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General Mills Slumps as Sales Fall Short of Market Expectations

Deena Shanker
(Bloomberg) -- General Mills Inc.‘s sales in the latest quarter fell short of estimates, even after registering an increase from its recently acquired pet food brand, Blue Buffalo. The shares declined as much as 8.3% as of 9:34 a.m. in New York, the biggest drop since September.Sales totaled $4.16 billion in the quarter ended May 26 -- short of the average estimate of $4.24 billion compiled by Bloomberg. The company said organic sales, which strips out items like acquisitions and currency effects, fell 1%.Key InsightsGeneral Mills is betting on the growing market for pet food for its future, but key parts of its business remains sluggish. North America retail sales, which include cereal, yogurt and snacks, posted a sales decline of 2%.The drop was steeper in Europe and Australia, where revenue fell 10%. The company cited a difficult comparison period from a year earlier, slowing demand for ice cream and challenges in France.Blue Buffalo is having an impact, however. Sales jumped 38% in pet food due to “significant distribution expansion.” The company earlier this month said it had opened a 400,000 square foot production plant to support the Blue Buffalo brand.General Mills is gunning for organic sales growth of 1% to 2% this year. The products it sees propelling this include Haagen-Dazs ice cream, snack bars, Old El Paso Mexican-style products and organic goods.Market ReactionThe shares fell to as low as $49.23 in New York trading on Wednesday. The company has outperformed the S&P 500 this year, gaining 38% this year through Tuesday’s close.Get MoreFor more financial details, click here.For company statement, click here.To read what analysts are saying, click here.(Updates share trading)To contact the reporter on this story: Deena Shanker in New York at dshanker@bloomberg.netTo contact the editors responsible for this story: Anne Riley Moffat at ariley17@bloomberg.net, Jonathan Roeder, Cécile DauratFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

(Bloomberg) -- General Mills Inc.‘s sales in the latest quarter fell short of estimates, even after registering an increase from its recently acquired pet food brand, Blue Buffalo. The shares declined as much as 8.3% as of 9:34 a.m. in New York, the biggest drop since September.

Sales totaled $4.16 billion in the quarter ended May 26 -- short of the average estimate of $4.24 billion compiled by Bloomberg. The company said organic sales, which strips out items like acquisitions and currency effects, fell 1%.

Key Insights

General Mills is betting on the growing market for pet food for its future, but key parts of its business remains sluggish. North America retail sales, which include cereal, yogurt and snacks, posted a sales decline of 2%.The drop was steeper in Europe and Australia, where revenue fell 10%. The company cited a difficult comparison period from a year earlier, slowing demand for ice cream and challenges in France.Blue Buffalo is having an impact, however. Sales jumped 38% in pet food due to “significant distribution expansion.” The company earlier this month said it had opened a 400,000 square foot production plant to support the Blue Buffalo brand.General Mills is gunning for organic sales growth of 1% to 2% this year. The products it sees propelling this include Haagen-Dazs ice cream, snack bars, Old El Paso Mexican-style products and organic goods.

Market Reaction

The shares fell to as low as $49.23 in New York trading on Wednesday. The company has outperformed the S&P 500 this year, gaining 38% this year through Tuesday’s close.

Get More

For more financial details, click here.For company statement, click here.To read what analysts are saying, click here.

(Updates share trading)

To contact the reporter on this story: Deena Shanker in New York at dshanker@bloomberg.net

To contact the editors responsible for this story: Anne Riley Moffat at ariley17@bloomberg.net, Jonathan Roeder, Cécile Daurat

For more articles like this, please visit us at bloomberg.com

©2019 Bloomberg L.P.