General Mills Inc. (NYSE: GIS) reported first-quarter fiscal 2015 results before markets opened Wednesday. The food processing and packaged foods maker reported quarterly adjusted diluted earnings per share (EPS) of $0.61 on revenues of $4.27 billion. In the same period a year ago, General Mills reported EPS of $0.70 on revenue of $4.37 billion. First-quarter results also compare to the Thomson Reuters consensus estimates for EPS of $0.69 and $4.38 billion in revenue.
At the end of last quarter the company said it would undertake new cost-reduction projects that it expects to generate supply chain cost savings of more than $400 billion in the 2015 fiscal year. In Wednesday’s report, General Mills said that a review of its North American manufacturing and distribution network has identified streamlining and potential capacity reductions that are expected to generate $100 million in cost savings by 2017. The company said, “Actions associated with this project are expected to commence in the second quarter of 2015.” Plant shutdowns and worker firings are the most likely actions, although the company gave no specific information.
General Mills reiterated its full-year targets of top-line growth and segment operating profit in the mid-single digit range. Adjusted EPS is expected to grow at high single-digit rates in constant currency. Currency translation effects are expected to cost the company $0.02 in full-year earnings per share.
The company’s CEO said:
Our results were driven by sales and profit declines in the U.S., where industry trends were weak in the quarter. In addition, higher merchandising expense for our U.S. Retail businesses in this period depressed reported net sales and gross margin.
Shares were down about 3.3% in premarket trading Wednesday morning, at $51.45 in a 52-week range of $46.70 to $55.64. Thomson Reuters had a consensus analyst price target of around $53.40 before the results were announced.