MINNEAPOLIS — Earnings at General Mills, Inc. inched up narrowly in the fiscal year ended May 31, boosted by a strong fourth quarter in which profit nearly doubled. Net income for the year totaled $1,304.4 million, equal to $3.93 per share on the common stock, up from $1,294.7 million, or $3.86 per share, in fiscal 2008. The company said it incurred pre-tax restructuring charges of $42 million and a net pre-tax gain of $85 million from divestitures in fiscal 2009. Net sales for the full year were $14,691.3 million, up 8% from $13,652.1 million.
For the fourth quarter ended May 31, General Mills had net earnings of $358.8 million, or $1.09 per share, which compared with earnings of $185.2 million, or 55c per share, during the same quarter of the previous year. Fourth-quarter earnings benefited from a net gain from mark-to-market valuation of certain commodity positions and a lower fourth-quarter tax rate.
Net sales for the quarter were $3,645.7 million, up 5% from $3,471.1 million during the same quarter of the previous year.
"In today’s very challenging economic environment, our leading food brands offer the quality, convenience and value that consumers are looking for and, as a result, our businesses are showing strong growth," said Ken Powell, chairman and chief executive officer. "In 2009, we held our margins in the face of sharply higher input costs, and we significantly increased the level of consumer marketing support for our brands. These actions have positioned General Mills to achieve another year of good growth in fiscal 2010."
For the full year, operating profit in the U.S. Retail segment was $2,208.5 million, up 12% from $1,971.2 million during fiscal 2008. Sales for the segment were $10,052.1 million, up 11% from $9,072 million during the same period a year ago. General Mills said volume gains contributed four percentage points of the net sales growth during the year.
"Net sales for Big G cereals rose 11% with strong performance from core brands, including Fiber One and the market-leading Cheerios franchise," the company said. "Baking Products net sales grew 18%, including gains for Bisquick variety baking mix, Gold Medal flour and Betty Crocker dessert mixes. Yoplait posted a 14% net sales increase fueled by double-digit growth for Yoplait Light reduced-calorie yogurt.
"Pillsbury USA division net sales rose 12%, including strong growth from Totino’s pizza and pizza rolls, Pillsbury refrigerated dough products, and new Pillsbury Savorings frozen appetizers. Meals division net sales increased 8%, led by dinner mixes and Green Giant frozen vegetables."
General Mills said sales within its Snacks division grew 4%, driven by strong contributions from Nature Valley and Fiber One snack bars. For the company’s Small Planet Foods organic product lines, net sales grew 30%, including the Lärabar business acquired during 2009.
The International segment had an operating profit of $261.4 million for the year, down 3% from $268.9 million during fiscal 2008. Sales for the segment were $2,591.4 million, up 1% from $2,558.8 million. On a constant-currency basis, General Mills said full-year sales rose 16% in the Asia/Pacific region, 22% in the Latin America region, 7% in Canada, and 4% in Europe.
The Bakeries and Foodservice segment had an operating profit of $171 million, up 3% from $165.4 million during fiscal 2008. Sales for the segment were $2,047.8 million, up 1% from $2,021.3 million. Pound volume fell 6%, reflecting weak food service industry trends.
General Mills noted that fiscal 2008 results included unusually strong grain merchandising earnings that resulted from significant commodity price increases. Excluding grain merchandising earnings from both 2009 and 2008, the Bakeries and Foodservice unit had operating profit growth of 15% in 2009.
"Our product categories are on-trend with consumer needs, and we’ve got a good line-up of product news and innovation planned for the new year, so we expect our business to generate good growth again in fiscal 2010," Mr. Powell said. "Our plans assume that world economic conditions remain challenging, and that foreign currency translation and transaction effects will reduce our reported sales and earnings growth rates. However, we expect the rate of input cost inflation to moderate, and we believe savings from our holistic margin management initiatives will exceed cost increases."
The company said it expects earnings per share to range between $4.20 and $4.25, which is above the $4.18 per share estimated by analysts.