General Mills (GIS)

U.S. Retail Unit Volume Growth - Fiscal 2005 vs. 2004

For the third quarter, Yoplait yogurt made the strongest contribution to domestic retail unit volume growth, with an 18 percent overall increase led by performance of Yoplait Light and Go-Gurt. Meals volume grew 5 percent, with growth in Progresso Soup and Helper dinner mixes. Snacks unit volume rose 7 percent, driven by the introduction of new products including Nature Valley’s Sweet & Salty Snack Bars. Unit volumes for several businesses declined as the Company worked to raise non-promoted and merchandised price points. Pillsbury USA volume fell 4 percent, as growth in Totino’s pizza and hot snacks was more than offset by volume declines in refrigerated baked goods. Baking Products volume was down 6 percent, and Big G cereal volume fell 9 percent as actions to raise merchandised prices resulted in significant declines in promoted volumes.

For the first thirty-nine weeks of fiscal 2005, net sales for our U.S. Retail segment grew 2 percent to $5.97 billion, in line with unit volume growth in the period. Year to date Yoplait yogurt volume has grown 11 percent led by growth of Yoplait Light and Go-Gurt. Baking volume has increased 5 percent led by growth in club stores and in Wal-Mart. Pillsbury USA is up 3 percent driven by Totino’s Pizza and hot snacks. Meals volume rose 2 percent driven by the performance of Progresso Soup, Dry Dinners and Old El Paso. Snacks volume has increased 2 percent due to growth in club stores, as well as from the launch of Nature Valley Sweet & Salty Snack Bars. Big G volume is down 2 percent year to date. Operating profits decreased from $1,348 million last year to $1,342 million, reflecting higher commodity costs and promotional spending.

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Consumer retail purchases of the Company’s products grew 3 percent in the quarter and were up 2 percent year-to-date.

U.S. Retail Unit Volume Growth – Fiscal 2005 vs. 2004

Pillsbury USA unit volume was up 4 percent led by refrigerated cookies, frozen baked goods and Totino’s pizza and hot snacks. Baking Products volume increased 8 percent driven by merchandising programs. Volume for Yoplait yogurt was up 6 percent driven by growth in cup yogurt and Go-GURT yogurt-in-a-tube. Meals volume was up with gains on Old El Paso Mexican products, Green Giant frozen vegetables and Betty Crocker dinner mixes. Progresso soup unit volume was flat for the quarter, compared to double-digit volume growth in the period last year when eight Rich and Hearty varieties were being introduced. Big G cereal was flat for the quarter, and Snacks unit volume decreased 1 percent reflecting high levels of competitive new product activity.

Consumer retail purchases of the Company’s products grew 1 percent in the quarter, despite strong year-ago performance when composite retail sales for the Company’s major product lines increased 4 percent.

For the first half, net sales for our U.S. Retail segment grew 3 percent to $4.04 billion, as 3 percent unit volume growth and contributions from pricing and mix (3 points) were partially offset by higher promotional expense (-3 points) in the period. This promotional spending included increased expense to maintain previously committed merchandising programs following recent list price increases as well as introductory support for new items. Operating profits declined from $940 million last year to $921 million for the first half this year, reflecting higher commodity costs and promotional spending. For the first half, consumer retail purchases of the Company’s major product lines were up 2 percent.