First-quarter net sales for General Mills' consolidated international businesses grew 22 percent to reach $1.32 billion. Pound volume grew 30 percent, driven by new businesses. Price realization and mix subtracted 5 points of net sales growth, and foreign currency subtracted 3 points. On a constant-currency basis, International segment net sales rose 25 percent overall, led by growth in Latin America and Canada. Latin America net sales nearly tripled on a constant-currency basis including incremental contributions from Yoki, and constant-currency net sales in Canada rose 21 percent including the Yoplait business that transitioned to direct ownership in September 2012. Constant-currency net sales in the Asia / Pacific region grew 13 percent, and declined 3 percent in Europe. (Please see Note 8 below for reconciliation of this non-GAAP measure.) International segment operating profit of $126 million essentially matched strong year-ago levels despite input cost inflation, negative foreign currency effects, and a 15 percent increase in advertising and media expense.
Convenience Stores and Foodservice Segment Results
First-quarter net sales for the Convenience Stores and Foodservice segment totaled $468 million, 1 percent below year-ago results. Pound volume declined 3 percent, while net price realization and mix contributed 2 points of net sales growth. Baking mixes, cereal and frozen breakfast items led sales performance in the quarter. Segment operating profit grew 10 percent in the quarter to $74 million.
Joint Venture Summary
Combined after-tax earnings from the Cereal Partners Worldwide (CPW) and Haagen-Dazs Japan (HDJ) joint ventures totaled $24 million, up 4 percent from year-ago results. Constant-currency net sales for CPW grew 1 percent in the quarter, and constant-currency net sales for HDJ essentially matched strong prior-year levels.
Unallocated corporate items totaled $74 million of expense in this year's first quarter, compared to $21 million of income a year ago. Mark-to-market valuation of certain commodity positions represented a $1 million net increase in expense in the first quarter of 2014 compared to a $82 million net decrease in expense in last year's first quarter. Excluding these mark-to-market effects, unallocated corporate items totaled a net $73 million of expense this year compared to a net $61 million of expense a year ago.
Net interest expense of $79 million was 5 percent below year-ago levels, primarily due to changes in debt mix. The effective tax rate was 32.3 percent in this year's first quarter. Excluding mark-to-market effects in both 2014 and 2013, along with a discrete tax item recorded in the first quarter of 2013, the adjusted effective tax rate was 32.2 percent in this year's first quarter compared to 31.4 percent a year ago. (Please see Note 8 below for a reconciliation of this non-GAAP measure.)
Cash Flow Items
Cash provided by operating activities totaled $381 million in the first quarter. Capital investments in the period totaled $124 million. Dividends paid rose to $248 million, reflecting the 15 percent increase in the dividend rate year-over-year. During the first quarter, General Mills repurchased more than 6 million shares of common stock at an aggregate price of $327 million. Average diluted shares outstanding totaled 660 million for the first quarter of 2014, down 1 percent from year-ago levels.
Powell said, "We continue to be excited about our 2014 business plans, which call for sales and earnings growth consistent with our long-term model, along with strong cash returns to shareholders through dividend growth and share repurchase activity." The company reaffirmed its full-year fiscal 2014 guidance of low single-digit growth in net sales, mid single-digit growth in segment operating profit, and adjusted diluted EPS of $2.87 to $2.90.
General Mills will hold a briefing for investors today, Sept. 18, 2013, beginning at 8:30 a.m. Eastern time. You may access the web cast from General Mills' internet home page: generalmills.com.
Adjusted diluted EPS, total segment operating profit, international sales excluding foreign currency translation effects, and adjusted effective tax rate are each non-GAAP measures. Reconciliations of these measures to their relevant GAAP measures appear in Note 8 to the attached Consolidated Financial Statements.