General Mills Inc. said its sales fell in the most recent quarter amid continued weakness in the U.S. food industry and slowing growth in emerging markets.
Earnings for the period topped the company's outlook, reflecting a shift in the timing of expenses, while sales fell below analysts' projections.
The company has sought to reduce its costs by closing factories, cutting jobs and scaling back production to respond to lower consumer demand. Chief Executive Ken Powell said he believes the company is primed for growth in the second half of its fiscal year.
"The operating environment remains challenging but, as we move into the second half of our fiscal year, we expect to renew sales and profit growth," he said in a news release.
General Mills said results improved in the most recent quarter compared to the previous period while products sold in the U.S.--particularly Yoplait yogurt, Nature Valley breakfast biscuits and Cinnamon Toast Crunch cereal, among others--helped buoy sales.
However, the company's U.S. retail segment posted $2.86 billion in sales, a drop of 4% as volumes fell. The segment's snacks and yogurt units were a bright spot, posting sales gains, but its cereal, baking products and meals units posted a sales decline, the company said.
Sales in the company's international businesses fell 6% to $1.32 billion, with foreign-exchange pressures offsetting neutral volume and favorable impacts from pricing and product mix.
Convenience stores and food service sales rose 4% to $530 million.
For the period ended Nov. 23, General Mills posted a profit of $346.1 million, or 56 cents a share, down from $549.9 million, or 84 cents a share, a year earlier. Excluding certain items, the company posted per-share earnings of 80 cents, above its projection of 75 cents to 77 cents a share.
Net sales fell 3.4% to $4.71 billion. Analysts surveyed by Thomson Reuters had projected $4.79 billion in sales.
In the most recent quarter, the company's selling, general and administrative expenses fell 5.1%, while input costs declined less than 1%.
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