General Mills Q1 sales fall as yogurt disposal weighs

(Sharecast News) - Shares in General Mills were lower on Wednesday after the US foods group reported a 3% decline in first-quarter sales as the disposal of its US yoghurt business weighed on reported growth.

The company, which owns brands like Cheerios, Betty Crocker and Old El Paso, said net sales for the quarter ended 30 August fell to $4.39bn from $4.52bn a year earlier, though slightly ahead of the $4.35bn consensus estimate. Organic sales were broadly flat.

North America Retail sales fell 7% to $2.45bn, including a four-percentage-point hit from the yoghurt sale, while North America Pet revenues were flat. Foodservice sales rose 1% and International revenues increased 4%.

Operating profit dropped 63% to $634m, largely reflecting the absence of a $1.05bn gain booked a year earlier from the yoghurt disposal. On an adjusted basis, operating profit fell 11% in constant currencies, as higher input costs and lower volumes outweighed favourable pricing and product mix.

Net earnings fell 67% to $397m, while earnings per share declined to $0.74 from $2.22. Adjusted EPS was $0.75, down 13% in constant currencies but above the $0.72 expected by analysts.

Chief executive Jeff Harmening said the company was "off to an encouraging start" to the year, pointing to improved product innovation and cost savings.

General Mills maintained its fiscal 2027 guidance for organic sales ranging from a 1.5% decline to 0.5% growth, while adjusted operating profit is expected to fall between 8% and 13% in constant currencies. Adjusted EPS remains forecast at $3.00 to $3.20.

The group also continues to expect at least $750m of cost savings this year, helping offset input-cost inflation and investment in its brands.

General Mills shares were trading 2.3% lower at $34.64 by 1458 BST.