General Mills Reports Fiscal 2016 First-Quarter Results

Sept. 22, 2015

MINNEAPOLIS, Sept. 22, 2015 /PRNewswire/ -- General Mills today reported results for the first quarter of fiscal 2016. 

Net sales for the 13 weeks ended August 30, 2015, declined 1 percent to $4.21 billion, as foreign currency exchange reduced net sales growth by 5 percentage points.  On a constant-currency basis, net sales grew 4 percent, including 2 points of growth contributed by the Annie's business acquired in October 2014.  Pound volume was 2 percent above year-ago levels. 

Net price realization and mix contributed 2 points of net sales growth. Adjusted gross margin, which excludes mark-to-market effects and certain other items affecting comparability, increased 290 basis points due to improved net price realization and savings from our cost-reduction initiatives. 

Selling, general and administrative expenses (SG&A) declined 6 percent, driven by savings from Project Catalyst and a 5 percent decrease in advertising and media expense. Total segment operating profit rose 20 percent to $826 million. On a constant-currency basis, total segment operating profit increased 23 percent. The company posted restructuring and project-related charges totaling $95 million pretax in the first quarter, including $35 million recorded in cost of sales. Net earnings attributable to General Mills totaled $427 million and diluted earnings per share totaled 69 cents. Adjusted diluted EPS, which excludes certain items affecting comparability, totaled 79 cents compared to 61 cents a year ago. On a constant-currency basis, first-quarter adjusted diluted EPS increased 36 percent.

U.S. Retail Segment Results

First-quarter net sales for General Mills' U.S. Retail segment totaled $2.53 billion, up 4 percent from the prior year.  Pound volume contributed 1 point of net sales growth, and net price realization and mix added 3 points of growth. Annie's contributed 3 points of net sales growth. The Cereal, Meals, Yogurt, and Snacks operating units posted net sales gains for the quarter, while sales for the Baking Products unit were comparable to last year.  U.S. Retail segment operating profit totaled $630 million, up 38 percent from the year-ago period that saw a 25 percent profit decline.  The increase in segment operating profit in the quarter was driven by a comparison to a year-ago period with high promotional expense, a decrease in SG&A expenses, and lower supply chain costs.

Convenience Stores and Foodservice Segment Results

First-quarter net sales for the Convenience Stores and Foodservice segment increased 1 percent to $478 million, reflecting increased pound volume. Snacks, frozen meals, mixes, and cereal led sales performance in the quarter.  Segment operating profit declined 9 percent to $80 million, driven by higher input costs and a comparison to 18 percent profit growth in the year-ago period. Full report.