General Mills has recorded flat second quarter revenue compared to the same time last year, as its US snacks and yogurt sales continue to decline.
Meanwhile, the company’s organic net sales rose by 1% and operating profit rose by 48% to $811 million.
Sales in the firm’s largest unit, north American retail, remained in line with last years results. While the segment was significantly supported by its cereal operating unit with an increase of 5% in net sales, its US meals and baking, snacks and yogurt units offset its growth with net sale declines of 1%, 2% and 4% respectively.
General Mills’ second-quarter results were boosted once again by its pet segment which saw net sales growth of 16% to $389 million. The unit was driven primarily by the acquisition of pet food company Blue Buffalo last year for $8 billion and the addition of its lines Life Protection Formula and Wilderness to its portfolio.
In terms of its convenience stores and food service segment, net sales matched last years as the category saw low-single digit growth in its cereal, frozen baked good and yogurt.
While Europe and Australia saw a decline of 5% in net sales largely driven by weak performance in yogurt, this was particularly offset by growth in its Old El Paso brand, and its Nature Valley and Fibre One snack bars.
Net sales in Asia and Latin America also declined by 5%, driven by divestitures in fiscal 2019 and unfavourable foreign currency exchange, according to General Mills. Organic net sales increased by 1%, with growth in Latin America and China partially offset by declines in India.
“I’m encouraged by our second-quarter performance, including the broad-based improvement in our organic sales trends and positive results on the bottom line,” said General Mills chairman and CEO Jeff Harmening.
Harmening added: “We will build on our topline momentum in the second half, fuelled by increased investment in our brands. Based on our first-half results, and with confidence in our back-half plans, we are reaffirming our full-year fiscal 2020 guidance for sales, profit, and EPS and raising our guidance for free cash flow conversion.”
As predicted in June, for its 2020 fiscal year, General Mills expects a 1-2% growth in organic net sales and adjusted operating profit to rise between 2-4%.
© FoodBev Media Ltd 2019