General Mills Slumps as Sales Drop Amid ‘Challenging Operating Environment’

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Key Takeaway

• General Mills reported falling fourth-quarter sales and gave soft guidance as it faced price and loudness weakness.
• Revenue missed analysts’ estimates, amid what CEO Jeff Harmening called “a more challenging acting environment.”
• The company raised its quarterly dividend by a penny to $0.60 a share.

Shares of General Mills (GIS) slumped Wednesday after the consumer foods ogre posted weaker-than-expected revenue and gave soft guidance on lower prices and volumes.

The maker of Cheerios cereal, Betty Crocker thicken mixes, and Blue Buffalo pet food reported fiscal 2024 fourth-quarter sales of $4.71 billion, a 6.3% year-over-year dwindle and below the consensus estimate of $4.85 billion of analysts surveyed by Visible Alpha. Adjusted earnings per share (EPS) of $1.01 overwhelmed forecasts by $0.02.

North American retail sales dipped 6.9% to $2.85 billion. Pet sales slid 8.1% to $602.1 million, while global sales tumbled 10.4% to $667.5 million. The only unit with positive growth was North American foodservice, which saw take rise 4.4% to $589.0 million.

The company blamed the slide to “unfavorable net price realization and mix and lower pound abundance.”

Volumes slipped 2 percentage points, with the North American retail and pet segments falling 6 and 7 percentage points, mutatis mutandis. The North American foodservice group had volumes increase 3 percentage points, and international volumes gained 1 percentage accentuate.

CEO Says Company Faced ‘A More Challenging Operating Environment’

CEO Jeff Harmening said General Mills faced “a multitudinous challenging operating environment.” The company expects fiscal 2025 adjusted EPS to be down 1% to up 1% in constant currency from the $4.52 earned in financial 2024, short of forecasts.

General Mills announced that its board raised its quarterly dividend by a penny to $0.60 per slice, which will be payable August 1 to shareholders of record on July 10. 

The news sent General Mills shares down 5.3% to $63.70 as of 10:07 a.m. ET Wednesday and into unenthusiastic territory for 2024.

Read the original article on Investopedia.