Vending

General Mills boosts Q1 2021 sales 9% on rising at-home sales driven by COVID-19

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September 23, 2020

General Mills Inc.'s stock rose 3.44% in premarket trading after the company's Q1 2021 sales beat expectations and the company raised its dividend, according to a MarketWatch report. The stock was trading at $57.71 this morning.

The company declared a quarterly dividend of 51 cents per share, a 4% gain, payable Nov. 2 to shareholders of record as of Oct. 9. The stock price has increased 8.3% year to date compared to the S&P 500 index, which is up 2.6%.

The company did not offer fiscal 2021 guidance on account of the pandemic.

Company sales rose 9% to $4.4 billion for the 2021 first quarter ending Aug. 30, 2020, compared to $4 billion for the quarter in 2019. The increase reflected higher pound volume due to elevated at-home food demand resulting from COVID-19, in addition to positive price realization.

"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," Jeff Harmening, chairman and CEO, said in a statement. "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."

Profit rose 29% from $662 million in 2019 to $854 million driven mainly by higher net sales, higher gross margin as a percent of sales and lower restructuring charges that were slightly offset by higher selling, general and administrative costs.

Net earnings jumped 23% from $521 million in 2019 to $639 million, with diluted earnings per share rising 21% from 85 cents in 2019 to $1.03, driven by higher operating profit and higher after-tax earnings from joint ventures.

Adjusted earnings per share were $1.00, marking a 27% boost in constant currency over the 79 cents in 2019.

First-quarter net sales for General Mills' North America retail segment increased 14% percent to $2.71 billion, primarily reflecting increased demand for food at home resulting from the pandemic. Organic net sales also increased 14%, with a strong increase in organic pound volume partially offset by unfavorable organic net price realization and mix, due to stronger growth for heavier products including refrigerated baked goods, dessert mixes and soup.

Net retail sales increased 31% in U.S. meals and baking, 10% in U.S. cereal, 5% in U.S. yogurt and 3% percent in Canada.

U.S. snacks net sales were down 2%.

Retail segment operating profit increased 24% to $695 million, primarily driven by higher volume.

First-quarter net sales for the convenience stores and foodservice segment declined 12% to $392 million, reflecting reduced away-from-home food demand related to the pandemic. While improved versus the prior quarter, consumer traffic remained below year-ago levels in key channels including restaurants, lodging and convenience stores.

For an update on how the coronavirus pandemic has affected convenience services, click here.