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The company's shares fell as much as 5 percent
to $50.50 before the bell on Wednesday.
General Mills said sales at its U.S. retail business, which
sells brands such as Green Giant canned and frozen vegetables
and Progresso soup, fell 5 percent in the first quarter ended
Aug. 24.
The division, which accounts for more than half of the company's
total revenue, has been hit by intense competition from private
label brands and new breakfast options such as frozen egg
sandwiches and yogurt.
General Mills has been cutting costs and increasing its share of
the fast-growing natural foods market to revive sales, which
have declined for four straight quarters.
The company last week said it would buy organic food producer
Annie's Inc for about $820 million.
The food retailer also struck a deal with McDonald's Corp to
have its Yoplait yogurts offered with Happy Meals in thousands
of outlets.
General Mills said on Wednesday it expects to save about $100
million in costs by fiscal 2017 as it continues to review its
North American operations and cuts costs.
The company's net income fell to $345.2 million, or 55 cents per
share, in the first quarter ended Aug. 24, from $459.3 million,
or 70 cents per share, a year earlier.
Sales fell 2.4 percent to $4.27 billion.
Excluding items, the company earned 61 cents per share.
Analysts on average had expected the company to earn 69 cents
per share on revenue of $4.38 billion, according to Thomson
Reuters I/B/E/S.
The Minneapolis, Minnesota-based company's shares closed at
$53.18 on Tuesday.
(Reporting by Ramkumar Iyer in Bangalore; Editing by Sriraj
Kalluvila)
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