General Mills Sees Foodservice Sector Services Remaining Weak
February 17 2009 - 8:47AM
Dow Jones News
General Mills Inc.'s (GIS) margins will expand in its fiscal
fourth quarter as commodity prices decline, Chief Executive Ken
Powell told investors at a consumer conference in Florida.
The company said its retail sales will continue to get a bump up
from consumer eating at home more. To that end the cereal maker is
pushing brands like its Savorings appetizers, and Grands cinnamon
rolls. The company is also seeing sales grow for cereal brands like
Cheerios and easy to prepare products like Hamburger Helper.
Although prices for crude and many other commodities have declined,
consumer manufacturers are yet to report a major benefit from that
pullback as these large companies had hedges in place and have been
waiting for some of these positions to roll off. The company is "on
track for another good year in 2009," Powell said, speaking at the
Consumer Analyst Group of New York conference, pointing to the
consumer shift to eating at home. For the fiscal year that ends May
the company expects earnings of $3.83 to $3.87 a share, excluding
items. Still, foodservice continues to remain a weak spot for the
company, which doesn't expect that part of its business to grow
profits for the fiscal year. The company said third quarter margins
will be below year ago levels. -Anjali Cordeiro; Dow Jones
Newswires; 201-938-2408; anjali.cordeiro@dowjones.com