General Mills’ third-quarter sales and operating profit reflected lower volumes. The company said weak food industry trends during the period as a result of a severe winter affected its results, as did increased consumer marketing and merchandising investment in its U.S. yogurt business.
Net sales for the quarter ended Feb. 23 totaled $4.38 billion, down 1% from year-ago levels. Third-quarter net earnings totaled $411 million and diluted earnings per share totaled 64 cents per share.
"This year's severe winter weather dampened sales performance across the food industry, and third-quarter results for our U.S. retail and convenience stores and foodservice segments reflect that disruption,” said chairman and CEO Ken Powell. “International segment results were stronger, with constant-currency sales gains in every region including double-digit growth in both Asia-Pacific and Latin America."
Third-quarter net sales for General Mills' U.S. retail segment declined 2% to $2.62 billion. The company said higher dairy input costs and increased marketing and merchandising investment for the U.S. yogurt business helped to fuel the decrease.
Third-quarter net sales for General Mills' consolidated international businesses grew 2% to $1.32 billion. On a constant-currency basis, international net sales increased 7% overall. Constant-currency net sales grew 17% in Latin America, led by Brazil, and grew 14% in Asia-Pacific, led by China. The Canada and Europe regions each achieved a 2% gain in constant-currency net sales.
Third-quarter net sales for the convenience stores and foodservice segment totaled $437 million, down 7% from year-ago levels. The company said severe weather hampered foodservice industry performance.
Combined after-tax earnings from the Cereal Partners Worldwide (CPW) and Haagen-Dazs Japan (HDJ) joint ventures totaled $23 million in the third quarter, up 7%. Constant-currency net sales grew 1% for CPW and increased 13% for HDJ.