Boston, MA 09/18/2014 (wallstreetpr) – Branded consumer goods manufacturer, General Mills, Inc. (NYSE:GIS) Chairman and Chief Executive Officer, Ken Powell, said that its Yoplait yogurt business in the U.S. retail segment returned to growth path with gains recorded in sales, volume, and market share in the first quarter.
CEO Comments
The General Mills, Inc. (NYSE:GIS)’s CEO said that it could witness market share gains in several other product lines such as grain bars, fruit snacks, and Big G cereals, its statement indicated. Its Convenience Stores and Foodservice division achieved sales uptick besides an 18% increase in operating profit. He also said that its International business division generated 17% uptick in constant-currency profit due to sales gains, particularly in Europe and Latin America.
However, a sore point came from the U.S. where its sales and profit declined. Powell attributed it to the weakness in the industry trends during the first quarter. Besides, increased merchandising costs have impacted its retail businesses thus affecting its net sales and gross margin unfavorably.
While announcing $100 million cost-savings program by streamlining its North American supply chain, the company has reiterated its fiscal year 2015 constant-currency growth targets. It expects to deliver adjusted earnings uptick of high single-digit rate for the same period. The CEO has acknowledged that the conditions in the U.S. market were more challenging than the company has originally predicted.
1Q Results
General Mills, Inc. (NYSE:GIS) reported a 24.8% drop in net earnings to $345.2 million in the first quarter from $459.3 million while earnings dropped 21.4% to 55 cents a share from 70 cents a share in the year-ago quarter. On an adjusted basis, earnings fell 13% to 61 cents a share in the latest quarter.
Net sales fell 2.4% to $4.27 billion from $4.37 billion in the same quarter last year. On a constant currency basis, its top line witnessed a downtick of 1%. Its gross margin dipped 3.2 percentage points to 33.7% from 36.9% while operating margin dropped 3.7 percentage points to 13.1% from 16.8% in the previous year quarter.
