General Mills recently reported its fiscal first quarter financials, which revealed dropped sales and profits compared to the same period last year, with factors such as higher costs and reduced prices impacting margins. The total revenue of $4.85 billion was marginal over analyst predictions, but down by 1% from the prior year. Net income also dropped to $579.9 million from last year's $673.5 million, failing to meet analyst estimations.
The company identified an 'unfavorable net price realization and mix' as key reasons for the slide in sales. Although international sales volume saw an upswing, lower prices partially offset this. Conversely, sales volume in North America showed a decrease.
Despite this, General Mills, which owns brands like Cheerios, Pillsbury, and Blue Buffalo pet food, confidently maintained its fiscal 2025 outlook. They estimate organic net sales to remain flat or rise by 1%, with adjusted earnings per share (EPS) ranging from up or down by 1% relative to fiscal 2024. The company is hopeful about an improvement in sales volume as the year progresses, despite the looming "uncertain macroeconomic backdrop."
Notably, the company's forecast does not account for the recent announcement of the planned sale of its yogurt business, consisting of brands like Yoplait and Go-Gurt to French dairy companies Lactalis and Sodiaal, for a combined $2.1 billion. Lactalis is set to take over U.S. operations, while Sodiaal will acquire the Canadian yogurt operations, including several manufacturing plants.
General Mills' shares remained relatively stable following the announcement, with a year-to-date gain of around 15%.