General Mills on Wednesday reported net sales fell for a fifth straight quarter, with U.S. sales being hurt in particular by its yogurt business, but earnings beat analysts’ estimates.
Net sales overall were down 7% to $3.9 billion for the first quarter while U.S. sales dropped 8% to $2.33 billion. In the U.S., strong gains in Annie’s and Lärabar natural and organic products, Nature Valley cereals, and Old El Paso Mexican products were offset by declines in Yoplait yogurt and Progresso soup.
Sales of Häagen-Dazs ice cream and Yoplait also fell internationally, with the overseas segment posting a 6% net sales decline to $1.13 billion.
“Our net sales performance did not meet our expectations due to the challenging macro environment, a difficult year-over-year comparison, and a slower start to the year on certain businesses,” General Mills CEO Ken Powell said in a news release.
But the company also reported better-than-expected profit of 78 cents per share, excluding certain items. The average analyst estimate was 75 cents per share, according to Thomson Reuters I/B/E/S.
Like other processed food companies, General Mills has been struggling as U.S. consumers switch to foods they consider to be healthier. It has responded to weak U.S. sales by cutting jobs, selling plants and exiting less-profitable brands.
Cost of sales for the first quarter fell 6% to $2.5 billion, while selling, general and administrative expenses were down 12%.
On Wednesday, General Mills reiterated its full-year 2017 target of organic net sales growth from flat to down 2%. “We expect our organic net sales performance will improve over the remainder of the year as key Consumer First initiatives gain traction and as our prior-year comparisons ease,” Powell said.
The company’s shares rose 0.9% to $65.26 in trading Wednesday.