General Mills reported results for the second quarter of fiscal 2013. contributions from new businesses primarily reflect the first three months of consolidated operating results for the Yoki Alimentos business in Brazil and Yoplait Canada.
Net sales for the 13 weeks ended Nov. 25, 2012, grew 6 percent to $4.88 billion. Pound volume contributed 7 points of net sales growth, primarily reflecting the addition of Yoki and Yoplait Canada. Price realization and mix reduced the net sales growth rate by 1 point. Foreign currency exchange had no impact on the rate of net sales growth in the quarter. Gross margin was above year ago levels. Total marketing spending in the quarter was weighted toward in-store promotional support for established brands and new product introductions; advertising and media expense was below strong year-ago levels. Total segment operating profit increased 10 percent to $959 million. Second-quarter net earnings attributable to General Mills grew to $542 million and diluted earnings per share increased to 82 cents. Adjusted diluted earnings per share (EPS), which excludes certain items affecting comparability, grew 13 percent to 86 cents.
According to Ken Powell, chairman and chief executive officer, the second-quarter results reflected good performance by each of the company’s operating segments. “Our U.S. Retail segment posted gains in pound volume, net sales and operating profit. The Bakeries and Foodservice segment generated strong double-digit operating profit growth. And our International segment recorded good sales and profit growth for established businesses in addition to the incremental contributions from Yoki and Yoplait Canada,” said Powell, in a prepared statement.
Products making the strongest contributions to net sales growth in the second quarter included new items such as Yoplait Greek and Greek 100 calorie yogurts, Nature Valley protein bars, Peanut Butter Multigrain Cheerios, Progresso Recipe Starters sauces and, in the United Kingdom, Nature Valley Sweet and Nutty bars. Established brands such as Lucky Charms and Chex cereals, Fiber One 90 calorie snack bars, Totino’s frozen snacks, Pillsbury refrigerated crescent rolls and, in China, Haagen Dazs mooncakes and other ice cream products also contributed strong sales gains.
“As we move into the second half, the global operating environment remains challenging,” Powell said. “We are working to build on our good performance year-to-date. We’re launching a promising slate of new products in our core U.S. market. And we have strong levels of advertising and in-store merchandising planned to support new and existing products in markets worldwide.”
General Mills increased its guidance for fiscal 2013 adjusted diluted EPS to a range of $2.65 to $2.67, excluding mark-to-market effects, a net tax benefit recorded in the first quarter, and restructuring and integration costs.
