Due to continued weak food-industry trends in the US and slowing growth in key emerging markets, General Mills is reducing its sales and earnings expectations for the fiscal year ending in May 2015.
Its fiscal 2015 net sales in constant currency are now expected to grow at a low single-digit rate from the 2014 base of US$17.9 billion.
This includes an estimated two points of sales growth from the 53rd week in fiscal 2015 and approximately US$120 million of incremental sales from the Annie’s organic and natural food businesses acquired October 21, 2014.
Annie’s will be consolidated into General Mills’ 2015 results on a one-month lag basis.
Total segment operating profit in constant currency is expected to decline at a low single-digit rate from prior-year results of US$3.15 billion.
This includes more than US$400 million in cost of goods savings from holistic margin management, along with US$40 million in savings from projects initiated this year to streamline the company’s North American supply chain and further reduce overhead costs.
Meanwhile, General Mills’ US retail operating segment is now expected to show an operating profit decline for fiscal 2015.
In Nielsen-measured US retail outlets, the company’s fiscal 2015 year-to-date (YTD) sales are growing in key categories such as yogurt, grain snacks, fruit snacks and frozen pizza.
The company’s YTD market shares are flat or up in categories representing 75% of the company’s sales volume in measured outlets.
Businesses posting market share increases include cereal, yogurt, grain and fruit snacks, ready-to-serve soup, and frozen pizza and hot snacks.
