Vending

General Mills reports Q2 2022 sales gain, earnings decline

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December 21, 2021

General Mills Inc. boosted sales by 6% for the second quarter of 2022 against the prior year's second quarter, while earnings declined by 13%, according to an earnings report.

Net sales increased 6% from $4.72 billion in Q2 2021 to $5.02 billion for the quarter ending Nov. 28, 2021, including one point of favorable foreign currency exchange. Organic net sales increased 5%, reflecting 5 points of positive organic net price realization and mix.

Net earnings attributable to General Mills fell 13% from $688.4 million to $597 million in the comparable quarters, and diluted EPS was down 13% from $1.11 to 97 cents, primarily reflecting lower operating profit. Adjusted diluted EPS declined 7% to 99 cents in constant currency, driven primarily by lower adjusted operating profit.

For the first six months, net sales increased 5% to $9.6 billion, including one point of favorable foreign currency exchange. Organic net sales increased 4%, reflecting four points of positive organic net price realization and mix.

For the first six months, net earnings attributable to General Mills was down 8% to $1.2 billion and diluted EPS was down 7% from $2.14 to $1.99, primarily reflecting lower operating profit. Adjusted diluted EPS of $1.98 declined 4% in constant currency, driven primarily by lower adjusted operating profit.

Second-quarter net sales for General Mills' North American retail segment increased 2% to $2.98 billion, driven by favorable net price realization and mix, partially offset by lower pound volume. Organic net sales increased 1%.

Second-quarter net sales for the convenience stores and foodservice segment increased 23% to $541 million, reflecting ongoing recovery in key away-from-home food channels including schools, restaurants, lodging and convenience stores, as well as market index pricing on bakery flour.

The $5.02 billion in quarterly revenue beat analyst expectations by $160 million, while the non-GAAP EPS of 99 cents missed expectations by 6 cents and the GAAP EPS of 97 cents missed expectations by 7 cents, according to Seeking Alpha.

Shares traded at $64.90 today against a 52-week range of $53.96-$69.68.

"In the face of an unprecedented combination of input cost inflation and supply chain disruptions, we're moving quickly to keep our trusted brands on store shelves for consumers while driving net price realization to protect our bottom line," General Mills Chairman and CEO Jeff Harmening said in the press release. "As a result, we now expect to meet or exceed each of our financial targets for the year. We also advanced our portfolio reshaping efforts in the quarter, and we're more confident than ever that General Mills will emerge from the pandemic a stronger company better geared to generate profitable growth in line with our 'Accelerate' strategy."

General Mills updated its guidance for fiscal 2022 to reflect stronger topline growth and significantly higher input costs than originally expected, as well as the impact of the European Yoplait divestiture.

Organic net sales are now expected to increase 4% to 5% due to stronger-than-expected performance in the first and second quarters. Full-year organic net sales were previously expected to be toward the higher end of the range of down 1% to 3%.