US food company General Mills has reported a 35% rise in net income for the first quarter to US$548.9m on the back of acquisitions and sales growth in Europe and Canada.
Net sales for the 13 weeks to 26 August rose by 5% to $4.05bn which the company said reflected contributions from acquired businesses.
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General Mills, which includes Cheerios cereal among its brands, recorded strong growth from its international operations, with net sales for the quarter increasing by 27% to $1.09bn and operating profit up by 56% at $126m. On a constant-currency basis, international sales grew by 36%, the company said, with gains of 51% and 28% in Europe and Canada respectively.
However, the Minneapolis-based company said US retail sales had fallen by 1% to $2.49bn, with operating profit down by 2% at $575m. The company’s snacks, baking products, meals and Small Planet foods divisions recorded net sales gains for the quarter, but sales at its Big G, frozen foods and Yoplait units all fell, the company stated.
Chairman and CEO Ken Powell said the first-quarter performance put the company on target to achieve its fiscal 2013 targets. “Results for the first quarter were broadly consistent with our plans, and included sequential improvement in our volume and gross margin trends from the fourth quarter of 2012,” he said.
Powell added that General Mills’ core US markets were seeing “slow improvement in price and volume trends” and as the company moves into the second quarter it would be “putting full advertising support” behind its new products, with “strong levels of in-store merchandising” planned across its product categories. Powell said the company’s established international businesses were “showing good momentum”. General Mills reaffirmed its full-year profit guidance of approximately $2.65 per share.
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By GlobalData
