General Mills Profit Falls

General Mills Inc. said profit and revenue fell in the latest period as sales of yogurt, one of its largest global businesses, continued to struggle.

Chairman and Chief Executive Ken Powell said sales performance didn't meet the company's expectations, and blamed the results on "the challenging macro environment, a difficult year-over-year comparison and a slower start to the year on certain businesses."

Still, he said the company expects organic net sales performance will improve over the remainder of the year, and General Mills's profit for the quarter came in better than analysts were expecting.

General Mills, which makes Yoplait yogurt, doesn't have a strong foothold in the fastest-growing segments within yogurt, such as organic. The Minneapolis company is trying to fix that with more varieties of organic yogurt under the Annie's Homegrown brand it bought two years ago.

The company—which makes Cheerios cereal, Hä agen-Dazs ice cream and Annie's macaroni & cheese—said U.S. retail sales fell 8% to $2.33 billion for the three months that ended in August, hurt in part by yogurt. After cereal had struggled for years industrywide as Americans turned to the likes of Greek yogurt and granola bars, General Mills has stabilized its cereal sales recently.

The company has also been hurt recently by a strong U.S. dollar devaluing international sales, as well as the sale of its Green Giant frozen-vegetable business. International segment sales fell 6% to $1.13 billion.

Over all, General Mills reported a profit of $409 million, or 67 cents a share, down from $426.6 million, or 69 cents a share, a year earlier. Adjusted for certain market-to-market effects and restructuring costs, among other items, per-share earnings fell to 78 cents from 79 cents. Analysts expected 75 cents a share, according to Thomson Reuters.

Revenue fell 7.1% to $3.91 billion, meeting analysts expectations.

The company also backed its full-year sales and earnings guidance.

Write to Joshua Jamerson at [e-mail]

(END) Dow Jones Newswires

September 21, 2016 08:15 ET (12:15 GMT)

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