General Mills recorded a 7.2% increase in year-on-year net sales for its 2019 fiscal year, despite seeing its snack bar sales falter in North America.
The owner of Yoplait, Cheerios and Old El Paso posted net sales of $16.87 billion for the year ended 26 May 2019. Operating profit rose 4% to $2.52 billion.
Despite the positive figures, sales in the firm’s largest unit, North America retail, shrank by 1.9%, in part due to poor performances of brands such as Fiber One and Nature Valley.
In an earnings call, General Mills CEO Jeff Harmening said Fiber One “declined significantly” in fiscal 2019, while innovation and in-store execution for Nature Valley “did not meet objectives”.
The company’s performance was particularly poor in its Europe and Australia unit, where net sales were down 5%. Declines for the yogurt platform were partially offset by growth for snack bars and ice cream.
The revenue increase for the year was driven primarily by the addition of Blue Buffalo, the pet food company General Mills bought last year for $8 billion in a move to diversify its portfolio.
“I’m pleased to say that we executed well, successfully transitioned Blue Buffalo into our portfolio, and delivered our financial commitments in fiscal 2019,” Jeff Harmening said. “We’ll look to improve our performance again in fiscal 2020, and we have plans in place to accelerate our organic sales growth while maintaining our strong margins and cash discipline.”
He added: “In fiscal 2020, our plans include continued strong innovation and investments in capabilities and brand building to accelerate our topline growth, efficiency initiatives to maintain our strong margins, and a disciplined focus on cash to further reduce our leverage.
“We remain confident that executing our Consumer First strategy and our Compete, Accelerate, and Reshape growth framework will drive sustainable, profitable growth and attractive long-term returns for our shareholders.”
For its 2020 fiscal year, General Mills expects organic net sales to increase between 1-2% and adjusted operating profit to rise between 2-4%.
© FoodBev Media Ltd 2020