NEW YORK (AP) — General Mills cuts its sales and profit outlook for the year on Friday, citing persistent sales weakness in the U.S. food industry.
The maker of Cheerios cereal, Yoplait yogurt and Progresso canned soups had already announced this summer plans to slash costs in response to weak sales. Other packaged food makers including Kellogg Co. are cutting costs as a way to offset weak sales as well.
Shares of General Mills fell 4 percent to $51.15.
Many major U.S. food companies have been adjusting their operations as they struggle to keep up with changing American eating habits. Executives at packaged food companies in particular have noted the trend away from the center aisles of supermarkets, where shelf-stable products like cookies and canned goods are sold, in favor of products perceived to be fresher or healthier.
As such, some companies have been looking to change up their stable of products. Campbell Soup, for instance, acquired Plum Organic baby food and Bolthouse Farms, which makes premium bottled juices and packaged carrots. And General Mills in September acquired Annie's, which makes organic packaged food, including rabbit-shaped macaroni and cheese.
For its fiscal 2015, General Mills Inc. says adjusted earnings per share are now expected to rise at a low single-digit rate from last year's $2.82 per share, down from its previous forecast of growth in the high single digits.
Sales are expected to grow at a low-single-digit rate from last year's $17.9 billion, down from its previous forecast of growth in the mid-single digits.
Adjusted earnings for the quarter ending Nov. 23 are expected to be between 75 and 77 cents per share. Wall Street analysts on average had forecast 88 cents per share, according to FactSet.
This summer, General Mills said it was taking measures to slash costs by $40 million in fiscal 2015, which ends in May. By fiscal 2016, General Mills said Friday the cumulative annual savings are expected to total between $260 and $280 million.