General Mills is focusing on ‘restructuring actions’ in its yogurt business and closing a facility in Carson, Calif. The company also reaffirmed its end-of-year financial targets at an investor conference in New York.
The General Mills fiscal year ends in May, and it expects to close the manufacturing facility in Carson, where it produces Yoplait and Mountain High products, by the end of FY 2021.
According to the filing it made with US Securities and Exchange Commission (SEC), the decision was made “to drive efficiencies in targeted areas of our global supply chain by consolidating production and optimizing our labor, logistics and manufacturing platforms.”
The company expects the closure to cost roughly $130m, including $25m of severance for cut jobs. The exact number of jobs being eliminated has not been revealed.
General Mills also spoke at the Consumer Analyst Group of New York (CAGNY) investor conference this week about its financial targets.
It projects that organic net sales are still expected to be in a range between flat and up 1%, and net sales are will increase between 9%-10% in constant currency. The constant-currency adjusted operating profit is also expected to increase by 6%-9%.
General Mills described three global growth priorities it’s following to drive consistent growth:
1) Competing effectively through strong innovation, effective consumer marketing, and excellent in-store execution.
2) Accelerating growth on its four differential growth platforms including Häagen-Dazs ice cream, snack bars, Old El Paso Mexican food, and its portfolio of natural and organic food brands.
3) Reshaping its portfolio through growth-enhancing acquisitions and divestitures, including the acquisition of Blue Buffalo, the leading brand in the fast-growing wholesome natural pet food category in the US.”
General Mills said, “For fiscal 2019, we currently expect: foreign currency exchange rates (based on blend of forward and forecasted rates and hedge positions) to reduce net sales growth by 1%-2%; acquisitions and divestitures to increase net sales growth by high single digits; foreign currency exchange rates to have an immaterial impact on adjusted operating profit and adjusted diluted EPS growth; and total restructuring charges and project-related costs related to actions previously announced to total approximately $85m.”