General Mills reports second-quarter earnings
Second-quarter Performance Highlights
•Our leadership said that this fiscal year is unfolding as expected – and we reaffirmed our full-year 2012 guidance today.
•This quarter includes a full three months of results for the new Yoplait international business acquired July 1, 2011. that acquisition makes significant contributions to our international sales and operating profit. You can hear Chris O’Leary, executive vice president and head of our International Division, talk about our global growth – and Yoplait – in this audio clip:
•Our fiscal 2012 annual targets point to strong growth in sales and EPS in the second half of this year. General Mills’ guidance calls for double-digit net sales growth and high single-digit to low double-digit growth in EPS during the second half, driven by strong innovation and marketing plans, and strengthening categories.
•We continue to deliver solid performance in a tough operating environment. Despite significant input cost pressure and a high single-digit increase in media investment, our second-quarter earnings were generally in line with year-ago levels.
General Mills’ second-quarter results show good net sales growth worldwide, with sales growth in all three of our operating segments: U.S. Retail, International, and Bakeries & Foodservice.
Net sales grew 3 percent. Pound volume reduced net sales growth by 7 points, primarily reflecting lower shipments of items such as flour and dessert mixes, canned and frozen vegetables, and yogurt. However, volume measured in equivalent cases was down just 2 percent through the first half.
Our International segment had a strong quarter, both before and after the addition of Yoplait. Sales as reported were up 55 percent. Sales increased at a double-digit rate even excluding Yoplait. Pound volume contributed 80 points of net sales growth, including 76 points of growth from the Yoplait acquisition.
Bakeries & Foodservice
Net sales in our Bakeries & Foodservice segment increased 12 percent, with pound volume contributing 3 points of net sales growth.
New product innovation
Our first half new product launches are making good contributions to sales, including Fiber One Brownies, Pillsbury Egg Scrambles and Grands! Biscuit Sandwiches, and Häagen-Dazs Sweet Sensations in Europe.
We are also launching a number of new products in the second half, including:
• Dulce de Leche Cheerios
• New peanut butter Multi Grain Cheerios
• Nature Valley protein bars with 10 grams of protein and 5 grams of fiber per serving
• Greek yogurt and granola parfaits
• New flavors of Greek yogurt in multipacks
• A new line of lactose-free Yoplait yogurt
General Mills actually launched more than 100 new products in the first half of fiscal 2012 – and we have more than 50 new products coming in the second half.
Our leadership today said the quality of our innovation is strong, and these new products will continue to drive incremental sales growth for us in the second half and beyond.