Minneapolis / MN. (gm) General Mills Inc. reported results for its fiscal 2024 third quarter. «Our strategic focus on brand building, innovation, and in-store execution contributed to improved volume and market share trends in the third quarter,» said Chairman and Chief Executive Officer Jeff Harmening. «We continue to navigate today’s evolving operating environment while generating industry-leading levels of cost savings. And we remain committed to investing further in our brands and capabilities to drive profitable growth over the long term.»
General Mills is executing its Accelerate strategy to drive sustainable, profitable growth and top-tier shareholder returns over the long term. The strategy focuses on four pillars to create competitive advantages and win: boldly building brands, relentlessly innovating, unleashing scale, and standing for good. The company is prioritizing its core markets, global platforms, and local gem brands that have the best prospects for profitable growth and is committed to reshaping its portfolio with strategic acquisitions and divestitures to further enhance its growth profile.
Third Quarter Results Summary
- Net sales were down 1 percent to USD 5.1 billion, with lower pound volume partially offset by favorable net price realization and mix. Organic net sales were 1 percent below year-ago results that grew double digits; organic net sales were up 7 percent on a 2-year compound growth basis.
- Gross margin was up 100 basis points to 33.5 percent of net sales, driven by Holistic Margin Management (HMM) cost savings, favorable net price realization and mix, and favorable mark-to-market effects, partially offset by higher other supply chain costs, input cost inflation, and supply chain deleverage. Adjusted gross margin was up 20 basis points to 34.0 percent of net sales, driven primarily by HMM cost savings and favorable net price realization and mix, partially offset by higher other supply chain costs, input cost inflation, and supply chain deleverage.
- Operating profit of USD 911 million was up 25 percent, driven primarily by lower compensation and benefits expenses, higher gross profit dollars, and product recall recoveries. Operating profit margin of 17.9 percent was up 370 basis points. Adjusted operating profit of USD 914 million increased 14 percent in constant currency, driven primarily by lower compensation and benefits expenses. Adjusted operating profit margin was up 220 basis points to 17.9 percent.
- Net earnings attributable to General Mills of USD 670 million were up 21 percent. Diluted EPS was up 27 percent to USD 1.17, driven primarily by higher operating profit and lower net shares outstanding, partially offset by higher net interest expense and a higher effective tax rate. Adjusted diluted EPS of USD 1.17 was up 22 percent in constant currency, driven primarily by higher adjusted operating profit, lower net shares outstanding, and a lower adjusted effective tax rate, partially offset by higher net interest expense.
Nine Month Results Summary
- Net sales increased 1 percent to USD 15.1 billion, with favorable net price realization and mix partially offset by lower pound volume. Organic net sales were 1 percent above year-ago results that grew double digits; organic net sales were up 6 percent on a 2-year compound growth basis.
- Gross margin was up 260 basis points to 34.6 percent of net sales, driven primarily by favorable net price realization and mix, HMM cost savings, and favorable mark-to-market effects, partially offset by input cost inflation, higher other supply chain costs, and supply chain deleverage. Adjusted gross margin was up 90 basis points to 34.8 percent of net sales, driven by favorable net price realization and mix and HMM cost savings, partially offset by input cost inflation, higher other supply chain costs, and supply chain deleverage.
- Operating profit of USD 2.65 billion was up 1 percent, driven primarily by higher gross profit dollars, lower compensation and benefits expenses, and favorable net corporate investment activity, partially offset by net gains on divestitures in the prior year and a goodwill impairment charge. Operating profit margin of 17.5 percent was up 10 basis points. Adjusted operating profit of USD 2.8 billion increased 9 percent in constant currency, driven by higher adjusted gross profit dollars and lower compensation and benefits expenses, partially offset by higher media and other consumer expenses. Adjusted operating profit margin was up 150 basis points to 18.5 percent.
- Net earnings attributable to General Mills were down 2 percent to USD 1.9 billion. Diluted EPS was up 2 percent to USD 3.33, driven primarily by lower net shares outstanding and higher operating profit, partially offset by higher net interest expense. Adjusted diluted EPS of USD 3.51 was up 11 percent in constant currency, driven primarily by higher adjusted operating profit, lower net shares outstanding, and a lower adjusted effective tax rate, partially offset by higher net interest expense.
Notes on Comparability
The following transactions impacted the comparability of year-to-date financial results between fiscal 2023 and fiscal 2024: the acquisition of the TNT Crust foodservice business in the first quarter of fiscal 2023 and the divestiture of the Helper main meals and Suddenly Salad side dishes business in the first quarter of fiscal 2023. In addition, results in fiscal 2023 included the impact of a voluntary recall on certain international Häagen-Dazs ice cream products, which was a headwind to net sales and operating profit results in the International segment.
For additional information please read the company’s PDF file below (183 KB):
20240320-GENERALMILLS-Q32024.