General Mills Boasts 8 Percent Sales Growth In First Fiscal Quarter

By Sam Lewis

Food manufacturer lays plans to continue improving overall performance

General Mills, the owner of famed brands like Betty Crocker, Green Giant, and Cheerios posted its results for the fiscal first quarter on Sept 18. The food manufacturer had sales totaling $4.37 billion for the quarter. That marks a gain of 8 percent versus the same quarter of last year. Profits were down to $459 million or 70 cents per share, against $548.9 million, or 82 cents per share in the same time frame last year.

The company sites gains from several of its establish brands, strong first-showings of new products, and new business in its portfolio for increased growth. The U.S. retail portion of General Mills’ business is the largest by revenue. Net sales in this segment rose 3.6 percent up to $2.58 billion with operating profit seeing a bump of 6.4%. International business for the company saw an enormous jump, gaining 22 percent in sales. However, operating profit slid slightly, down 0.2 percent. Thomas Reuters’ analysts forecasted General Mills’ to have earnings of 70 cents per share on $4.3 billion in revenue. Looking at the forecasted numbers versus actual figures, the company can’t be disappointed.

Two of General Mills’ key products — cereal and yogurt — underperformed in the U.S. last year. The company is aiming to improve marketing for cereal throughout 2014 by giving new twists to old favorites and adding a new line of Pillsbury gluten-free refrigerated dough products. The yogurt business will also undergo a makeover, as General Mills takes aim to grab its share of the popular Greek yogurt market. It will do so by implementing a new version of its Yoplait Greek Yogurt in the coming months. “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,” says Chairman and CEO Ken Powell.  

There has been concern in the cereal market in the last few years, as losses in sales have been prevalent industry wide. General Mills has shown concern for the cereal market, but expects a significant rebound as plans to improve the market have been made are and now being executed by the food manufacturer. The outlook is good for 2014 and beyond, as General Mills seems to have a firm grasp on what is expected and how to surpass expectations in all markets.