General Mills operating profit falls following mixed Q4

General Mills has recorded a 2% operating profit drop in its full-year financial results following a mixed fourth quarter, where the company registered an 8% drop in operating profit due in part to high restructuring costs.

Full-year operating profit totalled $2.51 billion, down from the $2.57 billion figure recorded in last year’s results, as restructuring costs reduced the company’s fourth-quarter operating profit to $561 million compared with the $609 million recorded in the same period last year.

Despite this, the company’s total full-year net sales increased 2% to $3.89 billion, with a 9% rise in net sales in Europe & Australia contributing $1.98 billion thanks to the strong performance of snack bars and ice creams in these markets.

General Mills chairman and chief executive officer Jeff Harmening said: “Fiscal 2018 represented an important first step in returning our business to sustainable topline growth.

“We made significant progress toward competing more effectively this year, with strong innovation, marketing, and in-store execution driving positive organic sales growth in each of our last three quarters.

“And we moved to reshape our portfolio for future growth with the acquisition of Blue Buffalo, a fast-growing, highly profitable business that is leading the transformation of the US pet food category.

“While our full-year profit results fell short of our initial plans, we finished the year delivering growth in sales, margins, profit, and EPS in the fourth quarter. And I’m pleased with the continued progress we’ve made in cash generation, with our free cash flow up nearly 30% this year.”