General Mills Q3 Profit Tops Estimates; Sales Down 8%; Reaffirms FY16 Outlook

(RTTNews) - General Mills (GIS) reported third quarter net earnings attributable to company of $361.7 million compared to $343.2 million, prior year. EPS totaled $0.59 compared to $0.56. Total segment operating profit declined 3 percent to $679 million. On a constant-currency basis, total segment operating profit declined 1 percent. Third-quarter adjusted EPS declined 7 percent to $0.65. On a constant-currency basis, adjusted EPS declined 6 percent. On average, 15 analysts polled by Thomson Reuters expected the company to report profit per share of $0.62 for the quarter. Analysts' estimates typically exclude special items.

Net sales declined 8 percent to $4.0 billion, including a 3 point decline from the Green Giant divestiture. On a constant-currency basis, net sales declined 4 percent. Analysts expected revenue of $4.08 billion for the quarter. Third-quarter net sales for General Mills' U.S. Retail segment totaled $2.48 billion, down 7 percent from the prior year.

General Mills CEO Ken Powell said, "We reported a decline in net sales as anticipated, primarily reflecting the Green Giant divestiture and continued foreign exchange headwinds. Constant-currency segment operating profit was down modestly, as our cost savings efforts more than offset the impact of the Green Giant sale."

General Mills reaffirmed its 2016 full-year growth outlook, which includes the impact of the Green Giant divestiture. Net sales in constant currency are expected to decline at a low single-digit rate from the 2015 levels that included a 53rd week. Total segment operating profit is expected to essentially match previous year's levels in constant currency. Constant-currency adjusted EPS is expected to grow at a low single-digit rate from the base of $2.86 in fiscal 2015.

The company anticipates the impact of the Green Giant sale, continued foreign exchange headwinds, and the comparison to the year-ago period that included an extra week will result in a reported decline in fourth-quarter net sales, total segment operating profit, and adjusted EPS.