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General Mills: Pet food sales pop but snack demand down



Shares of General Mills ( GIS ) The owner of Cheerios, Lucky Charms and Yoplait, fell 7% in early trading Wednesday after the company reported its latest quarterly results. This made General Mills the worst execution of the S&P 500 stock.

Sales lost forecasts, despite rising demand for the company's Blue Buffalo feed.

The weaker than expected revenue was largely due to a 2% decline in North American retail sales, which includes Annie's branded cheddar bunnies, Chex, Fruit Snacks and Fiber One and Nature Valley brands. bars.

General Mills said that the sale of other supermarket staples, such as cereals, yogurt and baked goods, remained stable during the quarter. But it was not enough to compensate for the weakness of the snacks.

Out of training & # 39; with today's food trends

The company's Fiber One bars "dropped out of step" with today's weight loss and dietary trends in the US, CEO Jeffrey Harmening said during a conference call with analysts.

"We need to get snacks again," said CFO Donal Mulligan, who said the company will ramp up its R&D spending on new products.

"You see us investing behind some really good ideas about bars and snacks," Mulligan said.

  Chewy hovering more than 70% in IPO

The good news for General Mills is selling the company's Blue Buffalo cap Products division is booming, surging 38% from a year ago. Operating profit also increased 82%.

General Mills bought Blue Buffalo in $ 8 billion in 2018, a move that seems to pay off. The strong stock market debut for online pet supplies retailer Chewy earlier this month is another sign of how Americans love to pamper their pooches and kitten.

But large food companies in general have been pushed lately. A shift in consumer taste has damaged many of the larger companies, as more people eat and drink healthier foods and drinks.

The increased gap of Amazon ( AMZN ) ] Walmart ( WMT ) and Target ( TGT ) in the grocery industry is also a problem for General Mills and its rivals. These mega-dealers have pushed food companies to keep prices low, making profit margins.
Shares of several other food companies tumbled Wednesday with General Mills. Smucker ( SJM ) Kellogg ( K ) McCormick (] ] ] Campbell Soup ( CPB ) and Hershey ( HSY ) were among the major losers in the S&P 500. Kraft Heinz ( KHC ) supported by Warren Buffett's Berkshire Hathaway BRKB ) was also a little down.

Kraft Heinz is one of the worst executive stocks of the year, doubling nearly 30% due to concerns about weak demand for its macaroni and cheese and Oscar Mayer meats.


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