The company’s international acquisition of yogurt brand Yoplait and growth in the snacks segment helped it grow net sales 13% to $4.12bn.
However, input cost increases of around 11% negatively impacted margins and operating profit remained largely flat, up just 1% to $675m.
International markets flourish
European net sales at constant currency rates grew by an overwhelming 126% with fajita range Old El Paso, yoghurt brand Yoplait and snack bars Nature Valley all performing strongly.
Overall growth for international business stood at $1.04bn, up 51% on the same period in fiscal 2011.
Europe was the driver, but the company also made a substantial gain in Canada and also grew in double digits in Asia-Pacific and Latin America.
By comparison, sales in General Mills’ domestic US market grew 4% to $2.61bn, but segment operating profit for this market was down 4% to $512m.
Snacks boom
The company’s snacks division oversaw 7% growth, relecting strong performance by Nature Valley and Fiber One snack bars.
General Mills recently entered the natural salty snack segment with the acquisition of Food Should Taste Good to capatalise on growth in ‘healthy’ convenience products.
Established brands such as Honey Nut Cheerios and Cinnamon Toast Crunch also helped General Mills’ cereal segment grow 6%.
Outlook
General Mills chairman and CEO said: “Fiscal 2012 has represented a challenging operating environment, with the highest level of commodity inflation that we’ve seen in 30 years.”
“In the fourth quarter, we expect to generate continued good sales momentum and we anticipate that gross margin contraction will ease somewhat.”
“This should result in renewed earnings growth as we wrap up 2012 and move into the new fiscal year.”
Bakery formulation
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