General Mills, Inc. (NYSE: GIS) reported Q4 EPS of $0.67, $0.05 worse than the analyst estimate of $0.72. Revenue for the quarter came in at $4.28 billion versus the consensus estimate of $4.42 billion.

General Mills Chairman and Chief Executive Officer Ken Powell said, "Our plans for 2014 called for sales and earnings growth consistent with our long-term business model, along with increased cash returns to shareholders. We made good progress building our worldwide food businesses, and we returned more than $2.7 billion in cash to shareholders through a 17 percent dividend increase and significant share repurchase activity. But our sales and operating profit results were disappointing. In the fourth quarter, promotional spending in developed markets was less effective than we planned and input cost inflation was a bit above our forecast. Net sales and adjusted gross margin fell short of our targets."

General Mills said it has begun a formal review of its North American manufacturing and distribution network with the goals of streamlining operations and identifying potential capacity reductions. The company also has initiated efforts focused on further reducing overhead costs. Together, the new cost-reduction initiatives are targeted to generate savings of $40 million pretax in fiscal 2015, with additional savings expected in fiscal 2016. The company plans to announce further details in the coming months as specific actions are determined.

General Mills fiscal 2015 net sales are expected to grow at a mid single-digit rate in constant currency, including the contribution of a 53rd week in the fiscal period. Adjusted segment operating profit also is expected to grow at a mid single-digit rate in constant currency. Benefit of the extra fiscal week will be reinvested to support increased advertising and digital media initiatives, along with project expenses related to several key fiscal 2016 product launches. Adjusted diluted EPS is expected to grow at a high single digit rate in constant currency. At current exchange rates, the company estimates a 3-cent headwind from currency translation in 2015.

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