General Mills: Reports Fiscal Q1-2022 Results

Minneapolis / MN. (gm) General Mills Inc. reported results for the first quarter ended August 29, 2021. «I’m proud of the way our team is performing in a dynamic and challenging operating environment,» said General Mills Chairman and Chief Executive Officer Jeff Harmening. «Our strong execution in the first quarter enabled us to deliver top- and bottom-line results ahead of our expectations. We delivered these good results while continuing to advance our Accelerate strategy, including making important progress on portfolio reshaping in the quarter.»

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 being a force 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, including the acquisition of Tyson Foods’ pet treats business and the planned divestiture of its European Yoplait operations, to further enhance its growth profile.

General Mills expects changes in consumer behaviours driven by the COVID-19 pandemic will result in ongoing elevated consumer demand for food at home, relative to pre-pandemic levels. These changes include more time spent working from home and increased consumer appreciation for cooking and baking. In addition, an increase in the pet population and further humanization and premiumization of pet food during the pandemic are expected to create tailwinds for the pet food category. The company plans to capitalize on these opportunities, addressing evolving consumer needs through its leading brands, innovation, and advantaged capabilities to generate profitable growth.

First Quarter Results Summary

  • Net sales increased 4 percent to USD 4.5 billion, including 1 point of favourable foreign currency exchange. Organic net sales increased 2 percent, including contributions from positive organic net price realization and mix and higher organic pound volume.
  • Gross margin was down 120 basis points to 35.2 percent of net sales, primarily driven by higher input costs, partially offset by favourable net price realization and mix and mark-to-market effects. Adjusted gross margin was down 150 basis points to 34.7 percent of net sales, driven by input cost inflation, higher other supply chain costs, and fixed cost deleverage in the supply chain, partially offset by Holistic Margin Management (HMM) cost savings and favourable net price realization and mix.
  • Operating profit of USD 844 million was down 1 percent, primarily driven by the comparison to net gains on certain corporate investments in the prior year, partially offset by higher gross profit dollars. Operating profit margin of 18.6 percent was down 100 basis points. Constant-currency adjusted operating profit declined 2 percent, driven by lower adjusted gross profit dollars, partially offset by lower administrative expenses. Adjusted operating profit margin decreased 110 basis points to 18.0 percent.
  • Net earnings attributable to General Mills was down 2 percent to USD 627 million and diluted EPS was down 1 percent to USD 1.02, primarily reflecting lower operating profit. Adjusted diluted EPS of USD 0.99 was down 2 percent in constant currency, primarily driven by lower adjusted operating profit.

For additional information please read General Mills’ PDF file below (166 KB).