General Mills (NYSE: GIS) reported results for the second quarter of fiscal 2014. The 13-week period ending Nov. 24, 2013 did not include Thanksgiving, while last year’s second-quarter results included the holiday.

Fiscal 2014 second quarter financial summary:

Net sales for the second quarter of fiscal 2014 totaled $4.88 billion, with pound volume essentially matching prior-year levels. Net price realization and mix contributed 1 point of net sales growth. This was offset by the impact of foreign exchange translation, which reduced net sales growth by 1 percentage point. Second-quarter gross margin was above year-ago levels due to changes in mark-to-market valuation of certain commodity positions and grain inventories. Excluding mark-to-market effects, gross margin declined in the second quarter reflecting higher input costs. Advertising and media expense was 3 percent below year-ago levels. Total segment operating profit of $920 million was down 4 percent from prior-year results that grew 10 percent. Second-quarter net earnings attributable to General Mills totaled $550 million and diluted earnings per share grew 2 percent to 84 cents per share. Adjusted diluted EPS, which excludes certain items affecting comparability, totaled 83 cents per share in the second quarter of fiscal 2014 compared to 86 cents a year ago.

Six month financial summary:

Chairman and Chief Executive Officer Ken Powell said, “The second quarter was a difficult comparison to strong prior-year sales and earnings results for our businesses. In addition, the period included the highest quarterly input cost inflation we expect to see this fiscal year, and food and beverage industry sales in the U.S. and other developed markets slowed a bit during the quarter. Even so, our bottom-line results through the first half of the year are broadly consistent with our plans.”

New products contributing to net sales growth in the first half included Yoplait blended Greek yogurt, Fiber One 90 calorie lemon and cinnamon coffee cake bars, Old El Paso stand n’ stuff flour tortillas and frozen Mexican food items, Nature Valley Protein granola cereal and, in Brazil, Yoki Kit Facil dinner mixes. Established brands including Chex and Cinnamon Toast Crunch cereals, Progresso ready-to-serve soups, Totino’s frozen pizza and snacks and, in China, Wanchai Ferry frozen dim sum and Häagen Dazs ice cream, also contributed to net sales growth.

U.S. retail segment results
Second-quarter net sales for General Mills’ U.S. Retail segment declined 1 percent to $2.97 billion. Lower pound volume reduced net sales growth by 2 percentage points, while net price realization and mix contributed 1 percentage point of net sales growth. The Snacks, Small Planet Foods and Big G divisions each contributed net sales growth in the quarter, while net sales for the remaining U.S. Retail divisions were lower. Advertising and media expense declined 1 percent in the period. Segment operating profit totaled $682 million, 6 percent below strong year-ago results.

Through the first six months of fiscal 2014, U.S. Retail segment net sales grew 1 percent to $5.55 billion. Lower pound volume reduced net sales growth by 1 percentage point, while net price realization and mix contributed 2 percentage points to net sales growth. First half segment operating profit of $1.29 billion essentially matched year-ago results including a 1 percent increase in advertising and media expense.

International segment summary
Second-quarter net sales for General Mills’ consolidated international businesses grew 2 percent to $1.40 billion. Pound volume contributed 2 percentage points of net sales growth, and net price realization and mix contributed 3 percentage points of growth. Foreign currency exchange reduced net sales growth by 3 percentage points. On a constant-currency basis, International segment net sales rose 5 percent overall. Constant-currency net sales grew 22 percent in Latin America, led by Brazil. Sales growth in China drove a 5 percent increase in Asia-Pacific constant-currency sales. In Canada, constant-currency net sales grew 4 percent. Europe’s constant-currency net sales were 2 percent below prior-year results. International segment operating profit grew 10 percent to $153 million.

Through the first six months of fiscal 2014, International segment net sales grew 10 percent to $2.72 billion. Pound volume grew 14 percent, primarily reflecting incremental contributions during the first quarter from businesses added during 2013. Net price realization and mix reduced six-month net sales growth by 1 percentage point, and foreign currency exchange reduced growth by 3 percentage points. Segment operating profit grew 5 percent to $279 million including a 2 percent increase in advertising and media expense.

Convenience Stores and Foodservice
Second-quarter net sales for the Convenience Stores and Foodservice segment totaled $507 million, down 2 percent from year-ago levels due to negative net price realization and mix. Pound volume essentially matched year-ago levels. Segment operating profit totaled $85 million, down 12 percent from year-ago levels that grew 24 percent.

Through the first six months of fiscal 2014, Convenience Stores and Foodservice segment net sales totaled $975 million, down 1 percent from the previous year due to a decline in pound volume. Segment operating profit of $159 million was 3 percent below year-ago results.