* Fourth-quarter adjusted profit $0.67/share vs est $0.72
* Sales fall 2.9 pct to $4.28 bln vs est $4.42 bln
* Co says streamlining operations to save $40 mln in 2015
* Shares fall as much as 4 pct
(Adds CEO and analyst comment, details from conference call,
background; updates share movement)
June 25 General Mills Inc, maker of
Cheerios cereal and Betty Crocker baking products, said it would
launch healthier products and revamp and promote its existing
ones to revive sales that have slipped for three straight
The company, whose shares fell as much as 4 percent, also
said advertising spending could grow faster than sales in the
General Mills is jumping into an increasingly crowded market
for healthier foods, with rivals also chasing health-conscious
consumers. But the industry has little choice as long-standing
brands lose ground to cheaper store brands.
"Consumers today are seeking more protein at breakfast and
we are responding," Chief Executive Ken Powell said on a
post-earnings conference call on Wednesday.
General Mills has launched protein-based Nature Valley
granola bars and Cheerios cereals and has struck a deal with
McDonald's Corp to have its Yoplait yogurts offered with
Happy Meals in thousands of outlets from next month.
Rival ConAgra Foods Inc has said that its Healthy
Choice brand under which it sells healthy frozen meals and soups
continued to face challenges and substantial volume decline in
the third quarter ended Feb. 23.
Kraft Foods Group Inc, Kellogg Co, Unilever
Plc and many other large food companies have also taken
steps as health-conscious consumers lose their taste for highly
To cut costs, General Mills said it was reviewing its North
American manufacturing and distribution network with a view to
save $40 million pretax in the year ending May 2015.
The company said savings from an ongoing cost-cutting
program in its supply chain are expected to exceed $400 million
General Mills said it expected net sales to grow at a
mid-single-digit percentage rate in fiscal 2015, with adjusted
earnings per share growing by high-single digits.
Sales in the company's U.S. branded goods retail business,
which accounted for 60 percent of revenue in the year ended May
25, fell 1 percent to $2.4 billion in the fourth quarter.
The division's brands include Green Giant canned and frozen
vegetables, Progresso soup and Pillsbury frozen foods.
Sales in the company's international business, its
second-largest division that includes Old El-Paso Mexican foods
and Haagen-Dazs ice-creams, fell 7 percent to $1.3 billion.
Net sales fell 2.9 percent to $4.28 billion. Analysts had
expected sales of $4.42 billion.
Net income rose 10.4 percent to $404.6 million, or 65 cents
per share from $366.3 million, or 55 cents per share, a year
Excluding items, earnings were 67 cents per share. Analysts
had expected 72 cents per share, according to Thomson Reuters
One-time items include a 6-cent per share gain from the sale
of several grain elevators and a 9-cent per share charge
associated with the devaluation of Venezuela's currency.
The Minneapolis, Minnesota-based company's shares were down
3.1 percent at $52.01 in afternoon trading on the New York Stock
(Reporting by Shailaja Sharma in Bangalore; Editing by Sriraj