Vending

General Mills boosts Q2, HY 2023 results, raises FY expectations

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December 20, 2022

General Mills Inc. lifted its Q2 and HY 2023 sales and earnings over the prior year periods and raised its full year expectations, according to an earnings report. Highlights include:

• Net sales increased 4% from $5.02 billion in Q2 2022 to $5.22 billion for the quarter ending Nov. 27, 2022, including a 5-point headwind from net divestiture and acquisition activity and one point of unfavorable foreign currency exchange. Organic net sales increased 11%, driven by positive organic net price realization and mix, partially offset by lower organic pound volume.
• Net earnings increased 1%, from $597 million to $606 million for the comparative quarters.
• Diluted EPS rose 4%, from 97 cents to $1.01, while basic earnings per share rose 4%, from 98 cents to $1.101, driven by lower net shares outstanding and a lower effective tax rate, partially offset by lower benefit plan non-service income.
• Adjusted diluted EPS rose 12% to $1.10, driven primarily by higher adjusted operating profit, a lower adjusted effective tax rate and lower net shares outstanding, partially offset by lower benefit plan non-service income.
• Second-quarter net sales for General Mills' North America retail segment increased 11% to $3.4 billion, driven by favorable net price realization and mix, partially offset by lower pound volume and a 2-point headwind from the Helper and Suddenly Salad divestiture. Net sales increased 18% in U.S. snacks, 10% in U.S. meals and baking solutions and 10% in U.S. morning foods.
• Second-quarter net sales for the North America foodservice segment increased 24% to $583 million, driven by favorable net price realization and mix, including a 5-point benefit from market index pricing on bakery flour.
• Second-quarter net sales for the international segment fell 27% to $672 million, driven by lower pound volume, including the impact of yogurt and dough divestitures and the ice cream recall, and a 6-point headwind from foreign currency exchange, partially offset by favorable net price realization and mix.
• Net sales for the half year increased 4%, from $9.56 billion to $9.94 billion, including a 5-point headwind from net divestiture and acquisition activity and one point of unfavorable foreign currency exchange. Organic net sales increased 11%, driven by positive organic net price realization and mix, partially offset by lower organic pound volume.
• Net earnings attributable to General Mills for the half year increased 16% from $1.2 billion to $1.4 billion.
• Diluted EPS for the half year rose 19%, from $1.99 to $2.36, primarily reflecting higher operating profit and lower net shares outstanding.
• Adjusted diluted EPS for the half year rose 13% to $2.21, driven primarily by higher adjusted operating profit, a lower adjusted effective tax rate and lower net shares outstanding.

Shares traded today at $83.54 against a 52-week range of $61.67-$88.34.

The $5.22 billion in quarterly revenue beat analyst expectations by $30 million while the non-GAAP EPS of $1.10 beat expectations by 4 cents, according to Seeking Alpha.

"We continued to execute well and delivered strong top and bottom-line growth in the second quarter," Jeff Harmening, chairman and CEO of General Mills, said in the press release. "With strong first-half results and positive momentum on our business, we are increasing our full-year outlook for organic net sales, adjusted operating profit and adjusted diluted EPS growth."

Organic net sales for fiscal 2023 are now expected to increase 8% to 9%, compared to the previous expectation of 6% to 7%.

Adjusted diluted EPS is now expected to increase 4% to 6% in constant currency, compared to the previous range of up 2% to 5%.