Higher costs blunt General Mills’ sales growth28 June 2012
US bakery, dairy and cereal manufacturer General Mills has recorded a 1.6% increase in fourth-quarter earnings but the firm continued to struggle with higher costs and cautious consumer spending.
The Betty Crocker bakery products manufacturer reported profit of $325.4 million in the quarter ending 27 May, up from $320.2 million a year earlier. Sales increased by 12% to $4.07 billion but gross margin fell to 36.8% from 37.5%.
General Mills has battled higher raw material costs by implementing price increases and reducing product sizes.
The company has also outlined plans to boost its share of the growing US yoghurt market by growing sales of its Chobani Greek-style brand and launching 35 new yoghurt products in 2013. The firm has also set its sights on more product launches in emerging markets such as China.
"Fiscal 2012 was characterized by the highest input-cost inflation we've experienced in more than three decades, and this cost pressure constrained our earnings growth," said Ken Powell, General Mills’ chairman and chief executive.
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