General Mills reduced its projected annual profit because snack and refrigerated baked goods sales remained weak in an economy affected by new tariffs and changing consumer preferences.
The company now predicts adjusted full-year earnings to decrease between 10% and 15% which exceeds analysts’ forecast of a 4.8% decline. CEO Jeff Harmening stated that consumer wariness stems from inflationary pressures caused by tariffs and global conflicts and regulatory uncertainties.
The company’s stock price decreased by 2% during the first part of trading after the company released its revised outlook. The company introduced new products including a redesigned Blue Buffalo pet food but analysts believe marketing expenses together with acquisition costs reduce profit margins.
The company generated $4.56 billion in fourth-quarter sales which fell below market predictions. The North American retail segment which represents the company’s biggest market segment reported a 10% decline in sales but the pet food division achieved a 12% increase in sales.
The company achieved adjusted earnings of 74 cents per share which exceeded the predicted 71 cents per share.
General Mills must overcome increasing margin challenges and unstable consumer confidence while managing rising production expenses and strategic investments to achieve growth.
