General Mills Profit Jumps 24% With U.S. Retail Sales Up

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The FINANCIAL — General Mills Inc. on September 22 reported a better-than-expected 24% jump in profit for its August quarter as its U.S. retail sales and volumes grew, according to Nasdaq.

Still, revenue edged in slightly below Wall Street expectations, and the maker of Cheerios cereal and Hamburger Helper backed its guidance targets for the year.

Shares gained 1.4% in premarket trading.

General Mills has been focusing its efforts on items that better appeal to consumers’ hunger for fresher, less- processed food. Earlier this month, the company agreed to sell its Green Giant and Le Sueur frozen-and-canned vegetable brands for $765 million.

General Mills is also benefiting from its $820 million acquisition of organic-snack maker Annie’s Inc., which contributed 2 percentage points of sales growth in the fiscal first quarter ended Aug. 30.

Overall, General Mills’s profit jumped to $426.6 million, or 69 cents a share, from $345.2 million, or 55 cents a share, a year earlier.

Excluding restructuring-related charges and other special costs, earnings grew to 79 cents a share from 61 cents a share a year earlier.

Revenue ticked down 1.4% to $4.21 billion. Excluding currency fluctuations, sales would have increased 4%.

Analysts polled by Thomson Reuters expected a per-share profit of 69 cents and revenue of $4.25 billion.

Pound volume grew 2% from the prior-year.

U.S. retail sales grew 3.6% to $2.53 billion amid increases in cereal, meals, yogurt, and snacks businesses.

In its international segment, sales fell 11% to $1.2 billion. Excluding currency impacts, however, sales would have been up 5%.

Convenience stores and food-service-segment sales improved 1% to $478 million.

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Gross margin improved to 36.9% from 33.7% in the prior year.

 

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