Shares in the US food giant General Mills fell by as much as four per cent in early trading as the company reported its quarterly earnings had slipped below expectations
The maker of Cheerios and other breakfast cereals reported its operating profit margin was down 18.7 per cent on the previous year, and net sales declined seven per cent to $4.1bn (£3.3bn).
Read more: Cheeri-nos: Major recall of cereal
Forecasts for 2017 were also cut as General Mills said it expects 2017 sales excluding acquisitions and divestitures to fall three to four per cent. Previously, sales were expected to be flat to down two per cent.
Why it's interesting
Competition and lower demand caused sales of its Yoplait yoghurt, Progresso soups and Pillsbury refrigerated dough to slide nine per cent in the US, where General Mills gets 60 per cent of its sales.
The declines offset increases in sales of its natural and organic product lines Annie's and Larabar, Old El Paso Mexican products and Totino's frozen snacks.
What General Mills said
General Mills chairman and chief executive Ken Powell said:
Our organic sales declines reflect the actions we've taken to optimise our spending and prioritise profitable volume, as well as weakening food-industry trends in the US. We're making targeted adjustments to our plans in the second half to improve our topline performance while still delivering our margin expansion and EPS growth commitments.
What an analyst said
Edward Jones analyst Brittany Weissman said the company's yoghurt sales will continue to slip as it works to introduce new organic and drinkable yoghurt products, Reuters reported.