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What General Mills’ Segments Contributed in Fiscal 2Q16

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U.S. Retail segment

General Mills’ (GIS) U.S. Retail segment contributed the most to total sales and operating profit in fiscal 2Q16. Net sales for the segment totaled $2.8 billion, a fall of 4% compared to fiscal 2Q15 mainly due to pound volume. Acquisitions and divestitures reduced the net sales growth further by 1%. The report included a 1% decline for the Snacks and Baking Products operating units, while net sales for each of the remaining operating units saw declines in the mid-single digits.

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For the first half of fiscal 2016, net sales totaled $5.3 billion, which was mostly flat compared to the same period last fiscal year. Acquisitions and divestitures added 1 point to the growth, while net price realization and mix added 2 points. Lower pound volume reduced net sales growth by 2 points. The segment’s products that contributed to net sales in the first half of fiscal 2016 included Cinnamon Toast Crunch and Lucky Charms cereals, Yoplait Greek yogurt, Nature Valley grain snacks, Annie’s soup and other natural and organic products, Totino’s hot snacks, and Progresso soup.

International segment

The net sales for consolidated international businesses fell 12% to $1.2 billion, as foreign currency exchange reduced net sales growth by 15 percentage points. On a constant-currency basis, net sales rose by 3%. Pound volume reduced net sales growth by 2 points, and net price realization and mix contributed 5 points to the growth. Constant-currency net sales rose 17% in Latin America, 3% in Canada, and 2% in the Asia-Pacific region but declined 2% in Europe.

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For the first half of fiscal 2016, net sales totaled $2.4 billion, a fall of 12% from last year. Foreign currency exchange reduced net sales growth by 16 percentage points. On a constant-currency basis, net sales grew by 4%. Pound volume added 1 point to net sales growth, while net price realization and mix added 3 points. Products in this segment that contributed to the growth were Häagen-Dazs ice cream and Old El Paso Mexican products in Europe, Nature Valley snacks in Canada, and Betty Crocker sweet snacks in the Asia-Pacific region.

Convenience Stores segment

Net sales for the Convenience Stores segment fell 4% to $506 million. Pound volume reduced net sales growth by 3 points, and unfavorable net price realization and mix reduced net sales growth by 1 point. Frozen meals, yogurt, biscuits, and mixes led sales performance in the quarter. For the first half of fiscal 2016, net sales fell 2% to $984 million, driven by lower pound volume. Pillsbury frozen mini-bagels, Bugles, Chex Mix salty snacks, and Yoplait Greek and Parfait Pro yogurt varieties were high net sales contributors.

Peers’ sales

General Mills’ competitors in the industry include Campbell Soup (CPB), ConAgra Foods (CAG), and Mead Johnson Nutrition Company (MJN). They reported revenue of $2.2 billion, $2.7 billion, and $978 million, respectively, for their last reported quarter. The Guggenheim S&P 500 Equal Weight Consumer Staples ETF (RHS) and the First Trust Capital Strength ETF (FTCS) invest 2.5% and 2.1%, respectively, of their portfolios in MJN.

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