Workflow
General Mills(GIS) - 2025 Q3 - Quarterly Results
GISGeneral Mills(GIS)2025-03-19 11:10

Financial Performance - Third-quarter net sales decreased by 5% to 4.8billion,withorganicnetsalesalsodown54.8 billion, with organic net sales also down 5%, primarily due to retailer inventory reductions and unfavorable foreign currency exchange[5] - Operating profit for the third quarter was 891 million, down 2%, while adjusted operating profit decreased by 13% in constant currency to 801million[6]−Dilutedearningspershare(EPS)fellby4801 million[6] - Diluted earnings per share (EPS) fell by 4% to 1.12, with adjusted diluted EPS down 15% in constant currency to 1.00[6]−Thecompanyexpectsorganicnetsalestodeclineby21.00[6] - The company expects organic net sales to decline by 2% to 1.5%, a revision from the previous expectation of flat to up 1%[30] - Adjusted operating profit and adjusted diluted EPS are projected to decrease by 8% to 7% in constant currency, compared to earlier estimates of a 4% to 2% decline[30] - Net earnings for the nine-month period ended February 23, 2025, were 2,016.9 million, compared to 1,958.9millionforthesameperiodinthepreviousyear,reflectinganincreaseof2.971,958.9 million for the same period in the previous year, reflecting an increase of 2.97%[40] - Net earnings attributable to General Mills for the nine-month period ended February 23, 2025, were 2,001.2 million, compared to 1,939.1millioninthesameperiodlastyear,representinganincreaseofabout3.21,939.1 million in the same period last year, representing an increase of about 3.2%[5] - Reported diluted earnings per share (EPS) for the quarter ended February 23, 2025, was 1.12, a decrease of 4% compared to 1.17forthesamequarterlastyear[68]−AdjusteddilutedEPSforthesamequarterwas1.17 for the same quarter last year[68] - Adjusted diluted EPS for the same quarter was 1.00, reflecting a 15% decline from 1.17year−over−year[68]SegmentPerformance−TheNorthAmericaRetailsegmentreporteda71.17 year-over-year[68] Segment Performance - The North America Retail segment reported a 7% decline in net sales to 3.0 billion, with organic net sales down 6%[13] - The North America Pet segment's net sales were flat at 624million,withorganicnetsalesdown5624 million, with organic net sales down 5%[15] - The North America Foodservice segment saw a 1% increase in net sales to 555 million, with organic net sales also up 1%[17] - International segment net sales decreased by 4% to 651million,impactedbyunfavorableforeigncurrencyexchange[19]−NorthAmericaRetailsegmentnetsalesfellby7651 million, impacted by unfavorable foreign currency exchange[19] - North America Retail segment net sales fell by 7% to 3,009.1 million, while operating profit decreased by 14% to 648.1million[36]−TheInternationalsegment′snetsalesdecreasedby4648.1 million[36] - The International segment's net sales decreased by 4% to 651.3 million, with operating profit down 1% to 18.0million[36]−TheNorthAmericaPetsegmentreportedflatnetsalesat18.0 million[36] - The North America Pet segment reported flat net sales at 623.7 million, but operating profit decreased by 20% to 102.2million[36]CostManagementandSavingsInitiatives−Grossmarginimprovedby40basispointsto33.9102.2 million[36] Cost Management and Savings Initiatives - Gross margin improved by 40 basis points to 33.9% of net sales, driven by Holistic Margin Management (HMM) cost savings, despite input cost inflation[9] - The Holistic Margin Management program is anticipated to deliver at least 5% savings in cost of goods sold for fiscal 2026, equating to approximately 600 million in gross productivity savings[27] - The company is reviewing cost-saving initiatives targeting at least 100millioninsavingsforfiscal2026[27]−Unallocatedcorporateexpensestotaled100 million in savings for fiscal 2026[27] - Unallocated corporate expenses totaled 56 million in Q3 FY2025, down from 64millioninQ3FY2024,reflectingadecreaseofapproximately12.564 million in Q3 FY2024, reflecting a decrease of approximately 12.5%[4] Cash Flow and Assets - Cash provided by operating activities totaled 2.3 billion through nine months, compared to 2.4billionayearago[25]−Cashflowsfromoperatingactivitiesforthenine−monthperiodwere2.4 billion a year ago[25] - Cash flows from operating activities for the nine-month period were 2,306.6 million, down from 2,438.9millionintheprioryear[40]−Cashandcashequivalentsattheendoftheperiodwere2,438.9 million in the prior year[40] - Cash and cash equivalents at the end of the period were 521.3 million, a decrease from 588.6millionattheendofthepreviousyear[40]−Totalassetsincreasedto588.6 million at the end of the previous year[40] - Total assets increased to 32,706.2 million as of February 23, 2025, up from 30,860.5millionayearearlier,representingagrowthof5.9730,860.5 million a year earlier, representing a growth of 5.97%[38] - Total current liabilities increased to 7,876.2 million from 7,061.9million,markingariseof11.527,061.9 million, marking a rise of 11.52%[38] - Long-term debt stood at 11,839.6 million, an increase from 11,015.1million,indicatingariseof7.4811,015.1 million, indicating a rise of 7.48%[38] - Stockholders' equity decreased to 9,512.6 million from 9,691.3million,reflectingadeclineof1.859,691.3 million, reflecting a decline of 1.85%[38] Acquisitions and Divestitures - The company completed the sale of its Canada yogurt business for a pre-tax gain of 96 million and expects to close the sale of its U.S. yogurt business for approximately 2billionin2025[42]−TheacquisitionofNXPetHolding,Inc.wascompletedfor2 billion in 2025[42] - The acquisition of NX Pet Holding, Inc. was completed for 1 billion, with recorded goodwill of 1,087millionandanindefinite−livedintangibleassetof1,087 million and an indefinite-lived intangible asset of 289 million[45] - Transaction costs related to the sale of North American yogurt businesses and the Whitebridge Pet Brands acquisition totaled 33millionforthenine−monthperiodendedFebruary23,2025,comparedto33 million for the nine-month period ended February 23, 2025, compared to 1 million in the same period last year[4] - Integration costs related to the Whitebridge Pet Brands acquisition amounted to 7millionforthenine−monthperiodendedFebruary23,2025[4]TaxandEarningsAdjustments−Theeffectivetaxrateforthenine−monthperiodendedFebruary23,2025,was20.57 million for the nine-month period ended February 23, 2025[4] Tax and Earnings Adjustments - The effective tax rate for the nine-month period ended February 23, 2025, was 20.5%, up from 19.5% in the same period last year[5] - Adjusted effective income tax rate for the quarter ended February 23, 2025, is 21.0%, compared to 18.4% for the same quarter in 2024[77] - The sum of adjustments to income taxes for the nine-month period is (5.2) million, with a significant adjustment of 45.1millioninthepreviousyear[77]−Goodwillimpairmentrecordedforthenine−monthperiodendedFebruary23,2025,is45.1 million in the previous year[77] - Goodwill impairment recorded for the nine-month period ended February 23, 2025, is 117.1 million[77] Product Management Challenges - Product recall net costs for the nine-month period are $(30.7) million, reflecting ongoing challenges in product management[77]