General Mills reports 8 percent net sales growth in third-quarter of fiscal 2013
This morning General Mills reported strong results for the third quarter of its fiscal 2013 and raised full-year earnings guidance.
In the third quarter, net sales grew 8 percent, segment operating profit grew 11 percent and diluted earnings per share (EPS) were 60 cents as reported.
Adjusted diluted EPS totaled 64 cents, up 16 percent from last year’s third quarter (excluding certain items affecting comparability). The Thomson Reuters consensus of Wall Street analyst estimates was 57 cents.
The full financials are outlined in the press release issued this morning.
On this morning’s earnings conference call, Ken Powell, chairman and CEO; Don Mulligan, chief financial officer; and Dave Dudick, president, Bakeries & Foodservice, provided performance updates on our businesses around the world.
“We are continuing to see slow, but steady, improvement in the operating environment,” Ken Powell told investors. “Trends in our established businesses are improving, and integration of our new businesses is going smoothly. We’re preparing to launch a promising slate of new products as our new fiscal year begins this summer, and our plans for fiscal 2014 call for high single-digit EPS growth, consistent with our long-term model.”
Below I’ve summarized some of the highlights from the investor webcast. For the full webcast and presentation slides, visit the Investor section of GeneralMills.com.
Fiscal 2013 financial outlook
Don Mulligan told investors that the company is on track to deliver its fiscal 2013 financial targets, including mid-single digit growth in worldwide net sales and operating profit, and earnings per share growth a little ahead of our original estimate. The company increased its guidance for fiscal 2013 adjusted diluted EPS to a range of $2.66 to $2.68 (previously $2.65 to $2.67), excluding mark-to-market effects, a net tax benefit recorded in the first quarter and restructuring and integration costs.
Returning cash to shareholders
Don also underlined the company’s long-standing commitment to returning cash to shareholders through share repurchases and dividends. So far this fiscal year, we’ve repurchased about 19 million shares of common stock for a total of $745 million dollars and we’ve paid $652 million in dividends – up 9 percent over last year.
Just last week, the company announced a 15 percent dividend increase to a new quarterly rate of $0.38 a share, effective with our August 2013 payment. This is the company’s 14th dividend increase since 2004.
Bakeries and Foodservice profit continues to climb
Dave Dudick provided investors with a recap of our Bakeries and Foodservice division’s strong profit growth in recent years and his optimism for its future. I’ve outlined Dave’s presentation in a separate blog on A Taste of General Mills, available here.
New product performance
Ken said that fiscal 2013 has been a particularly good year for new product innovation worldwide and that we have strong plans in place for innovation next fiscal year.
New product highlights include:
• Yoplait Greek 100 yogurt, on track to achieve $100 million in year-one retail sales in the U.S.
• Fiber One Protein Bars, which launched in January and are already turning in the top third of the grain snacks category in the U.S.
• Honey Nut Cheerios Medley Crunch, Peanut Butter Toast Crunch and Fiber One 80 Calories Chocolate cereals, which launched this January in the U.S. In total, these new cereal launches represent more than a full percentage point of category sales.
• New varieties of Häagen-Dazs mooncakes in China.
Looking ahead to fiscal 2014
In closing his remarks, Ken reiterated company plans for fiscal 2014 that he recently shared at the Consumer Analyst Group of New York conference. “We will return to our long-term earnings model in 2014, including high-single digit growth in EPS and increased cash returns to shareholders.”
Editor’s Note: This post contains non-GAAP financial information and forward looking statements regarding future results. Please see our press release dated March 20, 2013, for a reconciliation of these non-GAAP measures and for risk factors that could affect the results anticipated in these forward looking statements.