General Mills posts increased Q2 net sales posts increased Q2 net sales

MINNEAPOLIS General Mills on Wednesday reported results for the second quarter of fiscal 2008. Net sales for the 13 weeks ended Nov. 25, 2007, rose 7 percent to $3.70 billion. Segment operating profits essentially matched last year’s second quarter at $716 million, including higher input costs, a 10 percent increase in consumer marketing investment and $20 million pre-tax expense associated with a product recall of frozen pepperoni pizza. Net earnings totaled $391 million including restructuring and associated costs of $20 million pre-tax, $13 million after tax. Diluted earnings per share totaled $1.14, up 6 percent from $1.08 a year ago.

Through the first six months of 2008, General Mills’ net sales increased 7 percent to $6.78 billion. Second-quarter net sales for General Mills’ U.S. retail operations grew 3 percent to $2.52 billion. Second-quarter net sales for General Mills’ consolidated international businesses grew 22 percent to $666 million.

The company’s snacks division net sales grew 12 percent, fueled by strong sales for Nature Valley grain snacks, Fiber One bars and fruit snacks. The Yoplait division net sales increased 11 percent and Big G cereals grew 3 percent, following 5 percent growth in the first quarter of 2008. Net sales for baking products also increased 3 percent while the meals division net sales grew 1 percent, led by Progresso ready-to-serve soups. Pillsbury USA division sales declined 2 percent, including the impact of the frozen pizza recall. Net sales for the company’s Small Planet Foods organic business rose 14 percent.

Looking ahead to the second half of fiscal 2008, Chief Executive Officer Ken Powell said, “We expect our good sales momentum to continue, with contributions from additional new product introductions, selected pricing actions and ongoing investment in brand-building activities. For the year in total, we now estimate that our net sales will grow at a mid-single digit rate, exceeding our long-term goal of low single-digit sales growth.”