MINNEAPOLIS _ Blue Buffalo, General Mills' pet food line, did its job last quarter by bolstering sales growth as the company tries to get two of its important U.S. businesses, yogurt and snack bars, back on track.
The Golden Valley-based food maker posted better-than-expected adjusted earnings per share of 95 cents on a $580.8 million profit. Consensus among 17 analysts polled by Thomson Reuters expected 88 cents earnings per share for General Mills' second quarter, ended Nov. 24.
Investors sent the stock up more than 2% in premarket trading Tuesday on the upbeat results.
The maker of Cheerios and Betty Crocker cake mixes posted net sales of $4.42 billion sales, slightly missing Wall Street's expectations of $4.43 billion.
Still, General Mills eked out 1% organic sales growth _ an industry measure that removes one-time accounting benefits to give a picture of true growth. It's an important metric as executives have told investors that this is the fiscal year it will get the company back to real organic growth.
The company reaffirmed full-year guidance on sales, profit, and earnings per share, and raised guidance for free cash flow conversion.
"I'm encouraged by our second-quarter performance, including the broad-based improvement in our organic sales trends and positive results on the bottom line," General Mills chief executive Jeff Harmening, said in a news release.
The pet segment grew sales 16% on continued expansion into mainstream grocery and general merchandise stores, and through online sales.
North America, the company's biggest and most important segment, held steady compared to a year thanks to the company's hallmark business, U.S. cereal, which grew sales 5%. U.S. yogurt had a more disappointing quarter with sales down 4% and U.S. snacks sales _ which have trying to recover from unexpected losses in its Nature Valley and Fiber One brands _ were down 2%.
