Packaged food giant General Mills (GIS) announced Wednesday morning that it had missed expectations for its 2014 fiscal year. The company earned $1.8 billion, down 1.7% from the prior year, despite the fact that net sales actually increased by around 1%. Net earnings for the quarter ended May 25, 2014, were $404 million, up about 10% from the same quarter the previous year.

This decrease in annual earnings means that the company will seek to cut costs for the coming year, according to the earnings release.

“We have started work on several new cost-reduction initiatives designed to boost our efficiency and sharpen business focus behind our key growth strategies,” CEO Ken Powell stated in the release.

A major problem for the Cheerios-maker is that, faced with so many other options in the morning, Americans are eating less cereal. Rival Kellogg has even tried to position cereal as an evening snack.

General Mills is expecting to save $40 million pretax as a result of the cost-cutting maneuvers, with more savings expected to follow in the 2016 fiscal year.

Though the release did not give any specific actions General Mills will take to reduce operating costs, it did say that the company had started a review of its North American manufacturing and distribution network.