General Mills Slumps as Sales Drop Amid ‘Challenging Operating Environment’

Shares of General Mills ( GIS ) slumped Wednesday after the consumer foods giant posted weaker-than-expected revenue and gave soft guidance on lower prices and volumes.

The maker of Cheerios cereal, Betty Crocker cake mixes, and Blue Buffalo pet food reported fiscal 2024 fourth-quarter sales of $4.71 billion, a 6.3% year-over-year decline and below the consensus estimate of $4.85 billion of analysts surveyed by Visible Alpha. Adjusted earnings per share (EPS ) of $1.01 exceeded forecasts by $0.02.

North American retail sales dipped 6.9% to $2.85 billion. Pet sales slid 8.1% to $602.1 million, while international sales tumbled 10.4% to $667.5 million. The only unit with positive growth was North American foodservice, which saw revenue rise 4.4% to $589.0 million.

The company blamed the slide to “unfavorable net price realization and mix and lower pound volume.”

Volumes slipped 2 percentage points, with the North American retail and pet segments falling 6 and 7 percentage points, respectively. The North American foodservice group had volumes increase 3 percentage points, and international volumes gained 1 percentage point.

CEO Says Company Faced ‘A More Challenging Operating Environment’

CEO Jeff Harmening said General Mills faced “a more challenging operating environment.” The company expects fiscal 2025 adjusted EPS to be down 1% to up 1% in constant currency from the $4.52 earned in fiscal 2024, short of forecasts.

General Mills announced that its board raised its quarterly dividend by a penny to $0.60 per share, which will be payable August 1 to shareholders of record on July 10.

The news sent General Mills shares down 5.3% to $63.70 as of 10:07 a.m. ET Wednesday and into negative territory for 2024.