General Mills, Inc. (NYSE: GIS) announced its financial results for the second quarter of 2017, with sales and profits decreasing on Tuesday.
In the statement, net sales of the company dropped 7.1% to $4.11 billion due to the lower organic sales, which fell 4% in the second quarter. Profits reached $481.8 million, or $0.80 per share, decreasing from $529.5 million, or $0.87 per share the same period last year. Net income dropped 9% to $481.8 million, from $529.5 million last year. The net income was below analysts' expectations of $512.4 million.
“Although we posted disappointing net sales performance in the second quarter, we delivered good growth in adjusted diluted EPS, driven by significant expansion in our adjusted operating profit margin,” said Ken Powell, the Chairman and Chief Executive Officer of General Mills. “We're making targeted adjustments to our plans in the second half to improve our topline performance while still delivering our margin expansion and EPS growth commitments.”
In Europe, sales of Yoplait dropped, which is one of the reasons of decreasing international sales. However, sales of Yoplait rose in China. In Canada, Old El Paso Mexican products and Nature Valley grain snacks, which are General Mills’ products, became more popular.
In the statement, the company also updated its outlook for whole-year fiscal 2017.
Organic net sales growth is expected to drop between 3% and 4%, which is below the previous estimates of flat to down 2%. Adjusted operating profit margin remained the previous expectation of increasing 150 basis points, and constant-currency adjusted diluted EPS growth is expected to be 6% to 8% from $2.92 per share in fiscal 2016. Diluted EPS is expected to decrease 1% due to the currency translation.