Minneapolis / MN. (gm) General Mills Inc. reported results for the first quarter ended August 30, 2020. «We continued to drive exceptional results this quarter, highlighted by broad-based market share gains amid elevated at-home food demand due to the Covid-19 pandemic,» said Chairman and Chief Executive Officer Jeff Harmening. «The fundamentals of our business are strong. We’re investing in our brands, executing with speed and agility, and maintaining our focus on the health and safety of our employees and our consumers. And, importantly, we’re resuming dividend growth sooner than initially planned. I’m more confident than ever that General Mills is poised to emerge from the pandemic a stronger company and in a position to generate consistent, profitable growth and top-tier returns for our shareholders.»
First Quarter Results Summary
- Net sales increased 9 percent to USD 4.4 billion and organic net sales were up 10 percent, reflecting increased pound volume due to elevated at-home food demand resulting from the Covid-19 pandemic, as well as positive net price realization and mix.
- Gross margin increased 170 basis points to 36.4 percent of net sales and adjusted gross margin increased 100 basis points to 36.2 percent of net sales, driven by the benefit of fixed cost leverage in the supply chain, partially offset by Covid-related costs, including costs related to health and safety and costs to secure incremental capacity.
- Operating profit of USD 854 million was up 29 percent, primarily driven by higher net sales, higher gross margin as a percent of net sales, and lower mark-to-market and restructuring charges, partially offset by higher selling, general, and administrative (SG+A) expenses, including higher media investment. Operating profit margin of 19.6 percent increased 310 basis points. Constant-currency adjusted operating profit increased 22 percent, driven by higher net sales and higher adjusted gross margin as a percent of net sales, partially offset by higher SG+A expenses. Adjusted operating profit margin increased 210 basis points to 19.1 percent.
- Net earnings attributable to General Mills increased 23 percent to USD 639 million and diluted EPS increased 21 percent to USD 1.03, primarily reflecting higher operating profit and higher after-tax earnings from joint ventures, partially offset by a higher effective tax rate and higher average diluted shares outstanding. Adjusted diluted EPS totaled USD 1.00, up 27 percent in constant currency, primarily driven by higher adjusted operating profit and higher after-tax earnings from joint ventures, partially offset by a higher adjusted effective tax rate and higher average diluted shares outstanding.
For additional information please read General Mills’ PDF file below (160 KB).20200923-GENERALMILLS-Q1-2021