Minneapolis-based food group General Mills today (22 March) posted a 9% increase in net earnings, which rose to $268m in the third quarter on the back of improved margins and sales growth.
Go deeper with GlobalData
Discover B2B Marketing That Performs
Combine business intelligence and editorial excellence to reach engaged professionals across 36 leading media platforms.
General Mills chairman and CEO Steve Sanger said: “This was another quarter of broad-based sales growth and margin expansion for the company. We’re generating a combination of good unit volume gains, favourable mix and supply chain productivity, which is helping to offset input cost inflation. As a result, we have been able to increase our level of consumer marketing investment and also raise our earnings guidance for the year.”
Net sales for the quarter, ended 25 February, increased to $3.05bn – up 6% from the same period of last year. Unit volume grew 5% worldwide, gross margins improved by 80 basis points and segment operating profits rose 9% to $522m. Diluted EPS also increased 9%, totalling 74 cents.
In the US, net sales were up 5% to $2.11bn, driven by a 5% unit volume growth. Operating profits grew 6 percent to $447m, as volume leverage and productivity offset higher input costs, General Mills said. Net sales in the group’s baking division led the sales increase, expanding by 11%, while the company’s meals unit increased sales by 10% and the Yoplait division posted a 9% sales increase. Snacks sales were up 8% and Pillsbury sales increased by a more modest 3%. However, General Mills’ US cereal sales were down 4% during the quarter.
Internationally, sales rose 15% during the period, increasing to $510m. Unit volume grew 6% while price and mix added 5 points.
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalDataLooking to the full year, General Mills said that its strong performance had led it to increase its outlook.
“Our businesses are performing very well in the aggregate and financial performance through the first nine months of this year is ahead of our plans,” said Sanger. “We are raising our guidance for 2007 diluted earnings per share to a range of $3.14 to $3.16.”
Previously, the company had targeted diluted EPS of between $3.09 and $3.13 per share.
