Vending

Pandemic drives General Mills’ sales and earnings gains for Q2 2021

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December 17, 2020

General Mills Inc. reported its net sales increased 7% from $4.4 billion in the second quarter of 2020 to $4.7 billion for the 2021 second quarter ended Nov. 29, 2020, reflecting broad-based market share gains amid elevated at-home food demand resulting from the COVID-19 pandemic.

Revenue beat market expectations by $70 million, according to Seeking Alpha, while organic sales rose 7%, surpassing market expectations of 6.2%, and non-GAAP earnings per share of $1.06 beat expectations by 9 cents and GAAP EPS of $1.11 beat expectations by 13 cents.

Shares traded at $59.54 today against a 52-week range of $46.12-$65.20.

"We executed very well again in the second quarter, driving strong performance on the top and bottom lines," Chairman and CEO Jeff Harmening said in the press release. "We strongly believe that the work we're doing today to strengthen our brands and capabilities and deepen our connection with consumers will translate to profitable growth and shareholder value creation for the long term."

Operating profit rose 13% to $917 million, primarily driven by higher gross profit dollars and a net gain on investment activity, partially offset by higher selling, general and administrative expenses, including higher media investment.

Net earnings increased 19% to $688 million and diluted earnings per share increased 17% from 95 cents in last year's second quarter to $1.11, primarily reflecting higher operating profit, lower net interest expense and higher after-tax earnings from joint ventures.

Adjusted diluted EPS for the second quarter was $1.06, up 9% from 95 cents in the prior year's second quarter in constant currency, primarily driven by higher adjusted operating profit, lower net interest expense and higher after-tax earnings from joint ventures.

Net sales for North America retail rose 9% to $2.92 billion for the quarter, reflecting positive competitive performance amid elevated demand for food at home due to the pandemic, including stable or growing market share in both the U.S. and Canada.

Net sales increased 18% in U.S. meals and baking, 7% in Canada, 4% in U.S. cereal and 3% in U.S. yogurt.

U.S. snacks net sales were down 2% percent.

Second quarter net sales for Europe and Australia rose 8% and Asia and Latin America rose 5%. Net sales for the pet segment rose 18%.

Net sales for convenience stores and foodservice fell 14% during the quarter to $440 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, lodging and convenience stores.

General Mills expects 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.

For an update on how the coronavirus pandemic is affecting convenience services, click here.