General Mills Inc.’s second-quarter financial performance fell short of Wall Street’s expectations as its U.S. sales lagged across the board.
The Minneapolis-area company reported second-quarter net earnings of $530 million, or 87 cents a share, up from $346 million, or 58 cents, a year ago.
Adjusted for one-time charges and benefits, its profit amounted to 82 cents per share, up 2 percent over a year ago. That’s a penny below the consensus profit forecast of stock analysts polled by Thomson Reuters, but in line with analysts’ estimates from Zacks Investment Research.
General Mills, maker of everything from Cheerios cereal to Nature Valley granola bars, posted sales of $4.42 billion for the second quarter ending Nov. 29, 2 percent below a year ago and 4 percent short of stock analysts’ projections from Thomson Reuters.
The shortfall stems primarily from the company’s U.S. retail division, where sales totaled $2.76 billion, down 4 percent. Acquisitions and divestitures, notably General Mills’ sale of its Green Giant brand for $765 million to B&G Foods, accounted for 1 percent of that reduction in U.S. sales.
But the rest of the drop comes from soft volume, a nagging problem for General Mills and other big packaged-food companies as some consumers are moving away from more processed food.
With those lower net sales, General Mills’ U.S. operating profit was down 3 percent, totaling $600 million. Ongoing cost-cutting programs, along with lower spending on advertising, kept that figure from being worse.
In trading Thursday, General Mills shares dropped $1.96, or 3.3 percent, to $57.23.