MINNEAPOLIS, July 1, 2015 /PRNewswire/ -- General Mills today reported results for the fourth quarter and full fiscal year ended May 31, 2015. Fiscal 2015 was a 53-week year, with the extra week falling in the fourth quarter.
Fourth Quarter Results
Fourth-quarter net sales of $4.3 billion essentially matched year-ago levels. Pound volume contributed 3 points of net sales growth, including incremental contributions from the Annie's organic foods business acquired in October 2014 and an extra week in this year's period. Net price realization and mix also contributed 3 points of growth. These factors were offset by a 6 point reduction in net sales from foreign currency exchange effects. On a constant-currency basis, net sales increased 6 percent.
Adjusted gross margin, which excludes mark-to-market effects and certain other items affecting comparability, increased 70 basis points due to net price realization. Selling, general, and administrative expenses declined due to a 6 percent decrease in advertising and media expense, and savings from restructuring actions. Total segment operating profit increased 9 percent to $800 million. The company recorded an intangible asset impairment charge of $260 million, a $79 million charge related to the repatriation of foreign earnings, and restructuring and project-related charges totaling $35 million pretax. Net earnings attributable to General Mills totaled $187 million and diluted EPS totaled30 cents. Adjusted diluted EPS, which excludes certain items affecting comparability, totaled 75 cents for the fourth quarter, up 12 percent from 67 cents a year ago. On a constant-currency basis, fourth-quarter adjusted diluted EPS increased 18 percent.
Full Year Results
Fiscal 2015 net sales decreased 2 percent to $17.6 billion. Pound volume reduced net sales growth by 1 percent, including incremental contribution from the extra week. Net price realization and mix contributed 2 points of net sales growth. This was offset by a 3 point reduction in net sales growth from foreign currency exchange effects. On a constant-currency basis, net sales increased 1 percent. Adjusted gross margin declined 70 basis points, reflecting volume deleverage.
Selling, general, and administrative expenses decreased 4 percent due to a 5 percent decrease in advertising and media expense, along with savings from restructuring actions. Total segment operating profit declined 4 percent to $3.0 billion. Restructuring, impairment, and other exit costs, along with project-related costs recorded in cost of sales, totaled $617 million. Fiscal 2015 net earnings attributable to General Mills totaled $1.2 billion and diluted EPS totaled $1.97. Adjusted diluted EPS totaled $2.86 in fiscal 2015, up 1 percent from $2.82 earned last year. On a constant-currency basis, adjusted diluted EPS increased 4 percent.
U.S. Retail Segment Results
Fiscal 2015 net sales for General Mills' U.S. Retail segment declined 1 percent to $10.5 billion, reflecting lower pound volume. Annie's contributed 1 point of net sales growth and 1 point of pound volume growth. The Snacks and Yogurt operating units led U.S. Retail sales performance for the year. Cereal unit net sales declined, but the company's brands increased their share of U.S. cereal category sales. Advertising and media expense was 6 percent below last year's level. U.S. Retail operating profit declined 7 percent to $2.2 billion.
Fourth-quarter net sales for the U.S. Retail segment increased 5 percent to $2.5 billion. Pound volume contributed 3 points to net sales growth, while net price realization and mix added another 2 points. Segment operating profit totaled $565 million, 13 percent above year-ago results.
Convenience Stores and Foodservice Segment Results
Fiscal 2015 net sales for the Convenience Stores and Foodservice segment totaled $2.0 billion, 4 percent above prior-year results. Pound volume added 1 point of net sales growth, while net price realization and mix added 3 points. The yogurt, frozen breakfast, snacks, and cereal platforms led net sales growth for the year. Segment operating profit totaled $353 million, an increase of 15 percent.
In the fourth quarter, Convenience Stores and Foodservice net sales grew 4 percent to $527 million, driven by increases in pound volume. Segment operating profit rose 17 percent to $101 million reflecting the extra week and favorable business mix. View the full report here.
