General Mills misses third-quarter sales estimates
Retailers' inventory reduction impacts quarterly sales
Plans new cost-saving initiatives for fiscal 2026
Forecasts sharp decline of 7% to 8% in annual profit
Adds details from prepared remarks in paragraphs 4 & 5, and details from results in paragraph 6
March 19 (Reuters) - General Mills GIS.N cut its annual sales and profit forecasts on Wednesday, as the Pillsbury owner takes a hit from choppy demand for salty snacks and pet food in North America amid competition from private-label rivals.
The company also missed Wall Street estimates for third-quarter sales, sending its shares down around 4% before the bell.
Several packaged food companies – including Conagra Brands CAG.N, Campbell's CPB.O and Kraft Heinz KHC.O – have flagged a tough demand backdrop as price-sensitive shoppers spent mindfully on branded snacks and cut back on frequent restaurant trips.
General Mills said an "unexpected" inventory reduction by retailers in its retail and pet food segment hampered its quarterly sales.
"It's been a challenging year in fiscal 2025, with prolonged value-seeking consumer behaviors and volatility in the operating environment creating significant headwinds," CEO Jeff Harmening said in prepared remarks ahead of a conference call.
Volumes in the reported quarter fell by 4 percentage points and organic sales fell by 5%, despite prices being down by 1 percentage point.
The Minnesota-based company expects full-year organic sales to be down 1.5% to 2%, compared with a prior forecast of flat to up 1%.
Its annual outlook did not include any impact from recent tariff actions by the Trump administration, as the implementation dates and scope of the levies remained uncertain, according to the company's statement.
Adjusted profit for the full year is expected to decline in the range of 7% to 8%, compared with a prior forecast of down between 1% to 3%.
General Mills faces risks to its profit margin from its increased marketing and media investments, along with higher supply chain costs and the lower costs of products.
The Betty Crocker parent is also planning new initiatives targeting cost savings of at least $100 million in fiscal 2026.
It reported net sales of $4.84 billion for the quarter ended February 23, missing analysts' estimate of $4.96 billion, according to data compiled by LSEG.
Adjusted profit came in at $1 per share, above estimates of 96 cents per share.
(Reporting by Neil J Kanatt in Bengaluru; Editing by Shailesh Kuber)
((Neil.JKanatt@thomsonreuters.com;))
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