After a disappointing winter, General Mills righted the ship this spring with better-than-expected profit and a third consecutive quarter of sales growth.
The Golden Valley-based company closed the book Wednesday on another turbulent year — the new norm for packaged-food companies — as it strives to balance sales and profit growth amid big shifts in what people eat.
"The key for us is to get to the middle of the boat," Chief Executive Jeff Harmening said in an interview. "And what you have seen from us over this last year, and what you will see next year, is a greater emphasis on top-line growth [sales] than we have had, but it's certainly not at the expense of efficiency."
General Mills is beginning to see revenue growth following several years of deep cost-cutting that boosted its profit and profit margins sharply. Executives last year said they had cut too far and needed to spend more on product innovation and marketing to stimulate sales.
The plan appears to be working as sales improved 2 percent to $3.89 billion in the three months ended May 27, the fourth quarter of its fiscal year. Organic net sales — or those that don't include the impact of acquisitions — rose about 1 percent.
Its profit amounted to $354.4 million, down 13 percent from a year ago but better than analysts predicted and a positive note for investors.
"Last quarter's results were very disappointing, so I think there was a bit of a sigh of relief today," said Brittany Weissman, a food-industry analyst with Edward Jones. "There were also some positives in there of progress being made."
In April, General Mills announced the $8-billion acquisition of Blue Buffalo, a high-growth pet food maker. Many on Wall Street were initially skeptical of the deal, for both its high price tag and its divergence from General Mills' core food business, but Harmening said those skeptics have largely been calmed after hearing his rationale.
