Sorry!! The article you are trying to read is not available now.
Thank you very much;
you're only a step away from
downloading your reports.

Behind General Mills' Tasty Results


An increase in home cooking bodes well for the food maker.

American consumers spend their free time reading about the possibility of a double-dip recession, a lousy labor market, housing woes, and record deficits. So, when the dinner bell rings, who can blame them for deciding to stay in rather than dine out?

It might be tough for restaurants to hear that consumers are eating at home more these days, but it's welcome news for General Mills (GIS), which reported a big jump in first-quarter profit Wednesday morning on the back of strong consumer demand and lower commodity prices. The results, which easily beat the Street's expectations, sent investors rushing in: Shares were up 5% in midday trading.

General Mills earned $420.6 million, or $1.25 per share, versus $278.5 million, or 79 cents per share, in the year-ago period. Excluding items, profit was $1.28 per share. Analysts had been looking for $1.03 per share, according to

Sales grew 1% from the prior year to $3.52 billion. Analysts covering the company said they were particularly impressed by the 6% year-over-year sales growth in the firm's US retail segment.

As a result of these better-than-expected numbers, the food maker also lifted its full-year outlook to a range of $4.40 to $4.45 per share, up from $4.20 to $4.25. Analysts on average expect $4.26 per share.

Pop open your cupboard at home and you'll likely find a General Mills product. The processed-foot giant holds the number one or number two position in virtually every category in which it competes. The firm owns the number-one ready-to-eat cereal franchise, Cheerios, which maintains about 12% of the market. Its Pillsbury brand dominates its segment with 69% share of the market. Other notable brands: Haagen-Dazs, Yoplait, Wheaties, Hamburger Helper, and Bettie Crocker.

On average, US shoppers place at least one General Mills product into their shopping cart each time they hit the local grocery store.

"I thought it was a pretty good start to the year," says Erin Swanson, an analyst at Morningstar who covers the company. "Their portfolio of products really lends itself to consumers who are eating more at home. Their relentless focus on improving their cost structure was also evident in the quarter. Margins improved pretty dramatically over the year-ago quarter."
< Previous
No positions in stocks mentioned.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
Featured Videos