MINNEAPOLIS — General Mills, Inc. is seeing “two different stories” when it comes to its international and North American bars businesses, Jeffrey L. Harmening, chairman and chief executive officer, told analysts during a Dec. 19 conference call.
On the one hand, international bars growth is transpiring at strong double-digit sales rates, he said.
“Europe and Australia are driving retail sales growth with strong in-store execution and distribution gains on Nature Valley Protein and Fiber One brownie,” Mr. Harmening explained. “Contributions from innovation remained strong behind Nut Butter biscuit line extensions and Fiber One popcorn. In our Asia and Latin America segment, the investments we’ve made in India in distribution expansion, innovation and consumer engagement are paying off for us. We’re building on the success of Pillsbury branded cookies and pastry cakes by expanding into new flavors and formats.”
Meanwhile, in the United States the company’s bar business results have underperformed expectations, he said.
“Nature Valley performance weakened in the second quarter driven by lower merchandising support and customer inventory reductions,” Mr. Harmening said. “We have plans in place to increase merchandising frequency in the second half. Our Fiber One bar performance in the U.S. has remained challenged. We expect continuous declines in the near term as we cycle through distribution losses. Looking further ahead, we see an opportunity to renovate the Fiber One product line and make it more relevant, and we’ll share more as those plans get closer to completion.”
Mr. Harmening cited a few positives in the bars business in North America, though. He pointed to early signs of success for Protein One.
“You will see a new Protein One social media campaign launched in January, featuring celebrity Mindy Kaling,” he said.
Additionally, retail sales for Epic are growing at a double-digit rate, he said, driven by the core meat bar stock-keeping units and snacks as well as a new Epic Performance Bar that launched during the summer.
General Mills net income for the quarter ended Nov. 25 fell 20% to $343.4 million, equal to 57c per share on the common stock, which compared with $430.5 million, or 75c per share, in the same period a year ago.
Sales for the quarter, which included the Blue Buffalo pet food business, rose 5% to $4,411.2 million. Organic sales fell 1% due to a decline in the North American Retail business unit.
For the first six months of fiscal 2019, General Mills net income totaled $735.7 million, or $1.23 per share, down from $835.2 million, or $1.46 per share, in the same period a year ago.
Sales for the period rose 7% to $8,505.2 million.