(Reuters) -Pillsbury owner General Mills cut its annual sales and profit forecasts on Wednesday, as it takes a hit from choppy demand for salty snacks and pet food in North America amid competition from private-label rivals.
The company also missed Wall Street estimates for third-quarter sales, sending its shares down around 4% before the bell.
Consumers burdened with the still high inflationary prices, are on the lookout for cheaper alternatives for their day-to-day needs, despite General Mills cutting prices of its products including refrigerated baked goods.
Shoppers have also cut back on impulse snacking, reducing demand for snack bars, fruit snacks, and salty snacks at the company.
“The company expects macroeconomic uncertainty to continue to impact consumers in the fourth quarter,” the Cheerios maker said.
General Mills’ forecast echoes comments from peers Conagra Brands, Campbell’s and Kraft Heinz, which have signaled softening demand would crimp their profits.
The company expects full-year organic sales to be down 1.5% to 2%, compared with a prior forecast of flat to up 1%.
General Mills said its annual outlook did not include any impact from recent tariff actions by the Trump administration, as the implementation dates and scope of the levies remained uncertain.
Adjusted profit for the full year is expected to decline in the range of 7% to 8%, compared with a prior forecast of down between 1% to 3%.
The Betty Crocker parent also announced initiatives to target cost savings of at least $100 million in fiscal 2026.
For the third quarter ended February 23, it reported net sales of $4.84 billion, missing analysts’ estimate of $4.96 billion, according to data compiled by LSEG.
The Minnesota-based company posted an adjusted profit of $1 per share, above estimates of 96 cents per share.
(Reporting by Neil J Kanatt in Bengaluru; Editing by Shailesh Kuber)
