General Mills: Reports Q4 and FY Results for Fiscal 2022

Minneapolis / MN. (gm) General Mills Inc. reported results for the fourth quarter and fiscal year ended May 29, 2022. «Fiscal 2022 was another successful year for General Mills, marking the fourth consecutive year that we’ve delivered results that met or exceeded our targets for top and bottom-line growth and cash generation,» said General Mills Chairman and Chief Executive Officer Jeff Harmening. «I am proud of the way our team advanced our Accelerate strategy this year by executing well on our core business while taking significant steps to reshape our portfolio. Though significant inflation and supply chain disruptions put pressure on our margins, we responded quickly to address those challenges and keep our brands on shelf for our customers and consumers.

«We plan to build on our strong momentum in fiscal 2023 by continuing to compete effectively, investing in our brands and capabilities, and reshaping our portfolio. Importantly, our board reinforced its confidence in our performance and outlook by approving a six percent increase in our dividend, underlining our commitment to driving strong returns for General Mills shareholders 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 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 seven transactions announced or completed in fiscal 2022, to further enhance its growth profile.

Fourth Quarter Results Summary

  • Net sales increased 8 percent to USD 4.9 billion, including a 4-point net headwind from divestiture and acquisition activity and one point of unfavorable foreign currency exchange. Organic net sales increased 13 percent. Organic net price realization and mix added 14 points to organic net sales growth, driven by Strategic Revenue Management (SRM) actions put in place in response to significant input cost inflation including a 2-point benefit from index pricing on bakery flour in the North America Foodservice segment. Lower organic pound volume was a 2-point headwind to organic net sales growth.
  • Gross margin was up 120 basis points to 36.2 percent of net sales, driven by favorable net price realization and mix and mark-to-market effects, partially offset by higher input costs. Adjusted gross margin was down 70 basis points to 33.8 percent of net sales, driven by double-digit input cost inflation, higher other cost of goods sold, and supply chain deleverage, partially offset by favorable net price realization and mix and Holistic Margin Management (HMM) cost savings.
  • Operating profit of USD 1.0 billion was up 85 percent, driven primarily by higher gross profit dollars, lower restructuring charges, and divestiture gains, partially offset by unfavorable net investment activity. Operating profit margin of 20.8 percent was up 870 basis points. Constant-currency adjusted operating profit increased 21 percent, driven by higher adjusted gross profit dollars and lower adjusted selling, general, and administrative (SG+A) expenses. Adjusted operating profit margin increased 200 basis points to 18.3 percent.
  • Net earnings attributable to General Mills were up 97 percent to USD 823 million and diluted EPS was up 98 percent to USD 1.35, driven primarily by higher operating profit and lower average diluted shares outstanding. Adjusted diluted EPS of USD 1.12 increased 23 percent in constant currency, driven primarily by higher adjusted operating profit and lower average diluted shares outstanding.

Full Year Results Summary

  • Net sales increased 5 percent to USD 19.0 billion, including a 1-point net headwind from divestiture and acquisition activity. Organic net sales increased 6 percent. Organic net price realization and mix added 7 points to organic net sales growth, driven by SRM actions put in place in response to significant input cost inflation including a 1-point benefit from index pricing on bakery flour in the North America Foodservice segment. Lower organic pound volume was a 1-point headwind to organic net sales growth.
  • Gross margin was down 190 basis points to 33.7 percent of net sales, driven by higher input costs, partially offset by favorable net price realization and mix. Adjusted gross margin was down 180 basis points to 33.0 percent of net sales, driven by 8 percent annual input cost inflation, higher other cost of goods sold, and supply chain deleverage, partially offset by favorable net price realization and mix and HMM cost savings.
  • Operating profit of USD 3.5 billion was up 11 percent, driven primarily by gains on divestitures and lower restructuring charges, partially offset by unfavorable net investment activity. Operating profit margin of 18.3 percent was up 100 basis points. Constant-currency adjusted operating profit increased 2 percent, driven by lower adjusted SG+A expenses. Adjusted operating profit margin decreased 50 basis points to 16.9 percent.
  • Net earnings attributable to General Mills were up 16 percent to USD 2.7 billion and diluted EPS was up 17 percent to USD 4.42, primarily reflecting higher operating profit, a lower effective tax rate, and lower average diluted shares outstanding. Adjusted diluted EPS of USD 3.94 was up 4 percent in constant currency, driven primarily by higher adjusted operating profit, lower net interest expense, and lower average diluted shares outstanding, partially offset by lower non-service benefit plan income.

For additional information please read the company’s PDF file below (190 KB):

20220630-GENERALMILLS-Q4-2022
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