General Mills eyes cost cuts amid poor sales, weak forecast

General Mills announced a new push to cut costs as the maker of Cheerios, and Yoplait reported a sales decline in its latest quarter.

The Golden Valley-based food giant has been struggling to boost its cereal and yogurt sales amid stiff competition.

On Wednesday, it acknowledged "disappointing" sales and operating profits for all of fiscal 2014, which ended in May and projected only "mid single-digit" growth in net sales for the new 2015 fiscal year.

The company didn't detail where the coming cuts would come from or if they'd involve layoffs, but said it expected the latest round would generate $40 million in savings in fiscal 2015.

"We've begun a formal review of our North American manufacturing and distribution network with the goal of streamlining operations and identifying potential capacity reductions," said Don Mulligan, the company's financial officer. "We've initiated efforts focused on further reducing overhead costs."

For the quarter, General Mills earned $405 million, about 11 percent more than the same period a year ago. Sales fell about 3 percent to $4.3 billion. The company also took a hit from foreign exchange losses tied to currency devaluation in Argentina.

"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," chief executive Ken Powell said in statement.

Revenue and sales numbers for the quarter came in below stock analyst expectations for the third time in a row, according to the corporate research firm Zacks.

General Mills shares fell as much as 4 percent in value following the earnings report.

The Associated Press contributed to this report.