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GIS General Mills Inc

69.97
0.31 (0.45%)
After Hours
Last Updated: 20:21:13
Delayed by 15 minutes
Share Name Share Symbol Market Type
General Mills Inc NYSE:GIS NYSE Common Stock
  Price Change % Change Share Price High Price Low Price Open Price Shares Traded Last Trade
  0.31 0.45% 69.97 70.66 69.82 69.93 5,823,653 20:21:13

Conagra, General Mills Square off in Battle to Revive Packaged Foods

24/06/2018 4:29pm

Dow Jones News


General Mills (NYSE:GIS)
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By Annie Gasparro 

Investors will learn this week whether Conagra Brands Inc. is still outpacing General Mills Inc. in the race to revive older food brands.

General Mills Chief Executive Jeff Harmening is banking on a new low-calorie, high-protein yogurt to stem losses in its Yoplait business, where sales plunged 14% in the first nine months of the company's fiscal year.

At rival Conagra, Chief Executive Sean Connolly has focused on revamping older brands like Healthy Choice and Banquet frozen meals and Reddi Wip dessert topping.

"Nobody thought Banquet could be brought back from the dead," Mr. Connolly said at a conference last month. "The business is thriving now."

Conagra on Thursday will reveal whether its latest quarterly earnings confirm that confidence. General Mills reports fourth-quarter results on Wednesday. Analysts are likely to ask about the companies' merger outlook amid reports that Conagra is interested in acquiring Pinnacle Foods Inc. for its frozen-food business.

Sales of Conagra's refrigerated and frozen brands have increased in the past three quarters. At General Mills, yogurt sales fell sharply over that period.

General Mills' stock has fallen 19% over the past year, while Conagra's shares have risen nearly 4%. The S&P 500's Packaged Foods & Meats subindex is down 15% over that period.

Analysts expect revenue at General Mills to have risen 2.5% to $3.9 billion in the company's fourth quarter and earnings to have fallen 0.5% to 73 cents a share, according to FactSet. Conagra's sales are projected to have risen 3.5% to $1.93 billion with earnings up 18% to 44 cents a share.

Conagra earned approval from investors by introducing higher-quality Banquet meals that the company is selling for more than the standard 99-cent price for those frozen dinners. It also reworked Healthy Choice recipes to remove additives and introduced recyclable, plant-based packaging.

General Mills has tried to bolster its business with a move into pet food. In February, the company bought Blue Buffalo for $8 billion and said sales in the pet-food aisle were growing faster than those of established package foods.

But analysts say General Mills needs to turn around its billion-dollar U.S. yogurt business before its share price does the same.

General Mills executives have acknowledged that the company was late to the market with its Yoplait Greek-style yogurt. General Mills has been selling Yoplait in the U.S. since 1977, but a decade ago it began losing sales to a budding Greek-yogurt trend that appealed to Americans because of its higher protein and lower sugar content.

Now Icelandic, Australian and other exotic yogurt varietals are putting even more pressure on mainstay brands like Yoplait.

Mr. Harmening has said Yoplait is recovering. At a conference in May, Mr. Harmening said General Mills had gained market share in yogurt in the latest 13 weeks. The company says one reason is the introduction last summer of Oui by Yoplait, a premium yogurt made without artificial ingredients and sold in glass jars.

"The goal is to keep getting better and to keep changing with the times, " Mr. Harmening said recently.

The newest yogurt General Mills introduced last week, called YQ by Yoplait, aims to make up for Yoplait Light, which has lost favor because of its use of artificial colors and sweeteners.

YQ uses "ultra-filtered" milk that reduces the amount of sugar it contains and concentrates the protein content to make it appealing to health-conscious shoppers. Doug Martin, head of marketing for Yoplait USA, said General Mills wanted to come out with a new, healthy-oriented yogurt that wouldn't end up "feeling like new versions of light yogurt."

 

(END) Dow Jones Newswires

June 24, 2018 11:14 ET (15:14 GMT)

Copyright (c) 2018 Dow Jones & Company, Inc.

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