General Mills reports fiscal 2015 third-quarter results
This morning General Mills released earnings results for the third quarter of fiscal 2015, reflecting strengthened operating performance in many parts of the company.
General Mills posted growth in constant currency sales, segment operating profit and adjusted diluted EPS for the quarter. The full financial results are detailed in this press release.
This infographic provides a quick snapshot for the third quarter on a constant-currency basis.
Following the release of today’s results, General Mills Chairman and CEO Ken Powell, Chief Financial Officer Don Mulligan and Convenience Stores and Foodservice segment President Bethany Quam conducted a conference call with financial analysts.
Here are the top takeaways from today’s call.
Yoplait growth accelerated, with net sales up 10 percent in the third quarter
“Consumer-first renovation, innovation, and investment have returned our U.S. yogurt business to sales and profit growth,” said Ken. “We’re now the fastest-growing of the major yogurt manufacturers, and we’re gaining share at an accelerating pace, including more than two points of share growth last month.”
(See related story: “General Mills’ Yoplait yogurt business looking healthier”)
Big G is renovating its portfolio for today’s wellness-oriented consumers
“We’re embarking on a broad investment plan designed to renovate our Big G portfolio for today’s consumers,” said Ken. “Gluten Free Cheerios is the first step in this plan. We’re taking 88 percent of the Cheerios franchise, which equates to 11 percent of the total cereal category, gluten free. This is a process change, not a reformulation.”
“With nearly 30 percent of U.S. consumers expressing an interest in gluten-free foods, we think this change is a big deal. We know some consumers have turned away from cereal to seek gluten-free options at breakfast, and we think that having the largest franchise in the category gluten free gives them a reason to return to the category.”
(See related story: “New Gluten Free Choices from Big G”)
We’re focused on growing our natural and organic food business to $1 billion by fiscal 2020
“This portfolio includes the Annie’s, Cascadian Farm, Lärabar, Food Should Taste Good, Muir Glen, Mountain High, Immaculate Baking, and Liberté brands. Sales for these brands across U.S. Retail and Convenience Stores and Foodservice segments totaled more than $160 million dollars in the third quarter, up 60 percent versus last year including the addition of Annie’s. But even without Annie’s, net sales for the rest of our natural and organic brands increased at a double digit rate,” said Ken.
Convenience Stores and Foodservice is driving significant sales and profit growth with net sales up 6 percent in the quarter
“Yoplait is the leading yogurt brand in the Foodservice arena, and net sales are growing at a double-digit pace so far this fiscal year,” said Bethany. “Go-Gurt as a choice in McDonald’s Happy Meals is contributing to this growth. So is strong performance from Yoplait Parfait Pro. This is a great example of how we’re developing innovative solutions for foodservice operators.”
“Our frozen breakfast lines also are growing at a double-digit rate. We developed a line of Pillsbury frozen breakfast items that are heated right in the bag and meet the nutritional requirements for school meals. We recently added cream-cheese filled Mini-bagels to this line, and they are performing very well. We also introduced a breakfast gordita under the Old El Paso brand,” she said.
Constant-currency net sales and profit growth accelerated in International
“We did see nice growth in our Wanchai Ferry tangyuan business in the third quarter, due in part to new, innovative flavors and forms of crystal tangyuan launched just in time for the Chinese New Year,” said Ken.
“We’re introducing a new premium line of Häagen-Dazs stick bars in France in the fourth quarter, giving us a strong offering in the largest segment of the category – handheld ice cream treats.”
General Mills reaffirmed the company’s outlook for the remainder of fiscal 2015
“In the fourth quarter, we anticipate net sales will grow at a high single-digit rate in constant currency, including the benefit of Annie’s and the 53rd week,” said Don. “The combination of sales growth, savings from HMM (holistic margin management) and our recent cost savings projects, and lower shares outstanding should result in double-digit constant-currency growth in adjusted diluted EPS for the fourth quarter.”
“For the full year, we continue to forecast low single-digit growth in net sales, a low single-digit decline in segment operating profit, and low single-digit growth in adjusted diluted EPS – all in constant currency,” he said.
Miss today’s webcast? Listen to a replay here.
Editor’s Note: This post contains non-GAAP financial information and forward looking statements regarding future results. Please see our press release dated March 18, 2015 for a reconciliation of these non-GAAP measures and for risk factors that could affect the results anticipated in these forward looking statements.
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