Vending

General Mills boosts sales and earnings for Q3 2021, driven by pandemic

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March 24, 2021

General Mills Inc. reported its net sales increased 8% from $4.28 billion in Q3 2020 to $4.5 billion for the in Q3 2021, reflecting broad-based market share gains amid elevated at-home food demand resulting from the COVID-19 pandemic, according to an earnings release.

Net earnings increased 31% from $454 million in Q3 2020 to $596 million in Q3 2021.

Diluted EPS increased 30% from 74 cents in Q3 2020 to 96 cents in Q3 2021, primarily reflecting higher operating profit, partially offset by higher average diluted shares outstanding.

Basic EPS rose 29% from 75 cents in Q3 2020 to 97 cents in Q3 2021.

Adjusted diluted EPS totaled 82 cents, up 6% in constant currency, primarily driven by higher adjusted operating profit and lower net interest expense, partially offset by higher average diluted shares outstanding.

The company's $4.52 billion revenue for the third quarter ending Feb. 28, 2021 beat analyst's expectations by $60 million, according to Seeking Alpha, while its GAAP EPS of 96 cents beat expectations by 12 cents and its Non-GAAP EPS of 82 cents missed expectations by 2 cents.

Shares traded at $58.33 today against a 52-week range of $45.40 to $65.02.

"We continued to execute well and delivered profitable growth in the third quarter," General Mills Chairman and Chief Executive Officer Jeff Harmening said in the press release. "We're continuing to advance our Accelerate strategy, including yesterday's announcement of our proposed divestiture of our European Yoplait business."

Third-quarter net sales for General Mills' North America retail segment increased 9% to $2.73 billion, reflecting positive competitive performance amid elevated demand for food at home due to the pandemic. Organic net sales increased 9%, driven by higher organic pound volume.

Net sales increased 15% in U.S. meals and baking, 13 in Canada, 9% in U.S. cereal, and 3% in U.S. yogurt.

U.S. snacks net sales were down 3%, while segment operating profit increased 14% percent to $606 million, primarily driven by higher volume, HMM cost savings, and fixed cost leverage in the supply chain, partially offset by input cost inflation, costs to secure incremental capacity, and higher logistics costs.

Third-quarter net sales for the convenience stores and foodservice segment declined 10% to $417 million, reflecting reduced away-from-home food demand related to the pandemic. Lower consumer traffic and other virus-related restrictions negatively impacted the segment's key away-from-home channels including restaurants, schools and lodging. Segment operating profit of $64 million was down 31%, driven by lower net sales and fixed cost deleverage in the supply chain.

The company expects that the COVID-19 pandemic will drive continued elevated consumer demand for food at home, relative to pre-pandemic levels, through the remainder of fiscal 2021.

The company expects full-year organic net sales to increase approximately 3.5%, reflecting strong year-to-date growth, partially offset by a difficult comparison in the fourth quarter reflecting the initial pandemic-driven surge in at-home food demand as well as the extra month of results in the pet segment.

On the bottom line, better-than-expected first-half adjusted operating profit margin results are now expected to be offset by higher input cost inflation and higher logistics costs in the second half. As a result, full-year fiscal 2021 adjusted operating profit margin is expected to be approximately in line with fiscal 2020 levels, consistent with the guidance the company outlined at the beginning of the year.

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