General Mills’ New Pet-Food Business Slows Down
General Mills is struggling to revive sales in the U.S. as growth in its new pet-food business slows.
The food maker’s sales rose 8.6% to $4.09 billion in the latest quarter, driven by international revenue. General Mills’ sales in its main North American market dropped 2.1% to $2.39 billion, more than analysts expected. Shares, down 19% year to date, were off 7.9% at midday Tuesday.
The Minneapolis-based conglomerate has tried to offset stagnant sales with a move into high-end pet food, a business that is expanding rapidly compared with packaged, process food. General Mills completed the acquisition of Blue Buffalo for $8 billion in April and has focused since on getting the pet food into more stores.
General Mills’ pet-food sales rose 14% in the latest quarter to $343.4 million on a comparable basis. Sales at retailers increased 9%. That is faster sales growth than for the company’s main packaged foods, but a slowdown from Blue Buffalo’s sales when General Mills agreed to buy it in February.
“If all my businesses had decelerated to 9% growth, I’d be in pretty good shape,” Chief Executive Jeff Harmening said in an interview.
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