Lower merchandising activity in the US Cereal operating unit and lower volume in US Snacks pushed North America Retail segment sales down 3% to $2.68 billion.
For fiscal 2019, organic net sales are expected to be flat to up 1%. Including the impact of the Blue Buffalo acquisition, net sales are expected to increase 9-10% in constant currency. Constant-currency adjusted operating profit is expected to increase 6-9% from the base of $2.6 billion reported in fiscal 2018. Constant-currency adjusted diluted EPS are expected to range between flat and down 3%. The cereal maker expects free cash flow conversion of at least 95%of adjusted after-tax earnings. Currency translation is now expected to reduce reported net sales by 1-2 percentage points in fiscal 2019 and is not expected to have a material impact on full-year adjusted operating profit or adjusted diluted EPS.
Back in February, Blue Buffalo Pet Products was acquired by General Mills for about $8 billion ($40 per share) in cash.
Blue Buffalo was a leading pet food company that saw growth in the green over the past few years through its natural treats for dogs and cats. The company’s most prominent brand BLUE tops the list of Wholesome Natural pet foods, posting over $1 billion in net sales last year.
Last week, Sean Walker was named Group President of General Mills’ Asia & Latin America segment effective Feb. 1, 2019. Walker will report to Chairman and CEO Jeff Harmening and will join the company’s global senior leadership team. Walker was most recently SVP, Strategy for the company, and has been responsible for transitioning the Blue Buffalo Pet Food business into General Mills.