General Mills(US:GIS)2025-12-17 12:02Financial Performance - Net sales for the second quarter were $4.9 billion, down 7%, with organic net sales down 1%[5] - Operating profit decreased by 32% to $728 million, while adjusted operating profit was down 20% in constant currency to $848 million[6] - Diluted earnings per share (EPS) fell 45% to $0.78, with adjusted diluted EPS down 21% in constant currency to $1.10[5] - For the quarter ended November 23, 2025, net sales were $4,860.8 million, a decrease of 7% compared to $5,240.1 million in the same quarter of 2024[32] - Operating profit for the same quarter was $728.0 million, down 32% from $1,077.9 million year-over-year[32] - Net earnings attributable to General Mills for the quarter ended Nov. 23, 2025, were $413.0 million, or 8.5% of net sales, compared to $795.7 million and 15.2% in the same quarter of 2024[74] - Adjusted net earnings attributable to General Mills for the six-month period ended Nov. 23, 2025, were $1,059.6 million, or 11.3% of net sales, compared to $1,391.1 million and 13.8% in the prior year[76] - The total segment operating profit for the six-month period ended Nov. 23, 2025, decreased by 17% on a reported basis[80] Sales by Segment - North America Retail segment net sales decreased 13% to $2.9 billion, with organic net sales down 3%[12] - North America Pet segment net sales increased 11% to $660 million, benefiting from the North American Whitebridge Pet Brands acquisition[14] - International segment net sales rose 6% to $729 million, with organic net sales up 4%[19] - North America Retail segment net sales decreased by 13% to $2,883.3 million for the quarter ended November 23, 2025[35] - The International segment reported a 6% increase in net sales to $728.9 million for the same quarter[35] - The North America Pet segment saw an 11% increase in net sales, reaching $660.4 million for the quarter[35] Future Expectations - The company expects a 25% increase in sales from new products in fiscal 2026, driven by investments in brand remarkability[3] - General Mills expects organic net sales growth to range between down 1% and up 1% for fiscal 2026[30] - Adjusted operating profit and adjusted diluted EPS are projected to decline by 10% to 15% in constant currency[30] - The company anticipates a net impact of divestitures and acquisitions to reduce full-year net sales growth by approximately 4%[30] - The company expects to incur approximately $82 million of restructuring charges related to a multi-year organizational initiative to enhance supply chain competitiveness[45] - The company expects a net sales growth reduction of approximately 4% due to foreign currency exchange rates, acquisitions, and a 53rd week in fiscal 2026[55] - Restructuring and transformation charges for fiscal 2026 are expected to total approximately $160 million to $165 million[55] Cash Flow and Assets - Cash provided by operating activities totaled $1.2 billion through six months, down from $1.8 billion a year ago[25] - Cash and cash equivalents at the end of the period were $683.4 million, down from $2,292.8 million at the end of the previous year[40] - The net cash provided by operating activities was $1,216.3 million for the six-month period ended November 23, 2025, compared to $1,774.7 million in the same period last year[41] - Total current assets decreased to $5,071.1 million as of November 23, 2025, from $7,381.4 million a year earlier[38] - Total liabilities decreased to $23,220.2 million as of November 23, 2025, compared to $23,946.9 million in the previous year[38] Restructuring and Charges - Restructuring and other exit costs totaled $122 million in the second quarter, significantly higher than $1 million a year ago[23] - Restructuring, transformation, and impairment charges totaled $125.1 million for the six-month period ended November 23, 2025[46] - The company recorded a $53 million non-cash impairment charge related to the Uncle Toby's brand intangible asset in the second quarter of fiscal 2026[46] - Restructuring and transformation charges for the quarter ended Nov. 23, 2025, amounted to $72.2 million, contributing 1.5% to operating profit[74] Tax and Earnings - The effective tax rate for the second quarter was 23.3%, compared to 20.1% last year[24] - The effective tax rate for the six-month period ended November 23, 2025, was 24.9%, an increase of 4.0 percentage points from 20.9% in the same period last year[50] - Diluted earnings per share for the six-month period ended November 23, 2025, were $3.00, a 22% increase from $2.45 in the same period last year[71] - Unallocated corporate expense totaled $214 million for the six-month period ended November 23, 2025, up from $189 million in the same period last year[49] Acquisitions and Divestitures - The company recorded a pre-tax gain of $1,046 million from the sale of its United States yogurt business to Groupe Lactalis S.A. in the first quarter of fiscal 2026[47] - The acquisition of NX Pet Holding, Inc. for $1 billion resulted in goodwill of $1,087 million and an indefinite-lived intangible asset for the Tiki Pets brand totaling $289 million[44] - The company recorded $14 million in transaction costs related to the sale of its United States yogurt business in the six-month period ended November 23, 2025[49] - The company experienced a divestiture gain of $1,054.4 million, which negatively impacted the operating profit margin by 11.2% for the six-month period ended Nov. 23, 2025[76]