General Mills Sees Foodservice Sector Services Remaining Weak

General Mills Inc.'s (GIS) margins will expand in its fiscal fourth quarter as commodity prices decline, Chief Executive Ken Powell told investors at a consumer conference in Florida.

The company said its retail sales will continue to get a bump up from consumer eating at home more. To that end the cereal maker is pushing brands like its Savorings appetizers, and Grands cinnamon rolls. The company is also seeing sales grow for cereal brands like Cheerios and easy to prepare products like Hamburger Helper. Although prices for crude and many other commodities have declined, consumer manufacturers are yet to report a major benefit from that pullback as these large companies had hedges in place and have been waiting for some of these positions to roll off. The company is "on track for another good year in 2009," Powell said, speaking at the Consumer Analyst Group of New York conference, pointing to the consumer shift to eating at home. For the fiscal year that ends May the company expects earnings of $3.83 to $3.87 a share, excluding items. Still, foodservice continues to remain a weak spot for the company, which doesn't expect that part of its business to grow profits for the fiscal year. The company said third quarter margins will be below year ago levels. -Anjali Cordeiro; Dow Jones Newswires; 201-938-2408; [e-mail]