General Mills reported results for the second quarter of fiscal 2014. The 13-week period ending Nov. 24, 2013 did not include Thanksgiving, while last year's second-quarter results included the holiday.
Fiscal 2014 Second Quarter Financial Summary
- Net sales of $4.88 billion essentially matched year-ago results. In last year's second quarter, net sales grew 6 percent.
Segment operating profit of $920 million was 4 percent below strong year-ago results.
Diluted earnings per share (EPS) totaled 84 cents, up 2 percent from the prior year.
Adjusted diluted EPS, which excludes certain items affecting comparability, totaled 83 cents this year compared to 86 cents in last year's second quarter.
Net sales for the second quarter of fiscal 2014 totaled $4.88 billion, with pound volume essentially matching prior-year levels. Net price realization and mix contributed 1 point of net sales growth. This was offset by the impact of foreign exchange translation, which reduced net sales growth by 1 percentage point.
Second-quarter gross margin was above year-ago levels due to changes in mark-to-market valuation of certain commodity positions and grain inventories. Excluding mark-to-market effects, gross margin declined in the second quarter reflecting higher input costs.
Advertising and media expense was 3 percent below year-ago levels. Total segment operating profit of $920 million was down 4 percent from prior-year results that grew 10 percent.
Second-quarter net earnings attributable to General Mills totaled $550 million and diluted earnings per share grew 2 percent to 84 cents per share. Adjusted diluted EPS, which excludes certain items affecting comparability, totaled 83 cents per share in the second quarter of fiscal 2014 compared to 86 cents a year ago.
Six Month Financial Summary
Net sales through the first six months of fiscal 2014 grew 4 percent to $9.25 billion. Incremental contributions from new businesses added during the prior year accounted for 2 points of the net sales increase.
First-half segment operating profit of $1.73 billion essentially matched year-ago results.
First-half diluted EPS totaled $1.54, down 6 percent from $1.64 a year ago.
Adjusted diluted EPS totaled $1.53 for the first half of 2014 compared to $1.52 in last year's first half.
Chairman and Chief Executive Officer Ken Powell said, "The second quarter was a difficult comparison to strong prior-year sales and earnings results for our businesses. In addition, the period included the highest quarterly input cost inflation we expect to see this fiscal year, and food and beverage industry sales in the U.S. and other developed markets slowed a bit during the quarter. Even so, our bottom-line results through the first half of the year are broadly consistent with our plans."
New products contributing to net sales growth in the first half included Yoplait blended Greek yogurt, Fiber One 90 calorie lemon and cinnamon coffee cake bars, Old El Paso stand n' stuff flour tortillas and frozen Mexican food items, Nature Valley Protein granola cereal and, in Brazil, Yoki Kit Facil dinner mixes. Established brands including Chex and Cinnamon Toast Crunch cereals, Progresso ready-to-serve soups, Totino's frozen pizza and snacks and, in China, Wanchai Ferry frozen dim sum and Haagen Dazs ice cream, also contributed to net sales growth.
