General Mills Board of Directors Declares
Dividend Increase
Full Year
Highlights
- Net sales of $19.9 billion decreased 1 percent from the
prior year; organic net sales1 were 1 percent below year-ago
results that grew double digits
- Operating profit of $3.4 billion essentially matched
year-ago results; adjusted operating profit of $3.6 billion was up
4 percent in constant currency
- Diluted earnings per share (EPS) of $4.31 essentially
matched year-ago results; adjusted diluted EPS of $4.52 was up 6
percent in constant currency
Fourth Quarter
Highlights
- Net sales of $4.7 billion decreased 6 percent; organic net
sales were also down 6 percent
- Operating profit of $779 million was down 5 percent;
adjusted operating profit of $800 million was down 10 percent in
constant currency
- Diluted EPS of $0.98 was down 5 percent; adjusted diluted
EPS of $1.01 was down 10 percent in constant currency
¹ Please see Note 7 to the Consolidated Financial Statements
below for reconciliation of this and other non-GAAP measures used
in this release.
General Mills, Inc. (NYSE: GIS) today reported results for the
fourth quarter and fiscal year ended May 26, 2024.
“We delivered on our updated guidance in fiscal 2024 by pivoting
our plans and enhancing our efficiency in response to a more
challenging operating environment,” said General Mills Chairman and
Chief Executive Officer Jeff Harmening. “We drove improved volume
performance in the second half of the year and generated
industry-leading levels of Holistic Margin Management cost savings,
allowing us to protect our brand investment while still delivering
on our profit and cash commitments.
“As we move into fiscal 2025, our top priority is to accelerate
our organic net sales growth, and specifically our volume growth,
by delivering remarkable experiences across our portfolio of
leading brands,” Harmening continued. “We plan to drive another
year of strong HMM cost savings, allowing us to reinvest in
exciting growth ideas that meet evolving consumer needs. I want to
thank our entire General Mills team for their resilience and
engagement in fiscal 2024, and I’m confident we’re ready to
capitalize on new opportunities, advance our Accelerate strategy,
and deliver for our consumers and our shareholders in the year
ahead.”
Guided by its purpose to make food the world loves, 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.
Fourth Quarter Results
Summary
- Net sales were down 6 percent to $4.7 billion,
reflecting unfavorable net price realization and mix and lower
pound volume. Results included a 3-point headwind from a comparison
against favorable trade expense timing in the prior year, which
impacted net price realization and mix. Organic net sales were down
6 percent and slowed from the third-quarter trend, driven by the
trade expense timing comparison, a reduction in retailer inventory,
and a headwind in International segment results. Aggregate
in-market retail sales trends were more consistent between the
third and fourth quarters.
- Gross margin increased 140 basis points to 35.8 percent
of net sales, driven by Holistic Margin Management (HMM) cost
savings, favorable mark-to-market effects, and lower other supply
chain costs, partially offset by input cost inflation, unfavorable
net price realization and mix, and supply chain deleverage.
Adjusted gross margin was down 10 basis points to 34.9 percent of
net sales.
- Operating profit of $779 million was down 5 percent,
driven primarily by intangible asset impairments and lower gross
profit dollars, partially offset by lower selling, general, and
administrative (SG&A) expenses and lower restructuring charges.
Operating profit margin of 16.5 percent was up 20 basis
points. Adjusted operating profit of $800 million was down 10
percent in constant currency, driven primarily by lower adjusted
gross profit dollars, partially offset by lower SG&A expenses.
Adjusted operating profit margin was down 70 basis points to 17.0
percent.
- Net earnings attributable to General Mills of $558
million were down 9 percent. Diluted EPS was down 5 percent
to $0.98, driven primarily by lower operating profit, higher net
interest expense, and a higher effective tax rate, partially offset
by lower net shares outstanding. Adjusted diluted EPS of $1.01 was
down 10 percent in constant currency, driven primarily by lower
adjusted operating profit, higher net interest expense, and a
higher adjusted effective tax rate, partially offset by lower net
shares outstanding.
Full Year Results
Summary
- Net sales were down 1 percent to $19.9 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
4 percent on a 2-year compound growth basis.
- Gross margin was up 230 basis points to 34.9 percent of
net sales, driven by HMM cost savings, favorable mark-to-market
effects, and favorable net price realization and mix, partially
offset by input cost inflation, higher other supply chain costs,
and supply chain deleverage. Adjusted gross margin was up 60 basis
points to 34.8 percent of net sales, driven by HMM cost savings and
favorable net price realization and mix, partially offset by input
cost inflation, higher other supply chain costs, and supply chain
deleverage.
- Operating profit of $3.4 billion essentially matched
year-ago results, with net gains on divestitures in the prior year
and intangible asset impairment charges offset by higher gross
profit dollars and lower compensation and benefits expenses.
Operating profit margin of 17.3 percent was up 20 basis
points. Adjusted operating profit of $3.6 billion increased 4
percent in constant currency, driven by lower compensation and
benefits expenses and higher adjusted gross profit dollars,
partially offset by higher media expenses. Adjusted operating
profit margin was up 90 basis points to 18.1 percent.
- Net earnings attributable to General Mills were down 4
percent to $2.5 billion. Diluted EPS of $4.31 essentially
matched year-ago results, with lower net shares outstanding offset
by higher net interest expense and lower benefit plan non-service
income. Adjusted diluted EPS of $4.52 was up 6 percent in constant
currency, driven primarily by higher adjusted operating profit and
lower net shares outstanding, partially offset by higher net
interest expense and lower benefit plan non-service income.
Operating Segment Results
Note: Tables may not foot due to
rounding.
Components of Fiscal 2024
Reported Net Sales Growth
Fourth Quarter
Volume
Price/Mix
Foreign Exchange
Reported Net Sales
North America Retail
(6) pts
(1) pt
--
(7)%
Pet
(7) pts
(1) pt
--
(8)%
North America Foodservice
3 pts
1 pt
--
4%
International
1 pt
(10) pts
(1) pt
(10)%
Total
(2) pts
(4) pts
--
(6)%
Full Year
North America Retail
(5) pts
3 pts
--
(1)%
Pet
(7) pts
3 pts
--
(4)%
North America Foodservice
2 pts
1 pt
--
3%
International
(3) pts
1 pt
1 pt
(1)%
Total
(3) pts
2 pts
--
(1)%
Components of Fiscal 2024
Organic Net Sales Growth
Fourth Quarter
Organic Volume
Organic Price/Mix
Organic Net Sales
Foreign Exchange
Acquisitions &
Divestitures
Reported Net Sales
North America Retail
(6) pts
(1) pt
(7)%
--
--
(7)%
Pet
(7) pts
(1) pt
(8)%
--
--
(8)%
North America Foodservice
3 pts
1 pt
4%
--
--
4%
International
1 pt
(10) pts
(10)%
(1) pt
--
(10)%
Total
(2) pts
(4) pts
(6)%
--
--
(6)%
Full Year
North America Retail
(4) pts
3 pts
(1)%
--
--
(1)%
Pet
(7) pts
3 pts
(4)%
--
--
(4)%
North America Foodservice
2 pts
1 pt
2%
--
1 pt
3%
International
(3) pts
1 pt
(2)%
1 pt
--
(1)%
Total
(3) pts
2 pts
(1)%
--
--
(1)%
Fiscal 2024 Segment Operating
Profit Growth
Fourth Quarter
% Change as Reported
% Change in Constant
Currency
North America Retail
(14)%
(14)%
Pet
8%
8%
North America Foodservice
9%
9%
International
(66)%
(68)%
Total
(13)%
(13)%
Full Year
North America Retail
(3)%
(3)%
Pet
9%
9%
North America Foodservice
9%
9%
International
(23)%
(20)%
Total
(2)%
(2)%
Notes on Comparability
The following transactions impacted the comparability of
full-year operating segment 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.
North America Retail Segment
Fourth-quarter net sales for General Mills’ North America Retail
segment were down 7 percent to $2.85 billion, driven by lower pound
volume and unfavorable net price realization and mix. Organic net
sales were also down 7 percent. Net sales results in the quarter
lagged comparable Nielsen-measured retail sales by approximately 4
points, reflecting the headwind from the comparison against
favorable trade expense timing in the prior year. Segment operating
profit of $670 million was down 14 percent as reported and in
constant currency, driven primarily by lower volume and unfavorable
net price realization and mix.
For the full year, North America Retail segment net sales were
down 1 percent to $12.5 billion. Organic net sales were 1 percent
below year-ago results that grew double digits; organic net sales
were up 5 percent on a 2-year compound growth basis. Net sales were
down low-single digits for the U.S. Meals & Baking Solutions,
U.S. Snacks, and U.S. Morning Foods operating units, and were up
mid-single digits for Canada. Segment operating profit of $3.1
billion was down 3 percent as reported and in constant currency,
driven primarily by higher input costs, lower volume, and higher
SG&A expenses, partially offset by favorable net price
realization and mix.
Pet Segment
Fourth-quarter net sales for the Pet segment were down 8 percent
to $602 million, driven by lower pound volume and unfavorable net
price realization and mix. Organic net sales were also down 8
percent. Net sales results in the quarter lagged all-channel retail
sales by approximately 4 points, reflecting the headwind from the
comparison against favorable trade expense timing in the prior year
as well as a decline in retailer inventory. Segment operating
profit was up 8 percent to $144 million, driven primarily by HMM
cost savings, partially offset by higher other supply chain
costs.
For the full year, Pet segment net sales were down 4 percent to
$2.4 billion. Organic net sales were 4 percent below year-ago
results that grew high-single digits; organic net sales were up 2
percent on a 2-year compound growth basis. Full-year net sales
results included a low-single digit decline on dry pet food, a
high-single digit decline on wet pet food, and a mid-single digit
decline on treats. Segment operating profit increased 9 percent to
$486 million, driven primarily by HMM cost savings and favorable
net price realization and mix, partially offset by lower volume,
higher other supply chain costs, and higher SG&A expenses.
North America Foodservice
Segment
Fourth-quarter net sales for the North America Foodservice
segment increased 4 percent to $589 million. Organic net sales were
also up 4 percent despite a 3-point headwind from market index
pricing on bakery flour. Net sales performance was led by strong
growth on breads, cereal, and frozen biscuits, partially offset by
a decline on bakery flour. Segment operating profit was up 9
percent to $79 million, driven primarily by favorable net price
realization and mix and higher volume, partially offset by higher
input costs.
For the full year, North America Foodservice net sales increased
3 percent to $2.26 billion, including a 1-point benefit from the
TNT Crust acquisition. Organic net sales were up 2 percent. Segment
operating profit was up 9 percent to $316 million, driven primarily
by favorable net price realization and mix, partially offset by
higher input costs.
International Segment
Fourth-quarter net sales for the International segment were down
10 percent to $668 million, driven by unfavorable net price
realization and mix and a 1-point headwind from foreign currency
exchange, partially offset by higher pound volume. Organic net
sales were also down 10 percent, with double-digit declines in
Brazil and China partially offset by growth in Distributor markets
and Europe & Australia. Segment operating profit totaled $22
million compared to $67 million a year ago, driven primarily by
unfavorable net price realization and mix and input cost inflation,
partially offset by HMM cost savings and lower other supply chain
costs.
For the full year, International net sales were down 1 percent
to $2.7 billion, including a 1-point benefit from foreign currency
exchange. Organic net sales were down 2 percent. Segment operating
profit of $125 million was down 23 percent as reported and down 20
percent in constant currency from year-ago results that included
the impact of the ice cream recall, driven primarily by higher
input costs and lower volume, partially offset by favorable net
price realization and mix.
Joint Venture Summary
Fourth-quarter constant-currency net sales increased 2 percent
for Cereal Partners Worldwide (CPW) and were down 3 percent for
Häagen-Dazs Japan (HDJ). For the full year, constant-currency net
sales increased 8 percent for CPW and were up 1 percent for HDJ.
Combined after-tax earnings from joint ventures were down 18
percent to $19 million in the fourth quarter. For the full year,
after-tax earnings from joint ventures increased 4 percent to $85
million.
Other Income Statement
Items
Full-year unallocated corporate items totaled $334 million net
expense in fiscal 2024 compared to $1,033 million net expense a
year ago. Excluding mark-to-market valuation effects and other
items affecting comparability, unallocated corporate items totaled
$404 million net expense this year compared to $621 million net
expense last year, driven primarily by lower compensation and
benefits expenses and lower corporate charitable contributions.
The company did not undertake any divestitures in fiscal 2024
compared to a net $445 million gain on divestitures a year ago
(please see Note 2 below for more information on these items).
Restructuring, impairment, and other exit costs totaled $241
million in fiscal 2024 compared to $56 million a year ago (please
see Note 3 below for more information on these charges). Benefit
plan non-service income totaled $76 million in fiscal 2024 compared
to $89 million a year ago, driven by an increase in interest costs,
partially offset by lower amortization of losses.
Net interest expense in fiscal 2024 totaled $479 million
compared to $382 million a year ago, driven primarily by higher
interest rates and higher average long-term debt balances. The
effective tax rate for fiscal 2024 was 19.6 percent compared to
19.5 percent last year (please see Note 6 below for more
information on our effective tax rate). The adjusted effective tax
rate was 20.1 percent compared to 20.4 percent a year ago.
Cash Flow Generation and Cash
Returns
Cash provided by operating activities totaled $3.3 billion in
fiscal 2024 compared to $2.8 billion a year ago, driven primarily
by higher net earnings excluding the net divestitures gain in
fiscal 2023 and the change in restructuring, impairment, and other
exit costs. Capital investments totaled $774 million compared to
$690 million a year ago. Full-year operating cash flow conversion
was 131 percent of after-tax earnings and free cash flow conversion
was 96 percent of adjusted after-tax earnings. Dividends paid
increased 6 percent to $1.4 billion. General Mills repurchased
approximately 29 million shares of common stock in fiscal 2024 for
a total of $2.0 billion compared to $1.4 billion in share
repurchases a year ago. Average diluted shares outstanding
decreased 4 percent to 580 million.
Dividend Increase
The General Mills board of directors declared a quarterly
dividend of $0.60 per share, payable August 1, 2024, to
shareholders of record July 10, 2024. This represents a 2 percent
increase from the previous quarterly rate of $0.59 per share.
General Mills and its predecessor company have paid dividends
without interruption for 125 years.
Fiscal 2025 Outlook
Amid a continued uncertain macroeconomic backdrop for consumers
across its core markets, General Mills expects volume trends in its
categories will gradually improve in fiscal 2025, though full-year
category dollar growth is expected to be below the company’s
long-term growth projections. The company expects to accelerate its
organic net sales growth by delivering remarkable experiences
across its leading food brands, resulting in improved household
penetration and stronger market share trends versus the prior year.
Its fiscal 2025 plans call for product news and innovation focused
on taste, health, convenience, and value, supported with strong
brand campaigns and omnichannel visibility. The company expects to
generate HMM cost savings of roughly 4 to 5 percent of cost of
goods sold, which is expected to exceed its anticipated input cost
inflation of 3 to 4 percent of cost of goods sold. Additionally, it
expects to reinvest potential margin flexibility back into the
business, including plans for a significant increase in
brand-building investment in fiscal 2025 to drive improved volume
performance.
With these assumptions in mind, General Mills outlined its
full-year financial targets for fiscal 2025²:
- Organic net sales are expected to range between flat and
up 1 percent.
- Adjusted operating profit is expected to range between
down 2 percent and flat in constant currency from the base of $3.6
billion reported in fiscal 2024, including a 2-point headwind from
resetting incentive compensation after a below-average payout in
the prior year.
- Adjusted diluted EPS is expected to range between down 1
percent and up 1 percent in constant currency from the base of
$4.52 earned in fiscal 2024.
- Free cash flow conversion is expected to be at least 95
percent of adjusted after-tax earnings.
² Financial targets are provided on a non-GAAP basis because
certain information necessary to calculate comparable GAAP measures
is not available. Please see Note 7 to the Consolidated Financial
Statements below for discussion of the unavailable information.
General Mills will issue pre-recorded management remarks today,
June 26, 2024, at approximately 6:30 a.m. Central time (7:30 a.m.
Eastern time) and will hold a live, webcasted question and answer
session beginning at 8:00 a.m. Central time (9:00 a.m. Eastern
time). The pre-recorded remarks and the webcast will be made
available at www.generalmills.com/investors.
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995
that are based on our current expectations and assumptions. These
forward-looking statements, including the statements under the
caption “Fiscal 2025 Outlook,” and statements made by Mr.
Harmening, are subject to certain risks and uncertainties that
could cause actual results to differ materially from the potential
results discussed in the forward-looking statements. In particular,
our predictions about future net sales and earnings could be
affected by a variety of factors, including: disruptions or
inefficiencies in the supply chain; competitive dynamics in the
consumer foods industry and the markets for our products, including
new product introductions, advertising activities, pricing actions,
and promotional activities of our competitors; economic conditions,
including changes in inflation rates, interest rates, tax rates, or
the availability of capital; product development and innovation;
consumer acceptance of new products and product improvements;
consumer reaction to pricing actions and changes in promotion
levels; acquisitions or dispositions of businesses or assets;
changes in capital structure; changes in the legal and regulatory
environment, including tax legislation, labeling and advertising
regulations, and litigation; impairments in the carrying value of
goodwill, other intangible assets, or other long-lived assets, or
changes in the useful lives of other intangible assets; changes in
accounting standards and the impact of critical accounting
estimates; product quality and safety issues, including recalls and
product liability; changes in consumer demand for our products;
effectiveness of advertising, marketing, and promotional programs;
changes in consumer behavior, trends, and preferences, including
weight loss trends; consumer perception of health-related issues,
including obesity; consolidation in the retail environment; changes
in purchasing and inventory levels of significant customers;
fluctuations in the cost and availability of supply chain
resources, including raw materials, packaging, energy, and
transportation; effectiveness of restructuring and cost saving
initiatives; volatility in the market value of derivatives used to
manage price risk for certain commodities; benefit plan expenses
due to changes in plan asset values and discount rates used to
determine plan liabilities; failure or breach of our information
technology systems; foreign economic conditions, including currency
rate fluctuations; and political unrest in foreign markets and
economic uncertainty due to terrorism or war. The company
undertakes no obligation to publicly revise any forward-looking
statement to reflect any future events or circumstances.
# # #
Consolidated Statements of
Earnings and Supplementary Information
GENERAL MILLS, INC. AND
SUBSIDIARIES
(In Millions, Except per Share
Data)
Fiscal Year
2024
% Change
2023
% Change
2022
(Unaudited)
Net sales
$
19,857.2
(1
%)
$
20,094.2
6
%
$
18,992.8
Cost of sales
12,925.1
(5
%)
13,548.4
8
%
12,590.6
Selling, general, and administrative
expenses
3,259.0
(7
%)
3,500.4
11
%
3,147.0
Divestitures gain, net
-
NM
(444.6
)
129
%
(194.1
)
Restructuring, impairment, and other exit
costs (recoveries)
241.4
NM
56.2
NM
(26.5
)
Operating profit
3,431.7
Flat
3,433.8
(1
%)
3,475.8
Benefit plan non-service income
(75.8
)
(15
%)
(88.8
)
(22
%)
(113.4
)
Interest, net
479.2
25
%
382.1
1
%
379.6
Earnings before income taxes and after-tax
earnings
from joint ventures
3,028.3
(4
%)
3,140.5
(2
%)
3,209.6
Income taxes
594.5
(3
%)
612.2
4
%
586.3
After-tax earnings from joint ventures
84.8
4
%
81.3
(27
%)
111.7
Net earnings, including earnings
attributable to redeemable and
noncontrolling interests
2,518.6
(3
%)
2,609.6
(5
%)
2,735.0
Net earnings attributable to
redeemable
and noncontrolling interests
22.0
40
%
15.7
(43
%)
27.7
Net earnings attributable to General
Mills
$
2,496.6
(4
%)
$
2,593.9
(4
%)
$
2,707.3
Earnings per share — basic
$
4.34
Flat
$
4.36
(2
%)
$
4.46
Earnings per share — diluted
$
4.31
Flat
$
4.31
(2
%)
$
4.42
Dividends per share
$
2.36
9
%
$
2.16
6
%
$
2.04
Fiscal Year
Comparisons as a % of net sales:
2024
Basis Pt Change
2023
Basis Pt Change
2022
Gross margin
34.9
%
230
32.6
%
(110
)
33.7
%
Selling, general, and administrative
expenses
16.4
%
(100
)
17.4
%
80
16.6
%
Operating profit
17.3
%
20
17.1
%
(120
)
18.3
%
Net earnings attributable to General
Mills
12.6
%
(30
)
12.9
%
(140
)
14.3
%
Fiscal Year
Adjusted comparisons as a % of net sales
(a):
2024
Basis Pt Change
2023
Basis Pt Change
2022
Adjusted gross margin
34.8
%
60
34.2
%
120
33.0
%
Adjusted operating profit
18.1
%
90
17.2
%
30
16.9
%
Adjusted net earnings attributable to
General Mills
13.2
%
30
12.9
%
20
12.7
%
(a) See Note 7 for a reconciliation of
these measures not defined by generally accepted accounting
principles (GAAP).
See accompanying notes to consolidated
financial statements.
Consolidated Statements of
Earnings and Supplementary Information
GENERAL MILLS, INC. AND
SUBSIDIARIES
(Unaudited) (In Millions, Except
per Share Data)
Quarter Ended
May 26, 2024
May 28, 2023
% Change
Net sales
$
4,713.9
$
5,030.0
(6
%)
Cost of sales
3,025.6
3,301.8
(8
%)
Selling, general, and administrative
expenses
798.3
867.9
(8
%)
Restructuring, impairment, and other exit
costs
110.8
42.1
NM
Operating profit
779.2
818.2
(5
%)
Benefit plan non-service income
(20.1
)
(23.8
)
(16
%)
Interest, net
122.7
104.6
17
%
Earnings before income taxes and after-tax
earnings from joint ventures
676.6
737.4
(8
%)
Income taxes
136.0
140.7
(3
%)
After-tax earnings from joint ventures
19.1
23.4
(18
%)
Net earnings, including earnings
attributable to noncontrolling interests
559.7
620.1
(10
%)
Net earnings attributable to
noncontrolling interests
2.2
5.2
(58
%)
Net earnings attributable to General
Mills
$
557.5
$
614.9
(9
%)
Earnings per share — basic
$
0.98
$
1.04
(6
%)
Earnings per share — diluted
$
0.98
$
1.03
(5
%)
Quarter Ended
Comparisons as a % of net sales:
May 26, 2024
May 28, 2023
Basis Pt Change
Gross margin
35.8
%
34.4
%
140
Selling, general, and administrative
expenses
16.9
%
17.3
%
(40
)
Operating profit
16.5
%
16.3
%
20
Net earnings attributable to General
Mills
11.8
%
12.2
%
(40
)
Quarter Ended
Adjusted comparisons as a % of net sales
(a):
May 26, 2024
May 28, 2023
Basis Pt Change
Adjusted gross margin
34.9
%
35.0
%
(10
)
Adjusted operating profit
17.0
%
17.7
%
(70
)
Adjusted net earnings attributable to
General Mills
12.2
%
13.4
%
(120
)
(a) See Note 7 for a reconciliation of
these measures not defined by generally accepted accounting
principles (GAAP)
See accompanying notes to consolidated
financial statements.
Operating Segment Results and
Supplementary Information
GENERAL MILLS, INC. AND
SUBSIDIARIES
(In Millions)
Fiscal Year
2024
% Change
2023
% Change
2022
(Unaudited)
Net sales:
North America Retail
$
12,473.4
(1
%)
$
12,659.9
9
%
$
11,572.0
International
2,746.5
(1
%)
2,769.5
(16
%)
3,315.7
Pet
2,375.8
(4
%)
2,473.3
9
%
2,259.4
North America Foodservice
2,258.7
3
%
2,191.5
19
%
1,845.7
Total segment sales
19,854.4
(1
%)
20,094.2
6
%
18,992.8
Corporate and other
2.8
NM
-
NM
-
Total net sales
$
19,857.2
(1
%)
$
20,094.2
6
%
$
18,992.8
Operating profit:
North America Retail
$
3,080.4
(3
%)
$
3,181.3
18
%
$
2,699.7
International
125.2
(23
%)
161.8
(30
%)
232.0
Pet
485.9
9
%
445.5
(5
%)
470.6
North America Foodservice
315.5
9
%
290.0
14
%
255.5
Total segment operating profit
$
4,007.0
(2
%)
$
4,078.6
12
%
$
3,657.8
Unallocated corporate items
333.9
(68
%)
1,033.2
157
%
402.6
Divestitures gain, net
-
NM
(444.6
)
129
%
(194.1
)
Restructuring, impairment, and other exit
costs (recoveries)
241.4
NM
56.2
NM
(26.5
)
Operating profit
$
3,431.7
Flat
$
3,433.8
(1
%)
$
3,475.8
See accompanying notes to the consolidated
financial statements.
Operating Segment Results and
Supplementary Information
GENERAL MILLS, INC. AND
SUBSIDIARIES
(Unaudited) (In Millions)
Quarter Ended
May 26, 2024
May 28, 2023
% Change
Net sales:
North America Retail
$
2,853.3
$
3,066.0
(7
%)
International
667.5
744.7
(10
%)
Pet
602.1
655.0
(8
%)
North America Foodservice
589.0
564.3
4
%
Total segment net sales
$
4,711.9
$
5,030.0
(6
%)
Corporate and other
2.0
-
NM
Total net sales
$
4,713.9
$
5,030.0
(6
%)
Operating profit:
North America Retail
$
670.1
$
779.5
(14
%)
International
22.4
66.8
(66
%)
Pet
143.9
133.2
8
%
North America Foodservice
79.2
72.5
9
%
Total segment operating profit
$
915.6
1,052.0
(13
%)
Unallocated corporate items
25.6
191.7
(87
%)
Restructuring, impairment, and other exit
costs
110.8
42.1
NM
Operating profit
$
779.2
$
818.2
(5
%)
See accompanying notes to the consolidated
financial statements.
Consolidated Balance
Sheets
GENERAL MILLS, INC. AND
SUBSIDIARIES
(In Millions, Except Par
Value)
May 26, 2024
May 28, 2023
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents
$
418.0
$
585.5
Receivables
1,696.2
1,683.2
Inventories
1,898.2
2,172.0
Prepaid expenses and other current
assets
568.5
735.7
Total current assets
4,580.9
5,176.4
Land, buildings, and equipment
3,863.9
3,636.2
Goodwill
14,750.7
14,511.2
Other intangible assets
6,979.9
6,967.6
Other assets
1,294.5
1,160.3
Total assets
$
31,469.9
$
31,451.7
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable
$
3,987.8
$
4,194.2
Current portion of long-term debt
1,614.1
1,709.1
Notes payable
11.8
31.7
Other current liabilities
1,419.4
1,600.7
Total current liabilities
7,033.1
7,535.7
Long-term debt
11,304.2
9,965.1
Deferred income taxes
2,200.6
2,110.9
Other liabilities
1,283.5
1,140.0
Total liabilities
21,821.4
20,751.7
Stockholders' equity:
Common stock, 754.6 shares issued, $0.10
par value
75.5
75.5
Additional paid-in capital
1,227.0
1,222.4
Retained earnings
20,971.8
19,838.6
Common stock in treasury, at cost, shares
of 195.5 and 168.0
(10,357.9
)
(8,410.0
)
Accumulated other comprehensive loss
(2,519.7
)
(2,276.9
)
Total stockholders' equity
9,396.7
10,449.6
Noncontrolling interests
251.8
250.4
Total equity
9,648.5
10,700.0
Total liabilities and equity
$
31,469.9
$
31,451.7
See accompanying notes to consolidated
financial statements.
Consolidated Statements of
Cash Flows
GENERAL MILLS, INC. AND
SUBSIDIARIES
(In Millions)
Fiscal Year
2024
2023
(Unaudited)
Cash Flows - Operating Activities
Net earnings, including earnings
attributable to redeemable and noncontrolling interests
$
2,518.6
$
2,609.6
Adjustments to reconcile net earnings to
net cash provided by operating activities:
Depreciation and amortization
552.7
546.6
After-tax earnings from joint ventures
(84.8
)
(81.3
)
Distributions of earnings from joint
ventures
50.4
69.9
Stock-based compensation
95.3
111.7
Deferred income taxes
(48.5
)
(22.2
)
Pension and other postretirement benefit
plan contributions
(30.1
)
(30.1
)
Pension and other postretirement benefit
plan costs
(27.0
)
(27.6
)
Divestitures gain, net
-
(444.6
)
Restructuring, impairment, and other exit
costs (recoveries)
223.5
24.4
Changes in current assets and liabilities,
excluding the effects of acquisitions and divestitures
10.6
(48.9
)
Other, net
41.9
71.1
Net cash provided by operating
activities
3,302.6
2,778.6
Cash Flows - Investing Activities
Purchases of land, buildings, and
equipment
(774.1
)
(689.5
)
Acquisitions, net of cash acquired
(451.9
)
(251.5
)
Investments in affiliates, net
(2.7
)
(32.2
)
Proceeds from disposal of land, buildings,
and equipment
0.8
1.3
Proceeds from divestitures, net of cash
divested
-
633.1
Other, net
30.5
(7.6
)
Net cash used by investing activities
(1,197.4
)
(346.4
)
Cash Flows - Financing Activities
Change in notes payable
(20.5
)
(769.3
)
Issuance of long-term debt
2,065.2
2,324.4
Payment of long-term debt
(901.5
)
(1,421.7
)
Proceeds from common stock issued on
exercised options
25.5
232.3
Purchases of common stock for treasury
(2,002.4
)
(1,403.6
)
Dividends paid
(1,363.4
)
(1,287.9
)
Distributions to redeemable and
noncontrolling interest holders
(21.3
)
(15.7
)
Other, net
(53.9
)
(62.6
)
Net cash used by financing activities
(2,272.3
)
(2,404.1
)
Effect of exchange rate changes on cash
and cash equivalents
(0.4
)
(12.0
)
(Decrease) increase in cash and cash
equivalents
(167.5
)
16.1
Cash and cash equivalents - beginning of
year
585.5
569.4
Cash and cash equivalents - end of
year
$
418.0
$
585.5
Cash flow from changes in current assets
and liabilities, excluding the effects of
acquisitions and divestitures:
Receivables
$
(1.8
)
$
(41.2
)
Inventories
287.6
(319.0
)
Prepaid expenses and other current
assets
167.0
61.6
Accounts payable
(251.2
)
199.8
Other current liabilities
(191.0
)
49.9
Changes in current assets and
liabilities
$
10.6
$
(48.9
)
See accompanying notes to consolidated
financial statements.
GENERAL MILLS, INC. AND
SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS
(Unaudited)
(1)
The accompanying Consolidated Financial
Statements of General Mills, Inc. (we, us, our, General Mills, or
the Company) have been prepared in accordance with accounting
principles generally accepted in the United States for annual and
interim financial information. In the opinion of management, all
adjustments considered necessary for a fair presentation have been
included and are of a normal recurring nature.
Our fiscal year ends on the last Sunday in
May. Our India business is on an April fiscal year end.
(2)
During the fourth quarter of fiscal 2024,
we acquired a pet food business in Europe for a purchase price of
$434 million, net of cash acquired. The purchase price includes
approximately $8 million related to a holdback which we expect to
pay in the first quarter of fiscal 2025, contingent upon certain
closing requirements. We financed the transaction with cash on
hand. We consolidated the business into our Consolidated Balance
Sheets and recorded goodwill of $318 million, an indefinite-lived
brand intangible asset of $118 million, and a finite-lived customer
relationship asset of $14 million. The goodwill is included in the
International segment and is not deductible for tax purposes. The
pro forma effects of this acquisition were not material. We have
conducted a preliminary assessment of the fair value of the
acquired assets and liabilities of the business and will continue
to review these items during the measurement period. The
consolidated results of the business will be reported as part of
our International operating segment in future periods on a
one-month lag. Accordingly, in fiscal 2024, our Consolidated
Statements of Earnings do not include results of this business.
During the first quarter of fiscal 2023,
we acquired TNT Crust, a manufacturer of high-quality frozen pizza
crusts for regional and national pizza chains, foodservice
distributors, and retail outlets, for a purchase price of $253
million. We financed the transaction with U.S. commercial paper. We
consolidated the TNT Crust business into our Consolidated Balance
Sheets and recorded goodwill of $157 million. The goodwill is
included in the North America Foodservice segment and is not
deductible for tax purposes. The pro forma effects of this
acquisition were not material.
During the first quarter of fiscal 2023,
we completed the asset sale of our Helper main meals and Suddenly
Salad side dishes business to Eagle Family Foods Group for $607
million and recorded a pre-tax gain of $442 million.
In fiscal 2022, we sold our European dough
businesses and recorded a net pre-tax gain on sale of $30
million.
During the third quarter of fiscal 2022,
we sold our interests in Yoplait SAS, Yoplait Marques SNC, and
Liberté Marques Sàrl to Sodiaal International (Sodiaal) in exchange
for Sodiaal’s interest in our Canadian yogurt business, a modified
agreement for the use of Yoplait and Liberté brands in the United
States and Canada, and cash. We recorded a net pre-tax gain of $164
million on the sale of these businesses.
During the first quarter of fiscal 2022,
we acquired Tyson Foods’ pet treats business for $1.2 billion in
cash. We financed the transaction with a combination of cash on
hand and short-term debt. We consolidated Tyson Foods’ pet treats
business into our Consolidated Balance Sheets and recorded goodwill
of $762 million, indefinite-lived intangible assets for the Nudges,
Top Chews, and True Chews brands totaling $330 million in
aggregate, and a finite-lived customer relationship asset of $40
million. The goodwill is included in the Pet reporting unit and is
deductible for tax purposes. The pro forma effects of this
acquisition were not material.
(3)
Restructuring and impairment charges and
project-related costs are recorded in our Consolidated Statements
of Earnings as follows:
Quarter Ended
Fiscal Year
In Millions
May 26, 2024
May 28, 2023
2024
2023
2022
Restructuring, impairment, and other
exit
costs (recoveries)
$
110.8
$
42.1
$
241.4
$
56.2
$
(26.5
)
Cost of sales
0.6
2.9
17.6
4.8
3.3
Total restructuring and impairment charges
(recoveries)
111.4
45.0
259.0
61.0
(23.2
)
Project-related costs classified in cost
of sales
$
0.4
$
2.4
$
2.0
$
2.4
$
-
In fiscal 2024, we recorded a $117 million
non-cash goodwill impairment charge related to our Latin America
reporting unit.
In fiscal 2024, we recorded $103 million
of non-cash impairment charges related to our Top Chews, True
Chews, and EPIC brand intangible assets.
In fiscal 2024, we approved restructuring
actions to enhance the go-to-market commercial strategy and related
organizational structure of our Pet segment. We expect to incur
approximately $24 million of restructuring charges and
project-related costs related to these actions, of which
approximately $2 million will be cash. These charges are expected
to consist of approximately $15 million of accelerated depreciation
and $9 million of other costs, including severance. We recognized
$14 million of accelerated depreciation and $5 million of other
costs in fiscal 2024. We expect these actions to be completed by
the end of fiscal 2026.
(4)
Unallocated corporate expense totaled $26
million in the fourth quarter of fiscal 2024, compared to $192
million in the same period last year. In the fourth quarter of
fiscal 2024, we recorded a $45 million net decrease in expense
related to the mark-to-market valuation of certain commodity
positions and grain inventories compared to a $26 million net
increase in expense in the same period last year. We recorded a $53
million legal recovery in the fourth quarter of fiscal 2024. In the
fourth quarter of fiscal 2024, we recorded $8 million of
restructuring charges in cost of sales compared to $45 million of
restructuring charges in cost of sales in the same period last
year. In the fourth quarter of fiscal 2024, certain compensation
and benefits expenses and charitable contributions decreased
compared to the same period last year. In the fourth quarter of
fiscal 2024, we recorded $13 million of transaction costs,
primarily related to our acquisition of a pet food business in
Europe. In addition, we recorded $7 million of net gains related to
valuation adjustments on certain corporate investments in the
fourth quarter of fiscal 2024, compared to $2 million of net losses
related to the sale of certain corporate investments and valuation
adjustments in the same period last year.
Unallocated corporate expense totaled $334
million in fiscal 2024, compared to $1,033 million last year. We
recorded a $39 million net decrease in expense related to the
mark-to-market valuation of certain commodity positions and grain
inventories in fiscal 2024, compared to a $292 million net increase
in expense last year. In fiscal 2024, certain compensation and
benefits expenses and charitable contributions decreased compared
to fiscal 2023. We recorded $18 million of net losses related to
valuation adjustments and the sale of corporate investments in
fiscal 2024, compared to $84 million of net losses in fiscal 2023.
In fiscal 2024, we recorded $30 million of net recoveries related
to a voluntary recall on certain international Häagen-Dazs ice
cream products in fiscal 2023, compared to a $22 million charge in
fiscal 2023. We recorded a $53 million legal recovery in fiscal
2024. In fiscal 2024, we recorded $14 million of transaction costs,
primarily related to our acquisition of a pet food business in
Europe. We recorded $6 million of integration costs primarily
related to our acquisition of TNT Crust in fiscal 2023. In
addition, we recorded $18 million of restructuring charges and $2
million of restructuring initiative project-related costs in cost
of sales in fiscal 2024, compared to $5 million of restructuring
charges and $2 million of restructuring initiative project-related
costs in cost of sales in fiscal 2023.
(5)
Basic and diluted earnings per share (EPS)
were calculated as follows:
Quarter Ended
Fiscal Year
In Millions, Except per Share
Data
May 26, 2024
May 28, 2023
2024
2023
2022
Net earnings attributable to General
Mills
$
557.5
$
614.9
$
2,496.6
$
2,593.9
$
2,707.3
Average number of common shares - basic
EPS
566.2
590.8
575.5
594.8
607.5
Incremental share effect from: (a)
Stock options
1.8
3.8
1.8
3.6
2.5
Restricted stock units and performance
share units
2.4
3.1
2.2
2.8
2.6
Average number of common shares - diluted
EPS
570.4
597.7
579.5
601.2
612.6
Earnings per share — basic
$
0.98
$
1.04
$
4.34
$
4.36
$
4.46
Earnings per share — diluted
$
0.98
$
1.03
$
4.31
$
4.31
$
4.42
(a) Incremental shares from stock options, restricted stock
units, and performance share units are computed by the treasury
stock method.
(6)
The effective tax rate for the fourth
quarter of fiscal 2024 was 20.1 percent compared to 19.1 percent
for the fourth quarter of fiscal 2023. The 1.0 percentage point
increase was primarily due to certain nonrecurring discrete tax
benefits in fiscal 2023, partially offset by favorable earnings mix
by jurisdiction in fiscal 2024. Our adjusted effective tax rate was
20.0 percent in the fourth quarter of fiscal 2024 compared to 19.1
percent in the same period last year (see Note 7 below for a
description of our use of measures not defined by GAAP). The 0.9
percentage point increase was primarily driven by favorable
nonrecurring discrete tax benefits in fiscal 2023, partially offset
by favorable earnings mix by jurisdiction in fiscal 2024.
The effective tax rate for fiscal 2024 was
19.6 percent compared to 19.5 percent in fiscal 2023. The 0.1
percentage point increase was primarily driven by certain
nonrecurring tax benefits in fiscal 2023, partially offset by
favorable earnings mix by jurisdiction in fiscal 2024. Our adjusted
effective tax rate was 20.1 percent in fiscal 2024, compared to
20.4 percent in fiscal 2023 (see Note 7 below for a description of
our use of measures not defined by GAAP). The 0.3 percentage point
decrease was primarily due to favorable earnings mix by
jurisdiction in fiscal 2024.
(7)
We have included measures in this release
that are not defined by GAAP. For each of these non-GAAP financial
measures, we are providing below a reconciliation of the
differences between the non-GAAP measure and the most directly
comparable GAAP measure, an explanation of why we believe the
non-GAAP measure provides useful information to investors and any
additional material purposes for which our management or Board of
Directors uses the non-GAAP measure. These non-GAAP measures should
be viewed in addition to, and not in lieu of, the comparable GAAP
measure.
We provide organic net sales growth rates
for our consolidated net sales and segment net sales. This measure
is used in reporting to our Board of Directors and executive
management and as a component of the Board of Directors’
measurement of our performance for incentive compensation purposes.
We believe that organic net sales growth rates provide useful
information to investors because they provide transparency to
underlying performance in our net sales by excluding the effect
that foreign currency exchange rate fluctuations, acquisitions,
divestitures, and a 53rd week, when applicable, have on
year-to-year comparability. A reconciliation of these measures to
reported net sales growth rates, the relevant GAAP measures, are
included in our Operating Segment Results above.
Certain measures in this release are
presented excluding the impact of foreign currency exchange
(constant-currency). To present this information, current period
results for entities reporting in currencies other than United
States dollars are translated into United States dollars at the
average exchange rates in effect during the corresponding period of
the prior fiscal year, rather than the actual average exchange
rates in effect during the current fiscal year. Therefore, the
foreign currency impact is equal to current year results in local
currencies multiplied by the change in the average foreign currency
exchange rate between the current fiscal period and the
corresponding period of the prior fiscal year. We believe that
these constant-currency measures provide useful information to
investors because they provide transparency to underlying
performance by excluding the effect that foreign currency exchange
rate fluctuations have on period-to-period comparability given
volatility in foreign currency exchange markets.
Also, certain measures in this release are
presented on an adjusted basis. The adjustments are either items
resulting from infrequently occurring events or items that, in
management’s judgment, significantly affect the year-to-year
assessment of operating results.
Our fiscal 2025 outlook for organic net
sales growth, constant-currency adjusted operating profit, adjusted
diluted EPS, and free cash flow conversion are non-GAAP financial
measures that exclude, or have otherwise been adjusted for, items
impacting comparability, including the effect of foreign currency
exchange rate fluctuations, restructuring charges, acquisition
transaction and integration costs, acquisitions, divestitures, and
mark-to-market effects. We are not able to reconcile these
forward-looking non-GAAP financial measures to their most directly
comparable forward-looking GAAP financial measures without
unreasonable efforts because we are unable to predict with a
reasonable degree of certainty the actual impact of changes in
foreign currency exchange rates and commodity prices or the timing
or impact of acquisitions, divestitures, and restructuring actions
throughout fiscal 2025. The unavailable information could have a
significant impact on our fiscal 2025 GAAP financial results.
For fiscal 2025, we currently expect:
foreign currency exchange rates (based on a blend of forward and
forecasted rates and hedge positions) and acquisitions and
divestitures completed prior to fiscal 2025 will have no material
impact to net sales growth and restructuring charges to be
immaterial.
Significant Items Impacting Comparability
Several measures below are presented on an adjusted basis. The
adjustments are either items resulting from infrequently occurring
events or items that, in management’s judgment, significantly
affect the year-to-year assessment of operating results.
The following are descriptions of significant items impacting
comparability of our results.
Goodwill and other
intangible assets impairments
Non-cash goodwill and other intangible assets
impairment charges related to our Latin America reporting unit and
our Top Chews, True Chews, and EPIC brand intangible assets in
fiscal 2024. Please see Note 3.
Legal
recovery
Legal recovery recorded in fiscal 2024.
Please see Note 4.
Mark-to-market
effects
Net mark-to-market valuation of certain
commodity positions recognized in unallocated corporate items.
Please see Note 4.
Restructuring charges
(recoveries) and project-related costs
Restructuring charges and project-related
costs related to commercial strategy restructuring actions and
previously announced restructuring actions in fiscal 2024.
Restructuring charges and project-related costs for global supply
chain actions, network optimization actions, and previously
announced actions in fiscal 2023. Restructuring charges for
International restructuring actions and net restructuring
recoveries for previously announced restructuring actions in fiscal
2022. Please see Note 3.
Product recall,
net
Costs related to the fiscal 2023 voluntary
recall of certain international Häagen-Dazs ice cream products, net
of recoveries. Please see Note 4.
Investment activity,
net
Valuation adjustments and the gain on sale of
certain corporate investments in fiscal 2024. Valuation adjustments
and the loss on sale of certain corporate investments in fiscal
2023. Valuation adjustments and the gain on sale of certain
corporate investments in fiscal 2022. Please see Note 4.
Transaction
costs
Transaction costs primarily related to the
acquisition of a pet food business in Europe in fiscal 2024.
Transaction costs primarily related to the sale of our Helper main
meals and Suddenly Salad side dishes business in fiscal 2023.
Fiscal 2022 transaction costs related primarily to the sale of our
interests in Yoplait SAS, Yoplait Marques SNC, and Liberté Marques
Sàrl, the sale of our European dough businesses, the sale of our
Helper main meals and Suddenly Salad side business, and the
acquisition of TNT Crust. Please see Note 2.
Acquisition integration
costs
Integration costs primarily resulting from
the acquisition of TNT Crust in fiscal 2024 and fiscal 2023.
Integration costs resulting from the acquisition of Tyson Foods’
pet treats business in fiscal 2022. Please see Note 4.
CPW restructuring
charges
CPW restructuring charges related to
previously announced restructuring actions.
Divestitures gain,
net
Net divestitures gain primarily related to
the sale of our Helper main meals and Suddenly Salad side dishes
business in fiscal 2023. Divestitures gain related to the sale of
our interests in Yoplait SAS, Yoplait Marques SNC, and Liberté
Marques Sàrl and the sale of our European dough businesses in
fiscal 2022. Please see Note 2.
Non-income tax
recovery
Recovery related to a Brazil indirect tax
item recorded in fiscal 2022.
Tax item
Discrete tax benefit recognized in fiscal
2022 related to a release of a valuation allowance associated with
our capital loss carryforwards expected to be used against future
divestiture gains.
Organic Net Sales on a 2-year Compound
Growth Rate Basis
We believe that this measure provides useful information to
investors as it compares our organic net sales growth in fiscal
2024 to performance in fiscal 2022 that preceded historic levels of
input cost inflation and net price realization the industry
experienced over the past two years.
Organic net sales on a 2-year compound growth rate basis are
calculated as follows:
Reported
Foreign
Acquisitions
Organic
Fiscal Year
Net Sales
Exchange
and Divestitures
Net Sales
Total
Fiscal 2023 vs. Fiscal 2022
6
%
(1
)
pt
(4
)
pts
10
%
Fiscal 2024 vs. Fiscal 2023
(1
)
%
-
-
(1
)
%
2-year compound growth
2
%
4
%
North America Retail
Fiscal 2023 vs. Fiscal 2022
9
%
(1
)
pt
(2
)
pts
12
%
Fiscal 2024 vs. Fiscal 2023
(1
)
%
-
-
(1
)
%
2-year compound growth
4
%
5
%
Pet
Fiscal 2023 vs. Fiscal 2022
9
%
-
1
pt
9
%
Fiscal 2024 vs. Fiscal 2023
(4
)
%
-
-
(4
)
%
2-year compound growth
2
%
2
%
Note: Tables may not foot due to
rounding.
Adjusted Operating Profit and Related
Constant-currency Growth Rate
This measure is used in reporting to our Board of Directors and
executive management and as a component of the measurement of our
performance for incentive compensation purposes. We believe that
this measure provides useful information to investors because it is
the operating profit measure we use to evaluate operating profit
performance on a comparable year-to-year basis. The measure is
evaluated on a constant-currency basis by excluding the effect that
foreign currency exchange rate fluctuations have on year-to-year
comparability given the volatility in foreign currency exchange
rates.
Our adjusted operating profit growth on a constant-currency
basis is calculated as follows:
Quarter Ended
Fiscal Year
May 26, 2024
May 28, 2023
Change
2024
2023
Change
Operating profit growth as reported
$
779.2
$
818.2
(5
)
%
$
3,431.7
$
3,433.8
Flat
Goodwill and other intangible
assets impairments
103.1
-
220.2
-
Legal recovery
(53.2
)
-
(53.2
)
-
Mark-to-market effects
(45.0
)
25.5
(39.1
)
291.9
Restructuring charges
8.3
45.0
38.8
61.0
Product recall, net
0.4
(3.0
)
(30.3
)
22.5
Investment activity, net
(6.7
)
1.9
18.5
84.0
Transaction costs (recoveries)
13.4
(1.6
)
14.0
0.4
Project-related costs
0.4
2.4
2.0
2.4
Acquisition integration costs
-
0.9
0.2
5.9
Divestitures gain, net
-
-
-
(444.6
)
Adjusted operating profit
$
799.8
$
889.4
(10
)
%
$
3,602.7
$
3,457.3
4
%
Foreign currency exchange impact
Flat
Flat
Adjusted operating profit growth
on a constant-currency basis
(10
)
%
4
%
Note: Table may not foot due to
rounding.
Adjusted Diluted EPS and Related
Constant-currency Growth Rate
This measure is used in reporting to our Board of Directors and
executive management. We believe that this measure provides useful
information to investors because it is the profitability measure we
use to evaluate earnings performance on a comparable year-to-year
basis.
The reconciliation of our GAAP measure, diluted EPS, to adjusted
diluted EPS and the related constant-currency growth rate
follows:
Quarter Ended
Fiscal Year
Per Share Data
May 26, 2024
May 28, 2023
Change
2024
2023
Change
Diluted earnings per share, as
reported
$
0.98
$
1.03
(5
)
%
$
4.31
$
4.31
Flat
Goodwill and other intangible
assets impairments
0.14
-
0.28
-
Legal recovery
(0.07
)
-
(0.07
)
-
Mark-to-market effects
(0.06
)
0.03
(0.05
)
0.37
Restructuring charges
0.01
0.06
0.05
0.08
Product recall, net
-
-
(0.04
)
0.03
Investment activity, net
(0.01
)
-
0.02
0.11
Transaction costs
0.02
-
0.02
-
Acquisition integration costs
-
-
-
0.01
Divestitures gain, net
-
-
-
(0.62
)
Adjusted diluted earnings per share
$
1.01
$
1.12
(10
)
%
$
4.52
$
4.30
5
%
Foreign currency exchange impact
Flat
Flat
Adjusted diluted earnings per share
growth,
on a constant-currency basis
(10
)
%
6
%
Note: Table may not foot due to
rounding.
Adjusted Earnings Comparisons as a Percent
of Net Sales
We believe that these measures provide useful information to
investors because they are important for assessing our adjusted
earnings comparisons as a percent of net sales on a comparable
year-to-year basis.
Our adjusted earnings comparisons as a percent of net sales are
calculated as follows:
Quarter Ended
In Millions
May 26, 2024
May 28, 2023
Comparisons as a % of Net Sales
Value
Percent of Net Sales
Value
Percent of Net Sales
Gross margin as reported (a)
$
1,688.3
35.8
%
$
1,728.2
34.4
%
Mark-to-market effects
(45.0
)
(1.0
)
%
25.5
0.5
%
Restructuring charges
0.6
-
%
2.9
0.1
%
Project-related costs
0.4
-
%
2.4
-
%
Product recall, net
0.3
-
%
0.6
-
%
Adjusted gross margin
$
1,644.5
34.9
%
$
1,759.6
35.0
%
Operating profit as reported
$
779.2
16.5
%
$
818.2
16.3
%
Goodwill and other intangible assets
impairments
103.1
2.2
%
-
-
%
Legal recovery
(53.2
)
(1.1
)
%
-
-
%
Mark-to-market effects
(45.0
)
(1.0
)
%
25.5
0.5
%
Transaction costs (recoveries)
13.4
0.3
%
(1.6
)
-
%
Restructuring charges
8.3
0.2
%
45.0
0.9
%
Investment activity, net
(6.7
)
(0.1
)
%
1.9
-
%
Product recall, net
0.4
-
%
(3.0
)
(0.1
)
%
Project-related costs
0.4
-
%
2.4
-
%
Acquisition integration costs
-
-
%
0.9
-
%
Adjusted operating profit
$
799.8
17.0
%
$
889.4
17.7
%
Net earnings attributable to General Mills
as reported
$
557.5
11.8
%
$
614.9
12.2
%
Goodwill and other intangible assets
impairments, net of tax (b)
79.4
1.7
%
-
-
%
Legal recovery, net of tax (b)
(40.3
)
(0.9
)
%
-
-
%
Mark-to-market effects, net of tax (b)
(34.7
)
(0.7
)
%
19.7
0.4
%
Transaction costs (recoveries), net of tax
(b)
11.3
0.2
%
(1.2
)
-
%
Restructuring charges, net of tax (b)
6.0
0.1
%
36.9
0.7
%
Investment activity, net, net of tax
(b)
(5.1
)
(0.1
)
%
1.9
-
%
Product recall, net, net of tax (b)
0.3
-
%
(2.3
)
-
%
Project-related costs, net of tax (b)
0.3
-
%
1.6
-
%
Acquisition integration costs, net of tax
(b)
-
-
%
0.7
-
%
Adjusted net earnings attributable to
General Mills
$
574.7
12.2
%
$
672.2
13.4
%
Note: Table may not foot due to
rounding.
For more information on the reconciling
items, please refer to the Significant Items Impacting
Comparability section above.
(a) Net sales less cost of sales.
(b) See reconciliation of adjusted
effective income tax rate below for tax impact of each
adjustment.
Fiscal Year
In Millions
2024
2023
2022
Comparisons as a % of Net Sales
Value
Percent of Net Sales
Value
Percent of Net Sales
Value
Percent of Net Sales
Gross margin as reported (a)
$
6,932.1
34.9
%
$
6,545.8
32.6
%
$
6,402.2
33.7
%
Mark-to-market effects
(39.1
)
(0.2
)
%
291.9
1.5
%
(133.1
)
(0.7
)
%
Restructuring charges
17.6
0.1
%
4.8
-
%
3.4
-
%
Project-related costs
2.0
-
%
2.4
-
%
-
-
%
Product recall, net
0.2
-
%
25.4
0.1
%
-
-
%
Transaction costs
-
-
%
-
-
%
0.8
-
%
Acquisition integration costs
-
-
%
-
-
%
0.1
-
%
Adjusted gross margin
$
6,912.7
34.8
%
$
6,870.2
34.2
%
$
6,273.4
33.0
%
Operating profit as reported
$
3,431.7
17.3
%
$
3,433.8
17.1
%
$
3,475.8
18.3
%
Goodwill and other intangible assets
impairments
220.2
1.1
%
-
-
%
-
-
%
Legal recovery
(53.2
)
(0.3
)
%
-
-
%
-
-
%
Mark-to-market effects
(39.1
)
(0.2
)
%
291.9
1.5
%
(133.1
)
(0.7
)
%
Restructuring charges (recoveries)
38.8
0.2
%
61.0
0.3
%
(23.2
)
(0.1
)
%
Product recall, net
(30.3
)
(0.2
)
%
22.5
0.1
%
-
-
%
Investment activity, net
18.5
0.1
%
84.0
0.4
%
14.7
0.1
%
Transaction costs
14.0
0.1
%
0.4
-
%
72.8
0.4
%
Project-related costs
2.0
-
%
2.4
-
%
-
-
%
Acquisition integration costs
0.2
-
%
5.9
-
%
22.4
0.1
%
Divestitures gain, net
-
-
%
(444.6
)
(2.2
)
%
(194.1
)
(1.0
)
%
Non-income tax recovery
-
-
%
-
-
%
(22.0
)
(0.1
)
%
Adjusted operating profit
$
3,602.7
18.1
%
$
3,457.3
17.2
%
$
3,213.3
16.9
%
Net earnings attributable to General Mills
as reported
$
2,496.6
12.6
%
$
2,593.9
12.9
%
$
2,707.3
14.3
%
Goodwill and other intangible assets
impairments,
net of tax (b)
161.8
0.8
%
-
-
%
-
-
%
Legal recovery, net of tax (b)
(40.3
)
(0.2
)
%
-
-
%
-
-
%
Mark-to-market effects, net of tax (b)
(30.1
)
(0.2
)
%
224.8
1.1
%
(102.5
)
(0.5
)
%
Restructuring charges (recoveries), net of
tax (b)
28.4
0.1
%
48.4
0.2
%
(16.7
)
(0.1
)
%
Product recall, net, net of tax (b)
(23.3
)
(0.1
)
%
17.3
0.1
%
-
-
%
Investment activity, net, net of tax
(b)
12.6
0.1
%
66.0
0.3
%
6.2
-
%
Transaction costs, net of tax (b)
11.9
0.1
%
0.2
-
%
55.7
0.3
%
CPW restructuring charges (recoveries),
net of tax
2.0
-
%
1.0
-
%
(0.9
)
-
%
Project-related costs, net of tax (b)
1.3
-
%
1.6
-
%
-
-
%
Acquisition integration costs, net of tax
(b)
0.2
-
%
4.6
-
%
17.2
0.1
%
Divestitures gain, net, net of tax (b)
-
-
%
(371.4
)
(1.8
)
%
(189.0
)
(1.0
)
%
Tax items
-
-
%
-
-
%
(50.7
)
(0.3
)
%
Non-income tax recovery, net of tax
(b)
-
-
%
-
-
%
(14.5
)
(0.1
)
%
Adjusted net earnings attributable to
General Mills
$
2,621.1
13.2
%
$
2,586.4
12.9
%
$
2,412.2
12.7
%
Note: Table may not foot due to
rounding.
For more information on the reconciling
items, please refer to the Significant Items Impacting
Comparability section above.
(a) Net sales less cost of sales.
(b) See reconciliation of adjusted
effective income tax rate below for tax impact of each
adjustment.
Constant-currency Segment Operating Profit
Growth Rates
We believe that this measure provides useful information to
investors because it provides transparency to underlying
performance of our segments by excluding the effect that foreign
currency exchange rate fluctuations have on year-to-year
comparability given volatility in foreign currency exchange
markets.
Our segments' operating profit growth rates on a
constant-currency basis are calculated as follows:
Quarter Ended May 26,
2024
Percentage Change in Operating
Profit as Reported
Impact of Foreign Currency
Exchange
Percentage Change in Operating
Profit on Constant-Currency Basis
North America Retail
(14
)
%
Flat
(14
)
%
International
(66
)
%
1
pt
(68
)
%
Pet
8
%
Flat
8
%
North America Foodservice
9
%
Flat
9
%
Total segment operating profit
(13
)
%
Flat
(13
)
%
Fiscal Year Ended May 26,
2024
Percentage Change in Operating
Profit as Reported
Impact of Foreign Currency
Exchange
Percentage Change in Operating
Profit on Constant-Currency Basis
North America Retail
(3
)
%
Flat
(3
)
%
International
(23
)
%
(3
)
pts
(20
)
%
Pet
9
%
Flat
9
%
North America Foodservice
9
%
Flat
9
%
Total segment operating profit
(2
)
%
Flat
(2
)
%
Note: Tables may not foot due to
rounding.
Adjusted Effective Income Tax
Rate
We believe this measure provides useful information to investors
because it presents the adjusted effective income tax rate on a
comparable year-to-year basis.
Adjusted effective income tax rates are calculated as
follows:
Quarter Ended
May 26, 2024
May 28, 2023
In Millions
Pretax Earnings (a)
Income Taxes
Pretax Earnings (a)
Income Taxes
As reported
$
676.6
$
136.0
$
737.4
$
140.7
Goodwill and other intangible assets
impairments
103.1
23.7
-
-
Legal recovery
(53.2
)
(12.9
)
-
-
Mark-to-market effects
(45.0
)
(10.4
)
25.5
5.8
Transaction costs (recoveries)
13.4
2.1
(1.6
)
(0.4
)
Restructuring charges
8.3
2.4
45.0
8.1
Investment activity, net
(6.7
)
(1.5
)
1.9
-
Product recall, net
0.4
0.1
(3.0
)
(0.7
)
Project-related costs
0.4
0.2
2.4
0.8
Acquisition integration costs
-
-
0.9
0.2
As adjusted
$
697.3
$
139.5
$
808.6
$
154.5
Effective tax rate:
As reported
20.1
%
19.1
%
As adjusted
20.0
%
19.1
%
Sum of adjustments to income taxes
$
3.5
$
13.9
Average number of common shares - diluted
EPS
570.4
597.7
Impact of income tax adjustments on
adjusted diluted EPS
$
(0.01
)
$
(0.02
)
Note: Table may not foot due to
rounding.
(a) Earnings before income taxes and
after-tax earnings from joint ventures.
Fiscal Year Ended
May 26, 2024
May 28, 2023
May 29, 2022
In Millions
(Except Per Share Data)
Pretax Earnings (a)
Income Taxes
Pretax Earnings (a)
Income Taxes
Pretax Earnings (a)
Income Taxes
As reported
$
3,028.3
$
594.5
$
3,140.5
$
612.2
$
3,209.6
$
586.3
Goodwill and other intangible assets
impairments
220.2
58.4
-
-
-
-
Legal recovery
(53.2
)
(12.9
)
-
-
-
-
Mark-to-market effects
(39.1
)
(9.0
)
291.9
67.1
(133.1
)
(30.6
)
Restructuring charges (recoveries)
38.8
10.4
61.0
12.6
(23.2
)
(6.4
)
Product recall, net
(30.3
)
(7.0
)
22.5
5.2
-
-
Investment activity, net
18.5
5.9
84.0
18.0
14.7
8.5
Transaction costs
14.0
2.1
0.4
0.2
72.8
16.4
Project-related costs
2.0
0.7
2.4
0.8
-
-
Acquisition integration costs
0.2
0.1
5.9
1.3
22.4
5.1
Divestitures gain, net
-
-
(444.6
)
(73.2
)
(194.1
)
(5.1
)
Non-income tax recovery
-
-
-
-
(22.0
)
(7.5
)
Tax item
-
-
-
-
-
50.7
As adjusted
$
3,199.4
$
643.1
$
3,164.0
$
644.1
$
2,947.1
$
617.4
Effective tax rate:
As reported
19.6
%
19.5
%
18.3
%
As adjusted
20.1
%
20.4
%
20.9
%
Sum of adjustments to income taxes
$
48.6
$
32.0
$
31.1
Average number of common shares - diluted
EPS
579.5
601.2
612.6
Impact of income tax adjustments on
adjusted diluted EPS
$
(0.08
)
$
(0.05
)
$
(0.05
)
Note: Table may not foot due to
rounding.
(a) Earnings before income taxes and
after-tax earnings from joint ventures.
Free Cash Flow Conversion Rate
We believe this measure provides useful information to investors
because it is important for assessing our efficiency in converting
earnings to cash and returning cash to shareholders. The
calculation of free cash flow conversion rate and net cash provided
by operating activities conversion rate, its equivalent GAAP
measure, follows:
In Millions
Fiscal 2024
Net earnings, including earnings
attributable to redeemable and noncontrolling interests,
as reported
$
2,518.6
Goodwill and other intangible assets
impairments, net of tax
161.8
Legal recovery, net of tax
(40.3
)
Mark-to-market effects, net of tax
(30.1
)
Restructuring charges, net of tax
28.4
Product recall, net, net of tax
(23.4
)
Investment activity, net, net of tax
12.6
Transaction costs, net of tax
11.9
CPW restructuring charges, net of tax
2.0
Project-related costs, net of tax
1.3
Acquisition integration costs, net of
tax
0.2
Divestitures gain, net, net of tax
-
Adjusted net earnings, including earnings
attributable to redeemable and
noncontrolling interests
$
2,643.0
Net cash provided by operating
activities
3,302.6
Purchases of land, buildings, and
equipment
(774.1
)
Free cash flow
$
2,528.5
Net cash provided by operating activities
conversion rate
131
%
Free cash flow conversion rate
96
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240625757451/en/
(Investors) Jeff Siemon: +1-763-764-2301 (Media) Chelcy Walker:
+1-763-764-6364
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