- General Mills posted a 24% increase in profit in its latest earnings report, including a boost in profit margin to 36.9% from 33.7% the year before as the company trimmed input costs as well as selling, general, and administrative expenses.
- The company's U.S. retail sales ticked up 3.6% to $2.53 billion thanks to growth in the cereal, meals, yogurt, and snacks categories.
- Revenue fell 1.4% to $4.21 billion, and the international markets didn't fare as well as the U.S., with a 20% drop in profit and 11% drop in sales.
Growth in the retail segment is a good sign for General Mills, which, like other processed foods companies, has been struggling with decreasing sales as consumers buy fresher foods and products with cleaner labels. The company has been making a strong effort in the categories it posted growth in, including shaking up brands and developing new products as well as announcing the removal of artificial ingredients from its cereals and fruit snacks.
Those efforts include the $765 million divestiture of Green Giant and Le Sueur frozen vegetables businesses to B&G Foods, which is expected to be completed by the end of the year. It also includes the growth of Annie's, which General Mills acquired in 2014, as the brand contributed 3 points of net sales growth last quarter, according to a news release. In the past year, Annie's sales and distribution have increased by 9.4% and 11% respectively, and the brand also introduced nearly twice as many new products than the year before.
General Mills' efforts in cost-cutting and increasing profit margins, known as Project Century, are starting to pay off as well. This includes the company's recent announcement that it would be shutting down two plants, one in West Chicago by mid-2017 and one in Joplin, MO, by the end of the year.