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General Mills
reported its first quarter earnings on Wednesday. Shares of the company are down 5%.
Below are some key highlights and takeaways from its conference call.
Operations and General Remarks:
• Net sales totaled
$4.3 billion.
• Segment operating profit totaled
$690 million, 15% below prior-year due to results in our U.S. Retail segment.
• Net earnings declined 25% to $345 million and diluted earnings per share were
$0.55 as reported.
International Segments and Growth:
• U.S. Retail net sales for the first quarter were 5% below last year,
reflecting weak industry trends, along with higher trade merchandising
expense for us in this period.
• Our pound volume was down 2%, primarily driven
by declines in meals and baking products.
• We launched 145
new products across U.S. Retail, almost 20% above last year's number.
• It's important to note, however, that the increased trade expense in the
quarter does not reflect greater depth of discount.
• In total, these
six platforms; yogurt, frozen breakfast, snacks, biscuits, cereal and mixes,
posted combined net sales growth of 4%.
• Sales in Canada declined 2%.
• Latin American sales increased 20%, driven by another quarter of strong
double-digit growth in Brazil.
• In the Asia-Pacific region, sales increased 4%
led by Greater China and Korea.
• And sales for our Europe region also
increased 4% with good growth in both the UK and France.
• International profit was 16% above year-ago levels and up 17% on a constant
currency basis. And Convenience Stores and Foodservice profit increased a
robust 18%.
Guidance:
• We expect to incur approximately $15 million of net expense related to these
actions and we booked $14 million of this amount in restructuring charges in
the first quarter.
• All of our 2015 restructuring charges will be excluded from adjusted diluted
EPS.
• The effective tax rate for the quarter was 31.8% as reported.
• We invested $149 million
in fixed assets and we returned more than $700 million to shareholders
through dividends and share repurchases.
• We're also targeting mid single-digit growth in
constant currency segment operating profit.
• We plan to reinvest the benefits
of the 53rd week in growth driving activities.
• On the bottom line, we expect
adjusted diluted EPS to grow at a high single-digit rate in constant currency
from the base of $2.82 per share achieved in fiscal 2014.
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