MINNEAPOLIS, Sept. 21, 2016 /PRNewswire/ -- General Mills (NYSE: GIS) today reported results for the first quarter ended August 28, 2016.
"Our first-quarter profit margin expansion and EPS results reflect continued good progress on our productivity and cost-savings initiatives," said General Mills Chairman and Chief Executive Officer Ken Powell. "However, our net sales performance did not meet our expectations due to the challenging macro environment, a difficult year-over-year comparison, and a slower start to the year on certain businesses. We are taking actions to improve our net sales performance going forward, leveraging our Consumer First focus. At the same time, we have a number of encouraging examples across our global portfolio where our efforts to adapt to evolving consumer interests are driving positive results."
First Quarter Results Summary
- Reported net sales declined 7 percent to $3.9 billion due to lower organic net sales, the divestiture of the North American Green Giant business, and the impact of foreign exchange. Organic net sales declined 4 percent, with increases in U.S. natural and organic brands and emerging markets more than offset by declines in Foundation businesses and U.S. Yogurt.
- Gross margin decreased from 36.9 percent to 36.3 percent of net sales. Adjusted gross margin, which excludes mark-to-market effects and certain other items affecting comparability, decreased 30 basis points from last year's result that was up 290 basis points.
- Operating profit totaled $646 million, down 6 percent compared to the prior year. Operating profit margin increased 30 basis points to 16.5 percent of net sales. Adjusted operating profit margin increased 80 basis points to 19.2 percent of net sales.
- Total segment operating profit of $787 million was down 5 percent. Total segment operating profit was down 4 percent in constant currency, reflecting lower net sales.
- Net earnings attributable to General Mills totaled $409 million and diluted earnings per share (EPS) were $0.67, down 3 percent from $0.69 a year ago.
- Adjusted diluted EPS, which excludes certain items affecting comparability of results, totaled $0.78in the first quarter, down 1 percent from the prior year. Constant-currency adjusted diluted EPS were also down 1 percent.
