Yoplait sales dip, General Mills profit down 9%

Consumers' growing preference for Greek yogurt over traditional yogurt is hurting General Mills' bottom line.

General Mills, the maker of Yoplait, Cheerios and Wheaties, said Tuesday its fiscal second quarter net income fell 9% as sales in yogurt, refrigerated cookie dough and soup drove total sales down 1%.

Declines in sales of Yoplait, as well as reduced sales of Pillsbury refrigerated dough and Progresso soup, drove the Minneapolis-based food maker's U.S. sales down 9% to $2.52 billion. More consumers did opt for General Mills' organic offerings such as Annie's cereals and snacks, and Lärabar food bars, helping offset the other declines. Sales of Totino's frozen hot snack were up, too.

Decreased sales of Yoplait in Europe also cut into General Mills' international sales, which fell 5% to $1.10 billion. However, Yoplait sales were up in China. European customers bought more Häagen-Dazs ice cream during the quarter, while in Canada, General Mills sold more Old El Paso Mexican products and Nature Valley grain snacks in Canada.

General Mills has seen its yogurt revenue fall as Greek yogurt competitors such as Dannon and Chobani have taken some of its business away. The company's U.S. yogurt revenue in the 2016 fiscal year fell 10.4% to $1.34 billion, according to IBISWorld.

To tap into consumers' changing yogurt tastes, General Mills has launched a new line of Annie's organic yogurt and premium Liberté yogurt aimed at adults. Other changes include using whole milk in Yoplait Kid yogurt and increasing protein content in Yoplait Greek 100.

"Although we posted disappointing net sales performance in the second quarter, we delivered good growth in adjusted diluted EPS, driven by significant expansion in our adjusted operating profit margin," said General Mills Chairman and CEO Ken Powell said in a statement. "We remain confident that our strategy of investing behind Consumer First ideas – while driving strong margin expansion – will generate long-term sustainable growth, robust cash flow, and top-tier returns for our shareholders."

Overall sales during Sept.-Nov. period fell 7% to $4.1 billion, compared to $4.4 billion a year ago. That fell short of expectations of $4.2 billion. Also affecting sales comparisons were General Mills' sale of Green Giant in September 2015 to B&G Foods.

Net income fell 9% to $481.8 million, down from $529.5 million in the period a year ago. That missed analysts' expectations of $512.4 million.

General Mills (GIS) shares were down 3% in midday trading Tuesday to $61.10.

Follow Paste BN reporter Mike Snider on Twitter: @MikeSnider.