General Mills has reported a fall in first-quarter earnings, although recent acquisitions helped boost sales.
The owner of brands including Yoplait yoghurt and Cheerios cereal saw net income slide 16.7% to US$459.3m for the quarter to 25 August. A year ago, General Mills benefited from a tax benefit and a higher mark-to-market valuation of some of its commodity positions.
Operating profit was down 5.8% at $734.8m. Segment operating profit, which excludes corporate expenses, was up 6%.
Net sales climbed 8% to $4.37bn. General Mills said new businesses acquired in the last year, including the Canadian Yoplait business and Brazilian firm Yoki, boosted the top line by five percentage points.
General Mills is ploughing investment into NPD and chairman and CEO Ken Powell said the company had started to see the benefit.
“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. These first-quarter results have us on track to achieve the key financial targets we’ve set for fiscal 2014.”
The company reaffirmed its full-year forecasts of low single-digit growth in net sales, mid single-digit growth in segment operating profit, and adjusted diluted earnings per share of $2.87 to $2.90.