(Reuters) - General Mills Inc (GIS.N) reported lower-than-expected quarterly profit and revenue as intense competition and lower spending on promotions hurt sales of its Yoplait yogurt and Progresso soups in the United States, its biggest market.
Shares of the Cheerios breakfast cereal maker, which also slashed its 2017 organic sales forecast, fell as much as 4 percent to $60.52 on Tuesday.
General Mills said it expects 2017 sales, excluding acquisitions and divestitures, to decline 3-4 percent from 2016. It had previously anticipated sales would be flat to down 2 percent.
The Minneapolis-based company said a decline in demand for Yoplait, Progresso and Pillsbury refrigerated dough hurt sales by 9 percent in its U.S. business in the second quarter ended Nov. 27.
General Mills gets about 60 percent of its sales from the United States.
Retail sales of Yoplait yogurt, which have declined in the past several quarters, fell 18 percent during the quarter due to intense competition from rivals such as Chobani and Dannon, the U.S. subsidiary of French food company Danone SA (DANO.PA).
General Mills revamped its Yoplait Greek 100 in June with more protein and less sugar as consumers of traditional light yogurt pivot to Greek yogurts, which are touted as healthier.
Yogurt will weigh on sales for many more quarters, Edward Jones analyst Brittany Weissman wrote, noting that the company was in early stages of updating its products and introducing new ones such as organic and drinkable yogurts.
Net sales fell 7 percent to $4.11 billion. Analysts on average had expected $4.23 billion, according to Thomson Reuters I/B/E/S.
Net earnings attributable to the company fell to $481.8 million, or 80 cents per share, from $529.5 million, or 87 cents per share, a year earlier.
Excluding certain items, the company earned 85 cents per share, missing analysts’ average estimate by a cent.
Reporting by Gayathree Ganesan in Bengaluru; Editing by Martina D'Couto and Sayantani Ghosh