General Mills, Inc. (NYSE:GIS) stock took a hit Friday as the company updated its forecast for 2017, lowering the estimate of what investors can expect out of its revenue.
For the fiscal year, the maker of Cheerios and Betty Crocker cake mixes said Friday that net sales will suffer a 4% dip this year compared to fiscal 2016. General Mills previously expected revenue to suffer a drop in the range of 3% to 4%.
Additionally, the company predicts that its adjusted operating profit margin will come in north of 18% for fiscal 2017, marking a surge of more than 120 basis points compared to the previous year.
It has been a rough year for General Mills as its soup and yogurt products have not been as popular as before. A company spokesperson said the drop happened “due primarily to a widening gap between the company’s level of promotional activity and that of competitors in the U.S. yogurt and soup categories.”
The company also suffered a setback due to the fact that its proposed merger with a fellow industry giant may not be happening anymore. General Mills was rumored to be the subject of a takeover bid from Kraft Heinz Co (NASDAQ:KHC).
However, Kraft may be looking to buy Unilever N.V. (ADR) (NYSE:UN) instead, which would see the company pulling out of a potential acquisition offer for General Mills.
GIS shares fell 3.4% Friday. KHC shares surged 7.9%, while UN shares skyrocketed 14.3%.