Cereal giant General Mills announced this week plans to cut costs and find $40 million in pretax savings over the next year as it overhauls its North American manufacturing and distribution network.
General Mills said it expected net sales to grow at a mid-single-digit percentage rate in fiscal 2015, with adjusted earnings per share growing by high-single digits. U.S. sales of branded product fell 1% in the fourth quarter to $2.4 billion — representing 60% of the company’s annual revenue.
The company’s U.S. segment owns such as brands as Progresso soup, Pillsbury frozen and Green Giant. The U.S. segment while disappointing, fared better than the company’s international segment, whose sales fell 7% to $1.3 billion in the recent quarter.
Net sales fell 2.9% to $4.28 billion. Analysts had expected sales of $4.42 billion.Net income rose 10.4%t to $404.6 million, or 65 cents per share from $366.3 million, or 55 cents per share, a year earlier. The earnings included a 6-cent gain from the sale of several grain elevators and a 9-cent charge linked to the devaluation of Venezuela’s currency.
General Mills said it would launch healthier products and revamp and promote its existing ones to revive sales that have slipped for three straight quarters.
"Consumers today are seeking more protein at breakfast and we are responding,"CEO Ken Powell said during a post-earnings conference call on Wednesday.
Part of the reason the cereal maker is jumping into the crowded pool of better-for-you- products is because private label products and protein laced yogurt are taking market share in the breakfast category.
General Mills’ Cheerios cereals and has struck a deal with McDonald's Corp to have its Yoplait yogurts offered with Happy Meals in thousands of outlets from next month. The company also said it will began marketing its own cereals as protein rich, having recently launched protein-based Nature Valley granola bars.
General Mills is large supplier to Wal-Mart Stores Inc., operating a large sales office in Rogers.