North American Retail segment remains weak
General Mills’ (GIS) largest business segment—North American Retail—continues to disappoint with its weak sales performance. The segment’s net sales decreased 2% YoY (year-over-year) to $2.4 billion, reflecting lower volumes. Tough YoY comparables also remained a drag. The segment’s organic sales decreased 1% as lower volumes of -2% more than offset the 1% gain from higher pricing and mix.
In its North American Retail segment, the U.S. Snacks business reported a 4% decline YoY as benefits from innovation-based product launches for Lärabar and Epic bars were more than offset by lower sales of Fiber One snack bars. In Canada, the segment’s net sales fell 4%, and its U.S. Meals and Baking business was down 2% YoY due to the divestiture of Green Giant.
U.S. Yogurt sales continued to remain weak, decreasing 2% YoY. Its innovation-led new products Oui and YQ are gaining traction. However, lower sales of Greek and light yogurt more than offset the benefits. Sales of U.S. Cereal increased 1%.
Convenience Stores & Foodservice segment
Net sales for General Mills’ Convenience Stores & Foodservice segment grew 4% to $0.5 billion, led by growth in snacks and frozen meals. The segment’s organic sales increased 4% YoY, reflecting 5% higher pricing, partially offset by lower volumes of -1%.
Net sales for its Pet segment increased 14% on a pro forma basis to $0.3 billion, reflecting higher volumes, increased pricing, and a favorable mix. The segment’s sales benefit from continued expansion in the food, drug, and mass channel, coupled with growth in the e-commerce channel. However, the pet specialty channel remained a drag.
Europe and Australia segment
General Mills’ net sales for its Europe and Australia segment increased 2% to $0.5 billion, reflecting a higher net price realization and improved mix. Organic sales rose 1%.
Asia and Latin America segment
Net sales for its Asia and Latin America segment rose 2% to $0.4 billion, reflecting higher volumes and improved pricing and mix. However, adverse currency rates remained a drag. Organic sales rose 8%, driven by higher sales in China, India, and Brazil.