General Mills (GIS) Plans to Exit Underperforming Products; Sees No Impact on EPS for Q210
General Mills, Inc. (NYSE: GIS) decided to exit certain underperforming products in its U.S. Retail segment to rationalize capacity for more profitable items. The products we are exiting generated approximately $35 million in net sales in fiscal 2009. As a result of our decisions, we recorded a $24.1 million non-cash restructuring, impairment and other exit charge against the related long-lived assets in the second quarter of fiscal 2010 ending November 29, 2009. There were no employees affected by these actions. We expect to recognize an additional $2.5 million of other exit costs related to these actions in future periods. We anticipate that these actions will be completed by the end of the second quarter of fiscal 2011.
The fiscal 2010 second quarter charge is consistent with our 2010 full-year earnings guidance, which includes an estimated $30 million in restructuring, impairment and other exit costs. We expect that our second quarter 2010 earnings per share will be no less than the current ThomsonReuters mean consensus estimate of $1.43, including this charge and before any impact from mark-to-market valuation of certain commodity positions.
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