Consumer foods manufacturer General Mills has reported that net sales declined by 4% to $3.8 billion in the first quarter of its financial year.
Operating profit was down 3% to $626 million, while total segment operating profit fell 16% in constant currency, which the company says reflects volume declines in North America, Asia and Latin America.
General Mills, which produces brands such as Häagen-Dazs, Yoplait, Old El Paso and Nature Valley, saw its North America retail sales fall by 5% due to declines in the yoghurt, cereals, and snacks segments, as well as higher input costs.
Sales in Asia and Latin America were down 8%, while net sales in the company's convenience stores and foodservice segment were essentially flat. However, sales in Europe and Australia increased 3%, with benefits from net prices realisation and favourable currency exchange.
"Our first-quarter net sales finished in line with our expectations, and our focus on our global growth priorities drove important improvement in our retail sales trends," said General Mills CEO Jeff Harmening.
2018 Outlook
For the 2018 fiscal year, General Mills has outlined a number of priorities, including growing its cereal business globally, improving US yoghurt through innovation, investing in new opportunities such as natural and organic food brands, and managing its core brands with appropriate investment.
By focusing on these areas, General Mills expects to drive a 200 to 300 basis point improvement in its organic net sales in 2018, helping return the business to consistent organic net sales growth.
"Our number one priority in fiscal 2018 is strengthening our topline performance," said Harmening.
"We anticipated a slow start to the year on the bottom line, and we continue to expect sequential improvement in profitability in the coming quarters. Looking ahead, we're taking deliberate steps through innovation, brand building, and increased organisational agility to position the company for long-term top- and bottom-line growth, in line with our shareholder return model.
"Importantly, we remain on track to deliver our fiscal 2018 goals in a challenging and dynamic environment."
© 2017 European Supermarket Magazine – your source for the latest retail news. Article by Sarah Harford. Click subscribe to sign up to ESM: The European Supermarket Magazine.
