General Mills recorded a 5.1% increase in its second-quarter net sales, as contributions from its newly-acquired Blue Buffalo pet food brand offset struggling snack sales.
Total revenues for the quarter ended 25 November were $4.41 billion, with the company’s pet segment adding $335.2 million.
Operating profit for the quarter was down 22.8% to $547 million “due to higher restructuring, impairment, and other exit costs”.
In its North America retail segment – which makes up 60% of its business – General Mills saw its second-quarter net sales decrease by 3.4%, primarily reflecting lower merchandising activity in the US cereal operating unit and lower volume in US snacks.
Net sales for the convenience stores and foodservice segment were in line with last year at $514 million. Segment operating profit increased 3% to $110 million, primarily driven by positive net price realisation and mix and benefits from cost savings initiatives.
In its Europe and Australia unit, net sales declined 3% to $454 million, as positive results for Häagen-Dazs ice cream and Old El Paso Mexican food was offset by a decline in yogurt.
General Mills CEO Jeff Harmening said: “I’m pleased that our results through six months keep us on track to deliver our full-year targets. Our cost and capital discipline has driven profit growth ahead of our expectations in the first half.
“Our job to do in the second half is to accelerate our sales growth while maintaining that same discipline. We’re taking actions to strengthen our second-half top-line trends in North America retail, led by US cereal and snacks.
“On Blue Buffalo, we’re driving strong in-market results, including year-to-date retail sales up 9%, and we’ll fuel additional Blue growth in the second half by doubling distribution in the food, drug, and mass channels.
“With strong first-half profit performance, good cost visibility, and confidence in our second-half growth plans, we are reaffirming our guidance for Blue Buffalo and for General Mills in total.”
General Mills organic net sales are expected to be in a range between flat and up 1%. Including the impact of the Blue Buffalo acquisition, net sales are expected to increase 9% to 10% in constant currency.
© FoodBev Media Ltd 2024
