's yogurt segment.