Vending

General Mills reports earnings dip on improved Q1 2022 sales

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September 22, 2021

General Mills Inc. reported an earnings decline on improved sales for the first quarter of 2022 compared to the previous year, according to an earnings report. Retail sales declined while foodservice sales increased as the economy recovered from the 2020 impact of the coronavirus pandemic.

Net sales rose 4% from $4.36 billion in Q1, 2021 to $4.54 billion for the quarter ending Aug. 29, 2021, while organic net sales increased 2%, including contributions from positive organic net price realization and mix and higher organic pound volume.

Net earnings attributable to General Mills declined 2% from $638 million to $627 million in the comparative quarters.

Basic earnings per share fell 1% from $1.04 to $1.02 for the comparable quarters, primarily reflecting lower operating profit, while diluted EPS fell 1% from $1.03 to $1.02.

Adjusted diluted EPS fell 1% from $1 to 99 cents.

First-quarter net sales for General Mills' North America retail segment declined 3% to $2.64 billion, driven by lower at-home food demand and the comparison to the prior-year period when net sales benefited from retailers rebuilding inventory that had been drawn down at the onset of the pandemic.

Organic net sales for the North America retail segment also were down 3%. However, on a two-year compound growth basis, relative to pre-pandemic levels, first-quarter organic net sales were up 5%.

First-quarter net sales for the convenience stores and foodservice segment increased 23% to $482 million, reflecting sequential recovery in key away-from-home food channels including schools, restaurants, lodging and convenience stores. On a two-year compound growth basis, relative to pre-pandemic levels, first-quarter organic net sales were up 4%.

The $4.54 billion in quarterly revenue beat analyst expectations by $240 million, while the GAAP EPS of $1.02 beat expectations by 15 cents and the non-GAAP EPS of 99 cents beat expectations by 10 cents, according to Seeking Alpha.

Shares traded at $60.01 today against a 52-week range of $53.96-$64.65.

The company expects changes in consumer behaviors driven by the COVID-19 pandemic will result in ongoing elevated consumer demand for food at home, relative to pre-pandemic levels.

"Our strong execution in the first quarter enabled us to deliver top- and bottom-line results ahead of our expectations," Jeff Harmening, chairman and CEO, said in the press release. "We delivered these good results while continuing to advance our Accelerate strategy, including making important progress on portfolio reshaping in the quarter."

The company reaffirmed its key full-year fiscal 2022 targets.

Organic net sales are expected to be toward the higher end of the company's initial guidance range of down 1% to 3%, reflecting stronger-than-expected net sales performance in the first quarter.