General Mills (GIS) issued cautious third-quarter guidance that missed expectations, sending shares of the food giant lower on Friday.
The packaged-foods company, whose portfolio includes Cheerios cereal and Haagen-Dazs ice cream, is projecting adjusted earnings of 61 cents to 62 cents a share. Wall Street analysts were looking for 68 cents.
General Mills cited a 1% decline in volume during the period, in addition to a negative impact from currency translation. Weaker volumes are “consistent with recent food industry trends in developed markets,” the company said.
The Minneapolis-based company also said its bottom line was pressured by increased marketing and merchandising investments in its U.S. yogurt business, “where response to-date has been encouraging.” General Mills makes Yoplait yogurt.
Operating profit for the U.S. retail segment is seen falling 10% to 11% compared to year-ago results, which were up 13%. Total segment operating profit is also expected to be below last year’s third-quarter level.
The company plans to report third-quarter earnings on Wednesday, March 19.
For the fourth quarter, General Mills anticipates double-digit growth in adjusted earnings amid slower growth in input costs and a lower quarterly tax rate. Analysts are expecting per-share earnings of 66 cents.
Earlier this week, the company announced an 8% increase to its quarterly dividend.
Shares slipped 3.2% to $49.36 in early trading. Through Thursday’s close, the stock was up 2.2% so far this year.