General Mills: Bakeries and Foodservice sales up 17% in Q1/2009

Minneapolis / MN. (gm) General Mills Inc. reported results for the first quarter of fiscal 2009. Net sales for the 13-weeks ended August 24, 2008, grew 14 percent to 3,5 billion USD. Volume increases (measured in pounds) contributed four points of sales growth. Segment operating profits grew nine percent to 632 million USD despite higher input costs and a 17 percent increase in consumer marketing investment. First-quarter net earnings totaled 279 million USD after a net reduction related to mark-to-market valuation of certain commodity positions (this non-cash item is discussed below in the section titled Corporate Items). Diluted earnings per share (EPS) totaled 0,79 USD, including a 17-cent net reduction related to mark-to-market valuation. Excluding the mark-to-market impact, earnings per share would have totaled 0,96 USD, up 19 percent from 0,81 USD per share earned in last year´s first quarter.

Chairman and Chief Executive Officer Ken Powell: «We´re off to a great start in 2009, powered by strong consumer demand for our products in markets around the world. Our U.S. Retail sales grew 13 percent, International sales rose 15 percent, and Bakeries and Foodservice sales were up 17 percent for the quarter. Operating profits showed strong growth despite the input cost pressure and our increased consumer marketing investment. This broad momentum has us well on track to deliver solid sales and earnings growth for the full year».

U.S. Retail Segment Results

First quarter net sales for General Mills´ U.S. Retail segment grew 13 percent to 2,3 billion USD, with gains recorded by every division. Pound volume contributed six points of the growth. Operating profits grew eleven percent to reach 526 million USD including a 16 percent increase in consumer marketing expense.

Net sales for the Baking Products division grew 25 percent, reflecting strong gains by Betty Crocker dessert mixes and Gold Medal flour. Yoplait division net sales grew 19 percent, led by contributions from Yoplait Light, Yo-Plus and Fiber One yogurts. Snacks division net sales grew 14 percent with continued strong growth by Nature Valley and Fiber One grain snack bars. Net sales for Big G cereals grew ten percent including gains by Multi-Grain Cheerios, Honey Nut Cheerios, original Cheerios and the Fiber One cereal line. Meals division net sales also grew ten percent, led by Progresso ready-to-serve soups and Green Giant vegetables. Pillsbury USA division net sales grew six percent including gains from Grands biscuits and Totino´s frozen pizza and snacks. Net sales for the company´s Small Planet Foods organic business showed a strong double-digit increase reflecting the June 2008 acquisition of the Larabar line of fruit and nut energy bars, along with contributions from new varieties of Cascadian Farm cereals and snack bars, and Muir Glen soups and pasta sauces.

International Segment Results

First-quarter net sales for General Mills´ international business segment grew 15 percent to 690 million USD, including six points of growth from foreign exchange. Pound volume matched prior-year levels. Operating profits grew eleven percent to 79 million USD.

Sales growth was broad-based across the regions where the company competes. Net sales in Europe grew 14 percent. Sales in Canada rose nine percent. And sales in the Asia / Pacific region and Latin America grew 26 percent and 14 percent, respectively.

Bakeries + Foodservice Segment

First-quarter net sales for Bakeries + Foodservice grew 17 percent to 517 million USD, reflecting price increases taken to combat higher input costs. Pound volume declined five percent for the period. Net sales to bakery channel customers grew 29 percent, sales to convenience stores and vending accounts grew ten percent, and sales to restaurants and foodservice distributors grew eight percent. Segment operating profits totaled 27 million USD. This was below results for last year´s first quarter, when profits grew 17 percent to reach 34 million USD.

Info: The press release about General Mills´ Q1/2009 is available here.