General Mills (GIS) reported better than expected performance from its US Retail segment this morning. Not only did this segment expand margins, it also grew sales by 5.8%. Overall GIS earnings per share came in at $1.28 on an adjusted basis, up substantially from $0.96 last year. While overall sales, including the international business, were flat, margins expanded for the company overall despite a 16% increase in advertising.
Such performance led the company to boost expected fiscal year 2010 earnings to $4.40 to $4.45 per share. If achieved, this would be the highest earnings level ever for the company, and substantially higher than even 2008’s recent $3.52 per share.
It’s encouraging to see a company investing in growth, growing, and with a US Retail segment leading the charge.
Ken Powell, CEO: “We’re very pleased with this start to the year. We’re seeing continuing strong consumer demand for our products… In addition, our commodity and fuel costs for the quarter were below year-ago levels, helping us to recover margin that was lost in the same quarter last year. These factors drove first-quarter earnings growth that was well ahead of our expectations. As a result we’ve raised our EPS targets for the full year.”