MINNEAPOLIS — General Mills, the food company behind Cheerios cereal and Yoplait yogurt, reported disappointing fiscal first-quarter results Wednesday and announced plans to cut costs further to fight falling sales.
Its shares fell more than 3 percent in morning trading Wednesday.
The Minneapolis company said it is reviewing its manufacturing and distribution network. It said the cost-cutting initiative could save it $100 million per year by fiscal year 2017. It plans to take action in its fiscal second quarter, but gave no details, except that it may assume severance costs. A spokeswoman for the company declined to comment about any possible job cuts.
In June, the company announced another cost-reduction initiative that will help it save $400 million in fiscal year 2015.
To try to boost sales, the company has been tweaking its recipes and getting into new food categories and consumers' tastes change. It gave Cinnamon Toast Crunch cereal a stronger cinnamon taste, removed aspartame sugar substitute from Yoplait Light and released a new line of Cheerios with added protein.
It announced earlier this month that it plans to buy Annie's, the maker of rabbit-shaped organic mac and cheese, for $820 million. The deal is expected to close later this year.
General Mills reported fiscal first-quarter profit of $345.2 million. On a per-share basis, it said it had profit of 55 cents during its fiscal first. Earnings, adjusted for non-recurring costs and restructuring costs, were 61 cents per share.
The results fell short of Wall Street expectations. The average estimate of analysts surveyed by Zacks Investment Research was for earnings of 69 cents per share.
The company posted revenue of $4.27 billion in the period, also falling short of Street forecasts. Analysts expected $4.42 billion, according to Zacks.
General Mills Inc. shares fell $1.92, or 3.6 percent, to $51.26 in morning trading. Its shares had been up 6.6 percent so far this year through Tuesday's close.