Cheerios cereal maker General Mills Inc reported quarterly sales below Wall Street estimates on Wednesday, hit by lower snacks demand in North America, sending shares down 6% before the bell.
Consumers' growing preference for healthier breakfast and snacking options has hit all packaged food companies lately, including General Mills.
In its efforts to lure back customers, the company has introduced premium versions of its yoghurt in sea salt caramel and dark chocolate raspberry flavours and also new store displays for its snacks and cereals.
Still, the snack business remained a dark spot in the company's fourth-quarter results.
Tough Quarter
Organic net sales, excluding revenue from acquisitions, fell 2% to $2.34 billion in the quarter for its North America retail segment - its lowest in nearly three years.
Net sales rose 7% to $4.16 billion, but missed the average analyst estimate of $4.24 billion, according to Refinitiv IBES data. The rise was largely fueled by a 38% increase in sales of Blue Buffalo pet foods.
The company bought Blue Buffalo last year to diversify its portfolio and reduce its dependence on snack, cereal and yoghurt businesses.
Net earnings attributable to the company rose to $570.2 million, or 94 cents per share, in the fourth quarter ended 26 May, from $354.4 million, or 59 cents per share, a year earlier.
For the quarter, the company earned 83 cents per share, excluding one-time items, above the estimate of 77 cents.
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