First quarter 2007 earnings at US food producer General Mills were up 5.9%, totalling US$267m, while EPS increased by 16% to 74 cents a share, the company said yesterday (21 September). Gains were driven by a resurgence of the company’s established brands, boosted by new products launches and advertising initiatives.
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Net sales for the 13-weeks ended 27 August increased by 7% to $2.86bn, as worldwide unit volume rose 4%. Segment operating profits grew 7% to $532m.
Chairman and CEO Steve Sanger said: “This is a solid start to the year, driven by good unit volume and sales gains in each of our three operating segments… The sales strength reflects continued growth momentum in our established businesses, along with new product introductions under way in markets around the world.”
Net sales for General Mills’ US retail operations grew 5% to $1.91bn, with unit volume up 3%. Operating profits grew faster than sales, increasing 8% to $447m, reflecting favourable production mix and efficient plant performance, the company said.
Sales at the US meals segment were up 7%, led by Helper dinner mixes and Progresso ready-to-serve soups. Yoplait net sales grew by 8%, driven by the strong performance of the Yoplait Light range and contributions from new Whips! and Thick n’ Creamy varieties. Snacks sales were up 7% and Big G cereals sales increased by 4% with established brands, such as Honey Nut Cheerios and Fiber One, gaining ground and the introduction of new products including Fruity Cheerios. Net sales for Pillsbury USA remained steady while sales at the company’s Baking Products unit increased marginally, up 1%. The biggest gains were seen at GM’s Small Planet Foods organic business, where sales increased by 34%.
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By GlobalDataInternationally, sales increased 13% to $505m on the back of volume expansion of 7% and foreign exchange contributions of 4%. However, operating profits slid by 3% to $56m due to high levels of new product marketing support.
Bakeries & foodservice sales were up 9% to $445m, reflecting 4% unit volume growth, pricing and a favourable mix. Profits grew 7% to $29m.
General Mills reaffirmed its fiscal 2007 guidance for low single-digit net sales growth, mid single-digit growth in segment operating profits, and diluted EPS of $3.03 to $3.08, including an estimated 11 to 12 cent impact from the adoption SFAS 123R for stock-based compensation.
