International business lifts General Mills profits
MINNEAPOLIS — Despite more promotions and lower margins, General Mills, Inc. was still able to achieve a 9% increase in earnings during the second quarter ended Nov. 28.
For the quarter ended Nov. 28, the company had earnings of $613.9 million, equal to 96c per share on the common stock, which compared with earnings of $565.5 million, or 86c per share, during the same quarter of the previous year. Sales for the quarter were $4,066.6 million, up 1% from $4,034.7 million during the same quarter of the previous year.
The U.S. Retail segment had an operating profit of $687.4 million in the quarter, down 4% from $717.2 million during the same quarter of the previous year. Sales for the segment were $2,850.1 million, down slightly from $2,859.5 million.
The International segment posted operating profit of $88.7 million, up 26% from $71 million during the same quarter of the previous year. Sales for the segment were $748.8 million, up 4% from $719.2 million.
“We expected the first half of this fiscal year to be particularly challenging, and it was,” said Ken Powell, chairman and chief executive officer. “We were lapping very strong growth by our company in the same period a year ago, including 16% segment operating profit growth and a 22% increase in our adjusted diluted earnings per share. In addition, the operating environment in the first half of 2011 included high levels of price promotion by food manufacturers and retailers. So we were pleased to see all three of our operating segments post net sales and volume increases through the first half.
“In the second half of our fiscal year, we expect to deliver good sales and profit growth, fueled by ongoing product news and innovation, productivity savings from our holistic margin management initiatives, and some contributions from pricing and mix. We see ourselves solidly on track to achieve our full-year sales and earnings growth targets.”
For the six months ended Nov. 28, the company had earnings of $1,086 million, or $1.68 per share, up 10% from $986.1 million, or $1.50 per share, in the same period a year ago. Sales for the segment were $7,599.7 million, up 1% from $7,517.1 million.
“Sales for our leading food brands continue to grow in markets around the world, because these products meet consumers’ demand for high-quality, affordable foods that are great-tasting, nutritious, and easy to prepare,” Mr. Powell said. “Our second-half plans include strong levels of product news and consumer marketing support, and we expect to deliver good growth across our businesses in this period.”