General Mills earnings drop in first quarter

by World Grain Staff
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MINNEAPOLIS, MINNESOTA, U.S. — New products drove solid sales gains at General Mills, Inc. even as earnings fell in the first quarter of fiscal 2014.

Net income in the quarter ended Aug. 25 was $459.3 million, equal to 71¢ per share on the common stock, down 16% from $548.9 million, or 84¢ per share, during the same quarter of the previous year. Last year’s results included a 7¢ per share benefit from mark-to-market valuation of certain commodity positions and a 10¢ net benefit related to a discrete tax item. The benefits partially were offset by 1¢ per share in charges related to restructuring actions taken during 2012 and acquisition-related integration expense.

Adjusted EPS totaled 70¢ per share in the just ended first quarter, up from 66¢ in the first quarter of fiscal 2013. 

Sales for the quarter were $4.372 billion, up 8% from $4.051 billion during the same quarter of the previous year. New products contributing to net sales growth in the quarter included Yoplait Greek yogurt, Nature Valley Soft-baked Oatmeal Squares, Honey Nut Cheerios Medley Crunch cereal, Pillsbury gluten-free refrigerated dough products, new Helper dinner mix varieties and, in Brazil, new Yoki Kit Facil dinner mixes. Established brands such as Lucky Charms and Cinnamon Toast Crunch cereals, Progresso Light ready-to-serve soups, Yoplait Greek 100-calorie yogurt, Totino’s frozen pizza and snacks, Larabar fruit and nut energy bars and, in China, Wanchai Ferry frozen dumplings and dim sum varieties, also contributed to net sales growth, the company said.

Ken Powell, chairman and chief executive officer, said the first-quarter performance represented a solid start to the new fiscal year.

“In particular, our net sales growth in the quarter reflects a healthy mix of gains from established brands, strong introductory shipments for new products, and contributions from new businesses added to our portfolio,” he said. “These first-quarter results have us on track to achieve the key financial targets we've set for fiscal 2014.”

Operating profit within the International segment eased 0.2% to $125.6 million from $125.8 million, while sales increased 22% to $1.320 billion from $1.085 billion. General Mills said net sales in Latin America nearly tripled on a constant currency basis, including incremental contributions from Yoki, and constant currency net sales in Canada rose 21%, including the Yoplait business that transitioned to direct ownership in September 2012.


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