Shares in cereal behemoth General Mills Inc. (NYSE: GIS) moved seriously lower Wednesday, on reporting results for the fourth fiscal quarter ended May 26, 2019. Financial results for fiscal 2019 include contributions from Blue Buffalo Pet Products, Inc., which was acquired on April 24, 2018.
The Minneapolis-based GIS said net sales increased 7% to $4.16 billion and were up 9% in constant currency, driven primarily by the addition of Blue Buffalo. Organic net sales declined 1%, reflecting lower contributions from organic volume.
Gross margin declined 140 basis points to 35.1% of net sales.
Adjusted gross margin, which excludes certain items affecting comparability, declined 50 basis points to 35.3%, driven by higher input costs.
Operating profit totaled $716 million, up 34% from last year due primarily to lower restructuring, impairment, and other exit costs and the addition of Blue Buffalo, partially offset by lower gross margin.
Net earnings attributable to General Mills totaled $570 million compared to $354 million a year ago, reflecting higher operating profit and lower taxes and interest expense.
CEO Jeff Harmening said, "I’m pleased to say that we executed well, successfully transitioned Blue Buffalo into our portfolio, and delivered our financial commitments in fiscal 2019.
"We’ll look to improve our performance again in fiscal 2020, and we have plans in place to accelerate our organic sales growth while maintaining our strong margins and cash discipline."
Shares started Wednesday slipped $4.51, or 8.4%, to $49.19
