Overview

• Adjusted EPS reached $0.86 on revenue of $4.52 billion, narrowly topping forecasts as shares fell after the release.
• Reported net sales declined 7% year over year, with organic sales down 3% and margin pressure reflected in a 210-basis-point drop in adjusted operating margin to 15.7%.
• A $1.05 billion gain from the U.S. yogurt divestiture drove reported operating profit to $1.7 billion, while adjusted operating profit fell 18% in constant currency to $711 million.
• North America Retail weakened sharply with sales down 13% and organic sales down 5%, Pet posted a 6% revenue lift from the Whitebridge deal despite a 5% organic decline, and International grew 6% with 4% organic growth.
• Operating cash flow fell to $397 million from $624 million a year earlier, the company reaffirmed full-year guidance for flat to slightly negative organic growth and a 10%–15% decline in adjusted profit, and it emphasized innovation including Blue Buffalo’s fresh pet rollout as a growth lever.