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(Sharecast News) - Lucky Charms-owner General Mills reaffirmed full-year guidance on Wednesday, despite a slide in third-quarter sales and profits amid a "challenging" consumer market.
The US food giant - which also owns Cheerios, Betty Crocker, Pillsbury and Blue Buffalo pet food, among others - saw net sales fall 8% in three months to 22 February to $4.4bn, or by 3% on an organic basis. Adjusted diluted earnings per share tumbled 37% to $0.64.
The Minneapolis-based firm said it had been hit by the "significant" impacts of increased brand investments and the divestitures of North American yoghurt.
Jeff Harmening, chief executive, said: "We started the year expecting that our investments, divestitures and unfavourable timing comparisons would drive declines in our sales and earnings results through our first three quarters, even as we improved volume and market share. And that's what we've seen play out."
Looking to current trading, Harmening said he expected a "step up" in organic sales trends and a return to earnings growth in the current quarter, although the company acknowledged that the consumer backdrop remained "challenging".
For the year as a whole, organic net sales are expected to fall by between 1.5% and 2%, with adjusted diluted EPS down 16% to 20%, weighed down by brand investment and cost inflation, including the impact of tariffs.
"General Mills' top priority is to restore volume-driven organic net sales growth over the long term," the company said.
"To strengthen its categories and market share performance, the company is increasing investment in consumer value, product news, innovation and brand building."
As at 1300 GMT, the shares were down 1% in pre-market trading.
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