Vending

General Mills boosts Q1 2024 sales on pricing, suffers earnings drop

Image: Adobe Stock.

September 20, 2023

General Mills Inc. lifted its Q1 2024 sales boosted by higher pricing but suffered an earnings decline, according to an earnings report. Highlights include:

• Net sales increased 4% from $4.7 billion in Q1 2023 to $4.9 billion for the quarter ending Aug. 27, 2023, with favorable net price realization and mix partially offset by lower pound volume.
• Net earnings fell 18% from $820 million to $674 million in the comparative quarters.
• EPS on a basic basis fell 16% from $1.37 to $1.15 and on a diluted basis from $1.35 to $1.14, driven primarily by lower operating profit and higher net interest expense, partially offset by lower net shares outstanding.
• Adjusted diluted EPS fell 1% to $1.09, driven primarily by higher net interest expense and a higher adjusted effective tax rate, partially offset by higher adjusted operating profit and lower net shares outstanding.
• Net sales for the North America retail segment increased 3% from $2.98 billion to $3.1 billion, driven by favorable net price realization and mix, partially offset by lower pound volume, including a 1-point headwind from divestitures. Net sales were up high-single digits for the U.S. snacks operating unit, up low-single digits for U.S. morning foods, and roughly flat for Canada. Net sales for U.S. meals and baking solutions fell low-single digits due to the impact of the Helper and Suddenly Salad divestiture.
• Net sales for the North America foodservice segment increased 8% from $496 million to $536 million, including a 4-point benefit from the TNT Crust acquisition.
• Net sales for the international segment increased 10% from $652 million to $716 million, driven by favorable net price realization and mix and a 1-point benefit from foreign currency exchange, partially offset by lower pound volume.
• Net sales for the pet segment remained flat at $580 million, driven by favorable net price realization and mix, offset by lower pound volume.

The following transactions impacted the comparability of financial 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 the first quarter of 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.

Shares traded today at $65.88 against a 52-week range of $64.70 to $90.89.

The $4.9 billion in quarterly revenue was in line with analyst expectations while the non-GAAP EPS of $1.09 beat expectations by one cent, according to Seeking Alpha.

"We delivered growth on the top and bottom lines in the first quarter amid an evolving external environment characterized by moderating inflation, stabilizing supply chains and a resilient but increasingly cautious consumer," Jeff Harmening, CEO and chairman, said in the press release. "Looking ahead, we will remain focused on executing our Accelerate strategy and driving strong growth for our brands. With confidence in our plans and our ability to adapt to continued change in the consumer landscape, we are reaffirming our guidance for fiscal 2024."

Organic net sales are expected to increase 3% to 4% in fiscal 2024.