Overall, sales figures for General Mills fell by 2% to $4.0 billion (€361.7 billion) in the first quarter of the group's financial year.
Organic net sales were down 1%, which the group said reflected lower organic volume, partially offset by positive organic net price realisation and mix across all operating segments.
The group's Europe & Australia division saw net sales fall 9% to $454 million (€411.3 million) in the period, however it said that its performance was slightly offset by benefits from net price realisation and mix.
Organic net sales at the division were down 5%, with the group citing challenges in the French market for its yoghurt and ice cream brands, as well as differences in merchandising phasing.
On a constant-currency basis, the operating profit of the Europe & Australia segment fell by 15%, with the group saying that this was driven primarily by a 'timing difference in brand-building investment and lower volume'.
Overall Performance
Operating profit was up 10% to $662 million (€599.5), while operating profit margin of 16.5% increased 180 basis points. Constant-currency adjusted operating profit increased 7%.
The profit boost came as Jeff Harmening, chief executive praised the group's efforts to become a "nimbler, more consumer-connected" organisation.
“Our first-quarter net sales performance included encouraging improvement in North America Retail and strong growth in Pet, driven by good innovation and effective brand-building investment,"Harmening said.
"We got off to a slower start in our other segments, and we’re taking actions to drive topline improvement for those segments and the company starting in the second quarter."
In terms of the group's other divisions, North America Retail saw flat reported net sales; its Pet division rose by 7%; Convenience Stores & Foodservice saw a 4% decline in reported net sales, and Asia & Latin America saw a 10% decline.
Looking Ahead
Looking ahead to the coming year, General Mills expects organic net sales to increased by between 1% and 2%, due to benefits from currency translation, divestures executed in fiscal 2019, and contributions from the 53rd week in 2020.
“On the bottom line, we delivered profit and earnings growth ahead of our expectations while continuing to invest in our brands and capabilities. We remain on track to deliver our fiscal 2020 goals, including accelerating our organic sales growth, maintaining our strong margins, and reducing our leverage.”
© 2019 Checkout – your source for the latest Irish retail news. Article by Donna Ahern. Click subscribe to sign up for the Checkout print edition.
