Bi-Lo names president
Jacksonville, Fla. — Anthea Jones has assumed the role of president at Bi-Lo. He will continue to serve as SVP operations.
Jones comes to the position from the Bi-Lo side of the recent merger between regional supermarkets Bi-Lo and Winn-Dixie. He signed on with Bi-Lo in 1999 after 17 years at Food Lion. He also is the immediate past board chairman for the Global Market Development Center.
Jones succeeds Michael Byars in the position. Randall Onstead continues as president and CEO of the combined company, Bi-Lo Holdings.
E-commerce growth not enough to help FedEx
FedEx on Wednesday reported average daily package volume growth of 10% during the third quarter at its ground division, but it wasn’t enough to offset weakness elsewhere and profits were well short of analysts’ estimates.
The company’s third quarter ended February 28 and included the holiday season so the ground volume growth is noteworthy and parallels the double digit growth seen in e-commerce. However, weakness in air freight and express caused the company to report an adjusted earnings per share figure of $1.23 that was 15 cents below analysts’ consensus forecast.
"The third quarter was very challenging due to continued weakness in international air freight markets, pressure on yields due to industry overcapacity and customers selecting less expensive and slower-transit services," said FedEx chairman, president and CEO Fred Smith. "In response, beginning April 1, FedEx Express will decrease capacity to and from Asia and will aggressively manage traffic flows to place low yielding traffic in lower-cost networks. We are currently assessing how these actions may allow FedEx Express to retire more of its older, less-efficient aircraft. We remain focused on our strategic cost reduction programs, which are ramping up and on track."
Total company third quarter revenues increased 4% to $11 billion, but net income fell 31% to $361 million from $521 million. Looking ahead, FedEx projects fourth quarter earnings to be an adjusted $1.90 to $2.10 per share and adjusted full year profits of $6 to $6.20, excluding charges related to the company’s business realignment program that involves early retirement offers for thousands of employees.
"Our lower-than-expected results for the quarter and reduced full-year earnings outlook were driven by third quarter international revenues declining approximately $100 million versus our guidance primarily due to accelerating customer preference for lower-yielding international services, lower rate per pound and weight per shipment," said FedEx CFO Alan Graf Jr. "We expect these international revenue trends to continue. We have other actions under way beyond those already included in our profit improvement program. Some of these additional actions may involve temporarily or permanently grounding aircraft, which could result in asset impairment or other charges in future periods."
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General Mills sales advance slowly, innovation coming
Profits outpaced sales growth at General Mills during the third quarter ended February 24 and the company vowed to launch a promising slate of new products and increase store support during the current quarter.
Sales at the food giant increased 8% to a little more than $4.4 billion and adjusted earnings per share increased 16.4% to 64 cents, well ahead of the 57 cents analysts were expecting. Sales at the company’s U.S. retail segment increased 2% to $2.66 billion due to, "net price realization and mix." The company cut its advertising and media expense by 6% during the quarter and said the U.S. segment’s operating profit increased 13% to $577 million.
Products making the strongest contributions to U.S. Retail sales growth included new items such as Honey Nut Cheerios Medley Crunch cereal, Fiber One Protein bars, Yoplait Greek 100 yogurt and frozen Green Giant Seasoned Steamers vegetables. The company also singled out established brands such as Cheerios and Lucky Charms cereals, Progresso ready-to-serve soups, Nature Valley grain snack bars, Totino’s frozen snacks and pizzas, Betty Crocker SuperMoist cake and pouch cookie mixes, and Pillsbury Grands! refrigerated biscuits as contributing to retail sales growth..
"Our sales and volume growth reflects contributions from new businesses and from established products. Operating profit results for the quarter were particularly good, with double-digit increases for both our U.S. Retail and Bakeries and Foodservice segments," said Ken Powell, General Mill’s chairman and CEO.
To continue the momentum in its fourth quarter, the company plans to counteract expense headwinds with more new items launched into an operating environment it called slowly and steadily improving.
"Trends in our established businesses are improving, and integration of our new businesses is going smoothly," Powell said. "We’re preparing to launch a promising slate of new products as our new fiscal year begins this summer, and our plans for fiscal 2014 call for high single-digit (earnings per share) growth, consistent with our long-term model."
The company continues to forecast input cost inflation of approximately 3% and fourth quarter spending to support in-store merchandising also is expected to be above year-ago levels. That combination caused the company to forecast fourth quarter earnings below the prior year level.
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