(Reuters) - General Mills Inc (GIS.N) reported higher-than-expected quarterly sales on Wednesday, helped by growing demand for its yogurt and the addition of new international businesses.
The maker of Cheerios and Chex cereals also posted a profit in line with analysts’ estimates and stood by its fiscal-year outlook.
Net sales rose 8 percent to $4.37 billion in the first quarter ended on August 25. Analysts on average were expecting $4.3 billion, according to Thomson Reuters I/B/E/S.
International acquisitions such as Yoki Alimentos in Brazil and Yoplait Canada in the previous year contributed 5 percentage points to sales growth, the company said. Net sales outside the United States rose 22 percent to $1.32 billion.
Sales of Greek-style yogurt doubled, Chief Executive Officer Ken Powell said during the company’s earnings call.
He also said there was ample room for the company to expand its yogurt business.
Powell said products like Yoplait Greek Blended, launched earlier this year, and the reduced-calorie Yoplait Greek 100, which brought in $150 million in sales last year, would help spur this growth.
Executives also expressed optimism over the future of cereal, despite some analysts’ concerns that it was losing momentum in the United States.
“Demographically, cereal has a lot of tailwinds,” said Jim Murphy said, president of the Big G cereals unit. Baby boomers, families with young children and Hispanics are among the biggest consumers of these products, he added.
General Mills affirmed its fiscal 2014 earnings outlook for 2014 of $2.87 to $2.90 per share before special items.
In the first quarter, net income fell to $459.3 million, or 70 cents per share, from $548.9 million, or 82 cents per share, a year earlier, in line with analysts’ expectations.
Excluding tax-related gains and other special items, year-earlier earnings were 66 cents per share.
General Mills increased spending on advertising by 7 percent in the first quarter and said it would continue to invest in innovation and marketing over the coming months.
Shares of General Mills were down 1.2 percent at $49.19 in morning trading.
Reporting by Atossa Araxia Abrahamian; Editing by Lisa Von Ahn