MINNEAPOLIS — General Mills, Inc. has lowered its sales and earnings outlook for the fiscal year ending May 2017, based on weak year-to-date performance of Yoplait yogurt and Progresso soup, the company said Feb. 17.
Executives now expect full-year organic net sales to decline by approximately 4%, which represents the low end of the previous range of a 3% to 4% decline, driven primarily by increased promotional activity among General Mills’ competitors in the U.S. yogurt and soup categories, the company said.
The company expects total segment operating profit growth in constant currency to range from down 1% to up 1%, reflecting lower sales and incremental spending planned for the fourth quarter to improve performance on key business lines. General Mills said it remains on track to deliver total savings of $880 million from cost savings initiatives.
The company also expects to deliver an adjusted operating profit margin of at least 18% for the full year, which represents an increase of at least 120 basis points over the previous year.
Previously, the company had targeted total segment operating profit growth of 2% to 4% in constant currency and a 150 basis point improvement in adjusted operating profit margin.
Fiscal 2017 adjusted diluted earnings per share are expected to increase 5% to 7% in constant currency, down from the previous projection of 6% to 8%. The company now expects mid-single-digit growth in free cash flow, down from the previous target of high single-digit growth.
“General Mills is committed to pursuing its Consumer First strategy and leveraging its five global platforms —cereal, snacks, yogurt, convenient meals and super-premium ice cream — along with its new global organizational structure to achieve its goal of creating market-leading growth to deliver top-tier shareholder returns,” the company said in a statement.
