General Mills Inc. said Wednesday that its fiscal fourth-quarter profit almost doubled as consumers stuck with its well-known brands such as Cheerios cereal and Yoplait yogurt.
Adjusted earnings per share beat Wall Street estimates, although sales came in slightly short. The company also offered earnings guidance for 2010 above analysts' expectations.
Consumers have been pulling back on their spending at restaurants during the recession and heading to grocery stores. That trend is helping sales for Golden Valley, Minn.-based General Mills, though many consumers also are switching to less expensive in-house brands once they get to the store.
To keep wooing shoppers, the food maker has been pushing new versions of its products _ like banana nut Cheerios _ and boosting marketing. General Mills increased its spending on marketing 19 percent in the fourth quarter, and that momentum will continue in fiscal 2010, said Ian Friendly, chief operating officer for U.S. retail.
"Consumers are back in the stores, and products across our portfolio deliver what they need, taste, convenience, nutrition and value," he told investors on a conference call. "So we think this is a great time to talk about our brands and introduce some items."
The company plans to bring out Progresso soups with high fiber, gluten-free Betty Crocker dessert mixes and new versions of Yoplait yogurt including smoothies this fiscal year, among other new items.
For the three months that ended May 31, General Mills earned $358.8 million, or $1.07 per share, up from $185.2 million, or 53 cents per share, a year earlier.
Excluding restructuring charges, a loss on some product lines that were sold and other one-time items, it earned 86 cents per share.
Analysts surveyed by Thomson Reuters, who generally exclude one-time items, forecast earnings of 81 cents per share.
Shares rose $1.25 on the news, or more than 2 percent, to $57.27 in morning trading Wednesday.
Quarterly sales rose 5 percent to $3.65 billion from $3.47 billion, helped by an extra week in the period. Still, sales fell short of Wall Street's estimate of $3.69 billion.
The company's U.S. retail division, which sells to stores, posted a sales rise of more than 11 percent in the quarter to finish at $2.5 billion, including the extra week. Yoplait, Big G cereals and Pillsbury USA were among the product lines posting double-digit sales increases.
Overseas, sales dropped 5 percent due to the stronger dollar, which cut results 17 percent. As the U.S. dollar gains strength, that weighs on international sales once they are converted back to U.S. dollars.
The company's bakeries and foodservice segment, which sells to outlets like hotels and restaurants, continued to hurt as consumers held back on eating out, with sales down 9 percent for the quarter.
Annual net income edged up to $1.3 billion, or $3.80 per share, from $1.29 billion, or $3.71 per share, in fiscal 2008. Annual sales climbed 8 percent to $14.69 billion from $13.65 billion.
The company says its fiscal 2010 earnings will be in a range of $4.20 to $4.25 per share, which is above the $4.18-per-share estimate of analysts polled. The company said its expectations assume that foreign currency translation will still be an issue.
The company did not offer a quarterly outlook.
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AP Business Writer Michelle Chapman contributed to this report from New York.
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