MINNEAPOLIS, March 18, 2015 /PRNewswire/ -- General Mills (NYSE: GIS) today reported results for the third quarter of fiscal 2015.
Third Quarter Results Summary
- Net sales for the 13 weeks ended Feb. 22, 2015, totaled $4.35 billion, down 1 percent from last year's third-quarter results due to foreign currency effects. On a constant-currency basis, quarterly net sales grew 3 percent.
- Segment operating profit totaled $698 million, up 1 percent. In constant currency, segment operating profit rose 3 percent.
- Diluted earnings per share (EPS) totaled 56 cents compared to 64 cents a year ago.
- Adjusted diluted EPS, which excludes certain items affecting comparability of results, totaled 70 cents in the third quarter of 2015, up 13 percent from 62 cents in last year's third quarter. On a constant-currency basis, adjusted diluted EPS grew 15 percent.
General Mills Chairman and Chief Executive Officer Ken Powell said, "Our third-quarter results reflect strengthened operating performance. Our U.S. Retail segment posted net sales and profit growth including contributions from the Annie's business acquired in October 2014. Constant-currency net sales and profit growth accelerated for our International segment. And the Convenience Stores and Foodservice segment led our operating results, with sales up 6 percent and profit up 11 percent."
Third-quarter net sales of $4.35 billion were 1 percent below year-ago results, as foreign currency exchange reduced net sales growth by 4 percentage points. On a constant-currency basis, net sales grew 3 percent, including 1 point of growth contributed by the Annie's acquisition. Pound volume was 1 percent below year-ago levels. Net price realization and mix added 4 points of net sales growth. Gross margin was below year-ago levels, primarily reflecting negative product mix and restructuring charges. Selling, general and administrative expenses declined, driven by an 8 percent decrease in advertising and media expense along with cost savings from restructuring actions. Segment operating profit rose 1 percent to $698 million. General Mills posted restructuring and project-related charges totaling$74 million pretax in the third quarter, including $25 million recorded in cost of sales. (Please see the Corporate Items section below for more information on restructuring actions.) Third-quarter net earnings attributable to General Mills totaled $343 million and diluted EPS totaled 56 cents. Adjusted diluted EPS, which excludes restructuring charges and certain other items affecting comparability, totaled 70 cents, up 13 percent from 62 cents in last year's third quarter. Foreign currency exchange reduced 2015 third-quarter adjusted diluted EPS by approximately 1 cent.
Nine-month Results Summary
- Net sales through the first nine months of fiscal 2015 totaled $13.3 billion, down 2 percent from $13.6 billion a year ago. On a constant-currency basis, nine-month net sales essentially matched year-ago results.
- Nine-month segment operating profit totaled $2.24 billion, down 8 percent as reported and down 6 percent in constant currency.
- Diluted EPS totaled $1.67 compared to $2.18 a year ago.
- Adjusted diluted EPS totaled $2.11 this year to date, compared to $2.15 a year ago. Foreign currency exchange reduced fiscal 2015 nine-month adjusted diluted EPS by approximately 4 cents.
Through the first nine months of fiscal 2015, U.S. Retail segment dollar market shares increased in categories representing 68 percent of the company's sales volume in Nielsen-measured outlets. This included market share gains in RTE cereal, yogurt and snacks. U.S. Retail products making particularly strong contributions to nine-month net sales results included Yoplait Original Style and Greek yogurt varieties; Cinnamon Toast Crunch, Nature Valley granola and Cheerios Protein cereals; Fiber One snack bar varieties and Cascadian Farm organic grain snacks. In the Convenience Stores and Foodservice segment, Pillsbury frozen breakfast items, Yoplait yogurt varieties and Big G bowlpack cereals were strong net sales contributors. International products posting strong nine-month sales contributions included Old El Paso dinner kits in Canada, Europe and Australia; Yoki and La Saltena meal products in Latin America; and Haagen-Dazs superpremium ice cream in the Asia / Pacific region.
U.S. Retail Segment Results
Third-quarter net sales for General Mills' U.S. Retail segment totaled $2.65 billion, up 1 percent from prior-year results. Net price realization and mix contributed 3 points of net sales growth, while lower pound volume reduced sales growth by 2 points. The Annie's business acquired in October 2014 contributed 2 points of net sales growth and 1 point of pound volume growth. The Yogurt and Snacks operating units drove the quarterly net sales increase. Cereal unit net sales were essentially unchanged from the prior-year level, while the Meals and Baking Products units posted net sales declines for the quarter. U.S. Retail segment operating profit grew 1 percent to $521 million.
Through nine months, U.S. Retail net sales totaled $7.96 billion, down 3 percent from year-ago results, with lower volume contributing 2 points of the net sales decline, and negative price realization and mix contributing 1 point of decline. Segment operating profit of $1.59 billion was 12 percent below prior-year results. View full report here.
