General Mills Reports 1Q Net Income of $459 Million, Down From $548 Million in 1Q 2013
Date Posted: September 19, 2013
Minneapolis, MN—General Mills (NYSE: GIS) reported Sept. 18 results for the first quarter of fiscal 2014.
The period includes three months of incremental contribution from new businesses (Yoplait Canada, Yoki Alimentos and Immaculate Baking Company) added in the previous year.
Net sales for the 13 weeks ended Aug. 25, 2013, grew 8 percent to $4.37 billion.
Pound volume grew 8 percent, primarily reflecting acquisitions.
Price realization and mix contributed 1 point of net sales growth, and foreign exchange subtracted 1 point of growth.
Gross margin was below year ago levels, reflecting changes in mark-to-market valuation of certain commodity positions, input cost inflation and the change in business mix.
Advertising and media expense was 7 percent higher than year-ago levels.
Total segment operating profit grew 6 percent to $812 million (please see Note 8 below for reconciliation of this non-GAAP measure).
First-quarter net earnings attributable to General Mills totaled $459 million and diluted earnings per share totaled 70 cents.
These results were below year-ago levels that included a net benefit of 16 cents per share from several discrete items.
Adjusted diluted EPS, which excludes certain items affecting comparability, totaled 70 cents in the first quarter of fiscal 2014, up 6 percent compared to 66 cents a year ago.
Chairman and Chief Executive Officer Ken Powell said this performance represented a solid start to the new fiscal year.
"In particular, 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."
New products contributing to net sales growth in the quarter included Yoplait Greek yogurt, Nature Valley Soft-baked Oatmeal Squares, Honey Nut Cheerios Medley Crunch cereal, Pillsbury gluten-free refrigerated dough products, new Helper dinner mix varieties and, in Brazil, new Yoki Kit Facil dinner mixes.
Established brands including Lucky Charms and Cinnamon Toast Crunch cereals, Progresso Light ready-to-serve soups, Yoplait Greek 100 calorie yogurt, Totino's frozen pizza and snacks, Larabar fruit and nut energy bars and, in China, Wanchai Ferry frozen dumplings and dim sum varieties, also contributed to net sales growth.
Powell said, "We continue to be excited about our 2014 business plans, which call for sales and earnings growth consistent with our long-term model, along with strong cash returns to shareholders through dividend growth and share repurchase activity."
The company reaffirmed its full-year fiscal 2014 guidance of low single-digit growth in net sales, mid single-digit growth in segment operating profit, and adjusted diluted EPS of $2.87 to $2.90.
General Mills will hold a briefing for investors today, Sept. 18, 2013, beginning at 8:30 a.m. Eastern time.
You may access the web cast from General Mills' internet home page: generalmills.com.
Adjusted diluted EPS, total segment operating profit, international sales excluding foreign currency translation effects, and adjusted effective tax rate are each non-GAAP measures.
Reconciliations of these measures to their relevant GAAP measures appear in Note 8 to the attached Consolidated Financial Statements.
For more information, call 800-248-7310.