General Mills (NYSE:GIS) shares fell after the packaged foods maker slashed its full-year sales outlook and reported weaker-than-expected revenue for the fiscal second quarter on slower volume recovery.
The company – whose brands include Annie’s, Betty Crocker, Cheerios, Cinnamon Toast Crunch, Dunkaroos, Häagen-Dazs, Lucky Charms, and Pillsbury – now expects its full-year net sales to be flat to 1% higher year-over-year, compared to its earlier forecast of 3% to 4% growth.
“For the full year, we've revised our top-line outlook to account for a slower volume recovery," General Mills (NYSE:GIS) CEO Jeff Harmening said in a statement.
It expects its adjusted operating profit and adjusted diluted earnings per share (EPS) to increase by 4% to 5% in constant currency, compared to its prior guidance of 4% to 6% growth.
Wall Street analysts had expected full-year sales growth of 2.2% to $20.53 billion and EPS to rise 4% to $4.47.
2Q revenue of $5.1 billion lagged estimates of $5.35 billion, which also weighed on the stock before the stock market opened on Wednesday.
But adjusted EPS grew 14% from the year-ago quarter to $1.25, ahead of the expected $1.16 driven by higher prices.
“While we saw a slower-than-expected volume recovery in the second quarter amid a continued challenging consumer landscape, we generated bottom-line growth thanks primarily to strong holistic margin management (HMM) cost savings," CEO Harmening commented.
Shares of General Mills (NYSE:GIS) traded 4.4% lower at US$63.80 before Wednesday’s opening bell.