Reuters/Lucas Jackson
- General Mills shares tumbled Wednesday after the company reported fourth-quarter sales that fell short of analysts' expectations.
- The company better known for cereal products than cats and dogs acquired the pet food brand Blue Buffalo last year for $8 billion, and said the deal drove net sales during the most recent quarter.
- Track General Mills shares here in real-time.
General Mills shares fell as much as 9% Wednesday, badly underperforming the broader market, after the company reported sales for the fourth quarter that fell short of Wall Street's expectations.
While net sales came in at $16.86 billion for fiscal 2019, representing a 7% annual jump, they fell short of analysts' hopes for their quarter ending in late May. Organic sales dropped by 1% in that time.
Here's what General Mills reported compared with what analysts surveyed by Bloomberg expected:
- Revenue: $4.16 billion versus $4.24 expected.
- Adjusted earnings per share: $0.83 versus $0.77 expected.
While the Minneapolis-based manufacturer is better known for its cereal products like Cheerios and Lucky Charms than cats and dogs, it's betting pet food will be a boon for its sales.
General Mills' acquisition of Blue Buffalo, the pet food brand, was completed last April, and the company said the deal drove net sales for its fiscal 2019 year.
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"We'll look to improve our performance again in fiscal 2020, and we have plans in place to accelerate our organic sales growth while maintaining our strong margins and cash discipline," CEO Jeff Harmening said in a statement.
At the regional level, organic net sales growth in Asia and Latin America was offset by drops in North America, Europe, and Australia.
Wall Street analysts tracking General Mills are overwhelmingly cautious on the stock. Of those polled by Bloomberg, five recommend "buy," 13 recommend "hold," and two recommend "sell."
General Mills shares have risen 11% in the past year, outperforming the S&P 500's 7% rise in the same time.
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