Despite continued heavy price promotion activity among CPGs, General Mills continued to show strong performance during its 2011 fiscal first quarter. The company reported 13% growth in net earnings (diluted EPS of $0.70) and net sales growth of 1% (to $3.53 billion).
Recent product launches -- including Chocolate Cheerios, Wheaties Fuel, new grain snack bars and fruit snack varieties, new Yoplait Greek yogurt varieties and Yoplait Splitz layered yogurts -- helped drive a 2% increase in U.S. retail sales to $2.45 billion, on top of 6% sales growth in last year's first quarter.
Key existing brands also showed growth. These included Multigrain Cheerios, Fiber One, Cinnamon Toast Crunch, Yoplait original and Yoplait Light, Green Giant frozen vegetables, Old El Paso Mexican foods and Betty Crocker cake and frostings.
The growth was supported by increased marketing: Advertising and media expenditures rose 8% during the quarter.
Chairman/CEO Ken Powell also cited the company's continued focus on holistic margin management as a key factor in its earnings performance.
Lines showing U.S. net sales growth included Big G cereals (4%), snacks (5%), Yoplait (4%) and meals (3%). The organic/natural products line Small Planet Foods gained 15%, reflecting growth from Cascadian Farm cereals and granola bars.
Lines that showed declines included Pillsbury (down 3%, against a double-digit gain in last year's comparable period) and baking products (down 6%).
The Q1 performance exceeded the expectation of analysts, who characterized it as good news for the food industry as a whole, given the promotional climate.
General Mills confirmed that its 2010 fiscal performance included 18% growth in diluted EPS (to $2.24) and net sales growth of 1% (to $14.8 billion).