General Mills net income falls as North American sales drop

General Mills has reported that its net income has fallen 3.1% in its first-quarter results, as the company’s net sales fell 2% in North America, its largest market.

The company’s overall net income for the segment fell to $392.2m, as first-quarter net sales for General Mills’ North America Retail segment dropped to $2.39 billion, as demand for its snacks and yogurts fell among US consumers.

Net sales fell 4% in General Mills’ US Snacks unit and 2% respectively in the company’s US Meals & Baking, US Yogurt and Canadian divisions, though the company’s cereal division did post a 1% rise in sales.

Despite this, the company’s overall net sales rose 9% to $4.09 billion, but this was largely driven by the acquisition of Blue Buffalo and the performance of its pet food unit, and the company’s operating profit still fell 0.6% to $601.5 million when compared to the same period last year.

First-quarter net sales for General Mills’ Convenience Stores & Foodservice segment increased 4% to $463 million, driven by the single-digit growth of snacks and frozen meals.

In Europe and Australia, net sales increased 2% to $501 million, with Nature Valley and Fibre One snack bars and Häagen-Dazs ice cream performing particularly strongly.

Net sales in the company’s Asia & Latin America segment increased 2% to $399 million, with China, Brazil, and India leading the way and the Häagen-Dazs brand, Wanchai Ferry frozen dumplings, Yoki and Kitano meals and snacks, and Pillsbury snack bars all registering strong sales.

General Mills chairman and CEO Jeff Harmening said: “Fiscal 2019 is off to a good start. We drove organic net sales growth for the fourth consecutive quarter.

“The Blue Buffalo transition is progressing well, and we continue to expect double-digit top and bottom-line growth for that business this year, excluding acquisition-related charges.

“And we’re on track to deliver our financial commitments, with first-quarter adjusted operating profit and adjusted diluted EPS results ahead of our expectations.

“Based on these results and our outlook for the year, we are reaffirming our full-year fiscal 2019 targets.”