- Net sales of $5.1 billion were down 2 percent in the second
quarter and organic net sales1 were also down 2 percent; on a
2-year compound growth basis, net sales were up 1 percent and
organic net sales were up 4 percent
- Operating profit of $812 million was up 2 percent; adjusted
operating profit of $989 million increased 13 percent in constant
currency
- Diluted earnings per share (EPS) of $1.02 was up 1 percent;
adjusted diluted EPS of $1.25 increased 14 percent in constant
currency
- Company updates full-year fiscal 2024 outlook to reflect
expectations for slower volume recovery and greater Holistic Margin
Management (HMM) cost savings
¹ Please see Note 7 to the Consolidated Financial Statements
below for reconciliation of this and other non-GAAP measures used
in this release.
General Mills, Inc. (NYSE: GIS) today reported results for its
fiscal 2024 second quarter.
“While we saw a slower-than-expected volume recovery in the
second quarter amid a continued challenging consumer landscape, we
generated bottom-line growth thanks primarily to strong HMM cost
savings,” said General Mills Chairman and Chief Executive Officer
Jeff Harmening. “We’re adapting our plans to the evolving consumer
environment and staying focused on driving long-term growth, with a
priority on winning through innovation, brand building, and
in-store execution. At the same time, we’re stepping up our HMM
performance and further eliminating disruption-related costs in the
supply chain. For the full year, we’ve revised our topline outlook
to account for a slower volume recovery, narrowed our profit and
EPS expectations within our original guidance ranges, and
maintained our outlook for strong free cash flow conversion.”
General Mills is executing its Accelerate strategy to drive
sustainable, profitable growth and top-tier shareholder returns
over the long term. The strategy focuses on four pillars to create
competitive advantages and win: boldly building brands,
relentlessly innovating, unleashing scale, and standing for good.
The company is prioritizing its core markets, global platforms, and
local gem brands that have the best prospects for profitable growth
and is committed to reshaping its portfolio with strategic
acquisitions and divestitures to further enhance its growth
profile.
Second Quarter Results
Summary
- Net sales were down 2 percent to $5.1 billion, with
lower pound volume partially offset by favorable net price
realization and mix. Organic net sales were 2 percent below
year-ago results that grew double digits; organic net sales were up
4 percent on a 2-year compound growth basis.
- Gross margin was up 170 basis points to 34.4 percent of
net sales, driven by HMM cost savings and favorable net price
realization and mix, partially offset by input cost inflation,
higher other supply chain costs, and supply chain deleverage.
Adjusted gross margin was up 180 basis points to 35.0 percent of
net sales, driven primarily by HMM cost savings and favorable net
price realization and mix, partially offset by input cost
inflation, higher other supply chain costs, and supply chain
deleverage.
- Operating profit of $812 million was up 2 percent,
driven by higher gross profit dollars and lower compensation and
benefits expenses, partially offset by a goodwill impairment charge
related to the Latin America reporting unit. Operating profit
margin of 15.8 percent was up 50 basis points. Adjusted
operating profit of $989 million increased 13 percent in constant
currency, driven by higher adjusted gross profit dollars and lower
compensation and benefits expenses. Adjusted operating profit
margin was up 240 basis points to 19.3 percent.
- Net earnings attributable to General Mills of $596
million were down 2 percent. Diluted EPS was up 1 percent to
$1.02, driven primarily by higher operating profit and lower net
shares outstanding, partially offset by higher net interest
expense. Adjusted diluted EPS of $1.25 was up 14 percent in
constant currency, driven primarily by higher adjusted operating
profit and lower net shares outstanding, partially offset by higher
net interest expense.
Six Month Results
Summary
- Net sales increased 1 percent to $10.0 billion, driven
by favorable net price realization and mix, partially offset by
lower pound volume. Organic net sales were 1 percent above year-ago
results that grew double digits; organic net sales were up 6
percent on a 2-year compound growth basis.
- Gross margin was up 350 basis points to 35.2 percent of
net sales, driven by favorable net price realization and mix, HMM
cost savings, and favorable mark-to-market effects, partially
offset by input cost inflation, higher other supply chain costs,
and supply chain deleverage. Adjusted gross margin was up 120 basis
points to 35.2 percent of net sales, driven by favorable net price
realization and mix and HMM cost savings, partially offset by input
cost inflation, higher other supply chain costs, and supply chain
deleverage.
- Operating profit of $1.7 billion was down 8 percent,
driven primarily by net gains on divestitures in the prior year and
a goodwill impairment charge related to the Latin America reporting
unit, partially offset by higher gross profit dollars. Operating
profit margin of 17.3 percent was down 170 basis points.
Adjusted operating profit of $1.9 billion increased 7 percent in
constant currency, driven by higher adjusted gross profit dollars,
partially offset by higher adjusted selling, general, and
administrative (SG&A) expenses, including a high-single-digit
increase in media investment. Adjusted operating profit margin was
up 110 basis points to 18.8 percent.
- Net earnings attributable to General Mills were down 11
percent to $1.3 billion and diluted EPS was down 8 percent
to $2.16, driven primarily by lower operating profit and higher net
interest expense, partially offset by lower net shares outstanding.
Adjusted diluted EPS of $2.34 was up 6 percent in constant
currency, driven primarily by higher adjusted operating profit and
lower net shares outstanding, partially offset by higher net
interest expense and a higher adjusted effective tax rate.
Notes on Comparability
The following transactions impacted the comparability of
year-to-date financial results between fiscal 2023 and fiscal 2024:
the acquisition of the TNT Crust foodservice business in the first
quarter of fiscal 2023 and the divestiture of the Helper main meals
and Suddenly Salad side dishes business in the first quarter of
fiscal 2023. In addition, results in the first half of fiscal 2023
included the impact of a voluntary recall on certain international
Häagen-Dazs ice cream products, which was a headwind to net sales
and operating profit results in the International segment.
Operating Segment
Results
Note: Tables may not foot due to rounding.
Components of Fiscal 2024
Reported Net Sales Growth
Second Quarter
Volume
Price/Mix
Foreign
Exchange
Reported
Net Sales
North America Retail
(5) pts
4 pts
--
(2)%
Pet
(11) pts
7 pts
--
(4)%
North America Foodservice
(1) pt
--
--
Flat
International
(4) pts
3 pts
2 pts
2%
Total
(4) pts
3 pts
--
(2)%
Six Months
North America Retail
(5) pts
6 pts
--
Flat
Pet
(8) pts
6 pts
--
(2)%
North America Foodservice
3 pt
1 pt
--
4%
International
(4) pts
8 pts
2 pts
6%
Total
(3) pts
4 pts
--
1%
Components of Fiscal 2024
Organic Net Sales Growth
Second Quarter
Organic
Volume
Organic
Price/Mix
Organic
Net Sales
Foreign
Exchange
Acquisitions &
Divestitures
Reported
Net Sales
North America Retail
(5) pts
4 pts
(2)%
--
--
(2)%
Pet
(11) pts
7 pts
(4)%
--
--
(4)%
North America Foodservice
(1) pt
1 pt
Flat
--
--
Flat
International
(4) pts
3 pts
Flat
2 pts
--
2%
Total
(4) pts
3 pts
(2)%
--
--
(2)%
Six Months
North America Retail
(5) pts
6 pts
1%
--
(1) pt
Flat
Pet
(8) pts
6 pts
(2)%
--
--
(2)%
North America Foodservice
1 pt
--
2%
--
2 pts
4%
International
(4) pts
8 pts
4%
2 pts
--
6%
Total
(3) pts
5 pts
1%
--
--
1%
Fiscal 2024 Segment Operating
Profit Growth
Second Quarter
% Change as Reported
% Change in Constant
Currency
North America Retail
3%
3%
Pet
18%
18%
North America Foodservice
17%
17%
International
94%
100%
Total
7%
7%
Six Months
North America Retail
3%
3%
Pet
2%
2%
North America Foodservice
14%
14%
International
61%
68%
Total
5%
5%
North America Retail Segment
Second-quarter net sales for General Mills’ North America Retail
segment were down 2 percent to $3.3 billion, driven by lower pound
volume, partially offset by favorable net price realization and
mix. Organic net sales were 2 percent below year-ago results that
grew double digits; organic net sales were up 5 percent on a 2-year
compound growth basis. Net sales performance outpaced
Nielsen-measured retail sales growth in the quarter due to faster
growth in non-measured channels. Net sales were down mid-single
digits for the U.S. Snacks and U.S. Morning Foods operating units.
Net sales were up low-single digits for U.S. Meals & Baking
Solutions and were up high-single digits for Canada. Segment
operating profit of $860 million was up 3 percent as reported and
in constant currency, driven primarily by favorable net price
realization and mix and HMM cost savings, partially offset by lower
volume, input cost inflation, higher other supply chain costs,
supply chain deleverage, and higher SG&A expenses.
Through six months, North America Retail segment net sales of
$6.4 billion essentially matched year-ago levels, including a
1-point headwind from divestitures. Organic net sales were up 1
percent. Segment operating profit of $1.7 billion was up 3 percent
as reported and in constant currency, driven primarily by favorable
net price realization and mix and HMM cost savings, partially
offset by input cost inflation, lower volume, higher other supply
chain costs, higher SG&A expenses, and supply chain
deleverage.
Pet Segment
Second-quarter net sales for the Pet segment were down 4 percent
to $569 million, driven by lower pound volume, partially offset by
favorable net price realization and mix. Organic net sales were
also down 4 percent. Net sales performance lagged all-channel
retail sales results by roughly 2 points, despite the comparison to
the year-ago quarter that included a significant retailer inventory
reduction. Relative to fiscal 2022, second-quarter net sales were
down mid-single digits and all-channel retail sales were up
mid-single digits. Net sales in the quarter were down mid-single
digits for dry pet food, down double digits for wet pet food, and
up double digits for pet treats compared to the prior year. Segment
operating profit of $102 million was up 18 percent, driven
primarily by favorable net price realization and mix and HMM cost
savings, partially offset by lower volume, higher other supply
chain costs, and higher SG&A expenses.
Through six months, Pet segment net sales were down 2 percent to
$1.1 billion. Organic net sales were also down 2 percent. Segment
operating profit was up 2 percent to $214 million, driven primarily
by favorable net price realization and mix and HMM cost savings,
partially offset by higher other supply chain costs, lower volume,
input cost inflation, higher SG&A expenses, and supply chain
deleverage.
North America Foodservice
Segment
Second-quarter net sales for the North America Foodservice
segment essentially matched year-ago levels at $582 million.
Organic net sales were in line with last year despite a 2-point
headwind from market index pricing on bakery flour. Segment
operating profit increased 17 percent to $96 million, driven
primarily by HMM cost savings and favorable net price realization
and mix, partially offset by higher other supply chain costs.
Through six months, North America Foodservice net sales
increased 4 percent to $1.1 billion, including a 2-point benefit
from the TNT Crust acquisition. Organic net sales were up 2
percent. Segment operating profit was up 14 percent to $155
million, driven by favorable net price realization and mix and HMM
cost savings, partially offset by higher other supply chain costs
and higher SG&A expenses.
International Segment
Second-quarter net sales for the International segment increased
2 percent to $683 million, driven by favorable net price
realization and mix and a 2-point benefit from foreign currency
exchange, partially offset by lower pound volume. Organic net sales
essentially matched year-ago levels, with a decline in Brazil
offset by growth in distributor markets and Europe & Australia.
Segment operating profit of $35 million was up 94 percent as
reported and up 100 percent in constant currency from year-ago
results that included the impact of the ice cream recall, driven by
favorable net price realization and mix and HMM cost savings,
partially offset by input cost inflation.
Through six months, International net sales increased 6 percent
to $1.4 billion, including a 2-point benefit from foreign currency
exchange. Organic net sales were up 4 percent. Segment operating
profit of $85 million was up 61 percent as reported and up 68
percent in constant currency from year-ago results that included
the impact of the ice cream recall, driven by favorable net price
realization and mix and HMM cost savings, partially offset by input
cost inflation and lower volume.
Joint Venture Summary
Second-quarter constant-currency net sales increased 11 percent
for Cereal Partners Worldwide (CPW), driven by favorable net price
realization and mix, partially offset by lower pound volume.
Constant-currency net sales for Häagen-Dazs Japan (HDJ) were up 6
percent, driven by favorable net price realization and mix,
partially offset by lower pound volume. Combined after-tax earnings
from joint ventures of $24 million were down 5 percent, driven by
unfavorable foreign currency exchange, partially offset by
constant-currency after-tax earnings growth for HDJ.
Other Income Statement
Items
Second-quarter unallocated corporate items totaled $157 million
net expense in fiscal 2024 compared to $212 million net expense a
year ago. Excluding mark-to-market valuation effects and other
items affecting comparability, unallocated corporate items totaled
$103 million net expense this year compared to $142 million net
expense last year, driven primarily by lower compensation and
benefits expenses.
Restructuring, impairment, and other exit costs totaled $124
million in the second quarter compared to $11 million a year ago
(please see Note 3 below for more information on these charges).
Benefit plan non-service income totaled $20 million in the second
quarter compared to $22 million a year ago, driven primarily by an
increase in interest costs, partially offset by lower amortization
of losses and higher expected return on plan assets.
Net interest expense totaled $118 million in the second quarter
compared to $92 million a year ago, driven primarily by higher
interest rates and higher average long-term debt levels. The
effective tax rate in the quarter was 19.0 percent compared to 20.2
percent last year (please see Note 6 below for more information on
our effective tax rate). The second-quarter adjusted effective tax
rate was 20.8 percent compared to 21.1 percent a year ago, driven
primarily by favorable earnings mix by jurisdiction in fiscal
2024.
Cash Flow Generation and Cash
Returns
Cash provided by operating activities totaled $1.5 billion
through six months of fiscal 2024 compared to $1.2 billion a year
ago. Capital investments totaled $294 million compared to $227
million a year ago. Dividends paid increased 7 percent to $691
million. General Mills repurchased approximately 18.8 million
shares of common stock through six months of fiscal 2024 for a
total of $1.3 billion compared to $901 million in share repurchases
a year ago. Average diluted shares outstanding in the first half
decreased 3 percent to 587 million.
Fiscal 2024 Outlook
General Mills continues to expect the largest factors impacting
its performance in fiscal 2024 will be the economic health of
consumers, the moderating rate of input cost inflation, and the
increasing stability of the supply chain environment. Relative to
its previous expectation, the company now expects a slower volume
recovery in fiscal 2024, reflecting a more cautious consumer
economic outlook and a faster normalization of competitive on-shelf
availability. For the full year, the company continues to expect
input cost inflation of approximately 5 percent of total cost of
goods sold, driven primarily by labor inflation that impacts
sourcing, manufacturing, and logistics costs. The company now
expects to generate Holistic Margin Management (HMM) cost savings
of roughly 5 percent of cost of goods sold in fiscal 2024, up from
its previous expectation of 4 percent and higher than the 3 percent
achieved in fiscal 2023.
Based on the above assumptions, the company updated its
full-year fiscal 2024 financial targets²:
- Organic net sales are now expected to range between down
1 percent and flat, compared to the previous range of 3 to 4
percent growth, reflecting a slower volume recovery in fiscal
2024.
- Adjusted operating profit and adjusted diluted
EPS are now expected to increase 4 to 5 percent in constant
currency, compared to the previous range of 4 to 6 percent growth
in constant currency, reflecting the impact of lower organic sales
growth, largely offset by higher HMM cost savings and greater
elimination of disruption-related costs in the supply chain.
- Free cash flow conversion is still expected to be at
least 95 percent of adjusted after-tax earnings.
- The net impact of divestitures and foreign currency exchange is
now expected to have an immaterial impact on full-year reported net
sales growth, and foreign currency exchange is still expected to
have an immaterial impact on adjusted operating profit and adjusted
diluted EPS growth.
² Financial targets are provided on a non-GAAP basis because
certain information necessary to calculate comparable GAAP measures
is not available. Please see Note 7 to the Consolidated Financial
Statements below for discussion of the unavailable information.
General Mills will issue pre-recorded management remarks today,
December 20, 2023, at approximately 6:30 a.m. Central time (7:30
a.m. Eastern time) and will hold a live, webcasted question and
answer session beginning at 8:00 a.m. Central time (9:00 a.m.
Eastern time). The pre-recorded remarks and the webcast will be
made available at www.generalmills.com/investors.
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995
that are based on our current expectations and assumptions. These
forward-looking statements, including the statements under the
caption “Fiscal 2024 Outlook,” and statements made by Mr.
Harmening, are subject to certain risks and uncertainties that
could cause actual results to differ materially from the potential
results discussed in the forward-looking statements. In particular,
our predictions about future net sales and earnings could be
affected by a variety of factors, including: disruptions or
inefficiencies in the supply chain; competitive dynamics in the
consumer foods industry and the markets for our products, including
new product introductions, advertising activities, pricing actions,
and promotional activities of our competitors; economic conditions,
including changes in inflation rates, interest rates, tax rates, or
the availability of capital; product development and innovation;
consumer acceptance of new products and product improvements;
consumer reaction to pricing actions and changes in promotion
levels; acquisitions or dispositions of businesses or assets;
changes in capital structure; changes in the legal and regulatory
environment, including tax legislation, labeling and advertising
regulations, and litigation; impairments in the carrying value of
goodwill, other intangible assets, or other long-lived assets, or
changes in the useful lives of other intangible assets; changes in
accounting standards and the impact of significant accounting
estimates; product quality and safety issues, including recalls and
product liability; changes in consumer demand for our products;
effectiveness of advertising, marketing, and promotional programs;
changes in consumer behavior, trends, and preferences, including
weight loss trends; consumer perception of health-related issues,
including obesity; consolidation in the retail environment; changes
in purchasing and inventory levels of significant customers;
fluctuations in the cost and availability of supply chain
resources, including raw materials, packaging, energy, and
transportation; effectiveness of restructuring and cost saving
initiatives; volatility in the market value of derivatives used to
manage price risk for certain commodities; benefit plan expenses
due to changes in plan asset values and discount rates used to
determine plan liabilities; failure or breach of our information
technology systems; foreign economic conditions, including currency
rate fluctuations; and political unrest in foreign markets and
economic uncertainty due to terrorism or war. The company
undertakes no obligation to publicly revise any forward-looking
statement to reflect any future events or circumstances.
# # #
Consolidated Statements of
Earnings and Supplementary Information
GENERAL MILLS, INC. AND
SUBSIDIARIES
(Unaudited) (In Millions, Except
per Share Data)
Quarter Ended
Six-Month Period Ended
Nov. 26,
Nov. 27,
Nov. 26,
Nov. 27,
2023
2022
% Change
2023
2022
% Change
Net sales
$
5,139.4
$
5,220.7
(2
)
%
$
10,044.1
$
9,938.3
1
%
Cost of sales
3,373.5
3,515.6
(4
)
%
6,507.7
6,785.5
(4
)
%
Selling, general, and administrative
expenses
830.5
894.2
(7
)
%
1,669.8
1,685.6
(1
)
%
Divestitures gain, net
-
-
NM
-
(430.9
)
NM
Restructuring, impairment, and other
exit costs
123.6
11.1
NM
124.8
12.7
NM
Operating profit
811.8
799.8
2
%
1,741.8
1,885.4
(8
)
%
Benefit plan non-service income
(20.1
)
(21.7
)
(7
)
%
(37.1
)
(43.4
)
(15
)
%
Interest, net
117.8
91.5
29
%
234.8
179.2
31
%
Earnings before income taxes and
after-tax
earnings from joint ventures
714.1
730.0
(2
)
%
1,544.1
1,749.6
(12
)
%
Income taxes
136.0
147.1
(8
)
%
309.2
363.2
(15
)
%
After-tax earnings from joint ventures
24.2
25.4
(5
)
%
47.7
45.2
6
%
Net earnings, including earnings
attributable
to noncontrolling interests
602.3
608.3
(1
)
%
1,282.6
1,431.6
(10
)
%
Net earnings attributable to
noncontrolling interests
6.8
2.4
183
%
13.6
5.7
139
%
Net earnings attributable to General
Mills
$
595.5
$
605.9
(2
)
%
$
1,269.0
$
1,425.9
(11
)
%
Earnings per share – basic
$
1.03
$
1.01
2
%
$
2.18
$
2.38
(8
)
%
Earnings per share – diluted
$
1.02
$
1.01
1
%
$
2.16
$
2.36
(8
)
%
Quarter Ended
Six-Month Period Ended
Nov. 26,
Nov. 27,
Basis Pt
Nov. 26,
Nov. 27,
Basis Pt
Comparisons as a % of net sales:
2023
2022
Change
2023
2022
Change
Gross margin
34.4
%
32.7
%
170
35.2
%
31.7
%
350
Selling, general, and administrative
expenses
16.2
%
17.1
%
(90
)
16.6
%
17.0
%
(40
)
Operating profit
15.8
%
15.3
%
50
17.3
%
19.0
%
(170
)
Net earnings attributable to General
Mills
11.6
%
11.6
%
-
12.6
%
14.3
%
(170
)
Quarter Ended
Six-Month Period Ended
Comparisons as a % of net sales
excluding
Nov. 26,
Nov. 27,
Basis Pt
Nov. 26,
Nov. 27,
Basis Pt
certain items affecting comparability
(a):
2023
2022
Change
2023
2022
Change
Adjusted gross margin
35.0
%
33.2
%
180
35.2
%
34.0
%
120
Adjusted operating profit
19.3
%
16.9
%
240
18.8
%
17.7
%
110
Adjusted net earnings attributable to
General Mills
14.1
%
12.7
%
140
13.7
%
13.4
%
30
(a) See Note 7 for a reconciliation of
these measures not defined by generally accepted accounting
principles (GAAP).
See accompanying notes to consolidated
financial statements.
Operating Segment Results and
Supplementary Information
GENERAL MILLS, INC. AND
SUBSIDIARIES
(Unaudited) (In Millions)
Quarter Ended
Six-Month Period Ended
Nov. 26,
2023
Nov. 27,
2022
% Change
Nov. 26,
2023
Nov. 27,
2022
% Change
Net sales:
North America Retail
$
3,305.0
$
3,373.1
(2
)
%
$
6,378.0
$
6,361.9
Flat
International
683.1
671.7
2
%
1,398.9
1,324.2
6
%
Pet
569.3
592.9
(4
)
%
1,149.2
1,172.8
(2
)
%
North America Foodservice
582.0
583.0
Flat
1,118.0
1,079.4
4
%
Total
$
5,139.4
$
5,220.7
(2
)
%
$
10,044.1
$
9,938.3
1
%
Operating profit:
North America Retail
$
859.9
$
837.1
3
%
$
1,658.1
$
1,614.9
3
%
International
34.6
17.8
94
%
84.6
52.6
61
%
Pet
102.5
86.6
18
%
213.7
209.7
2
%
North America Foodservice
95.5
81.5
17
%
154.6
135.1
14
%
Total segment operating profit
$
1,092.5
$
1,023.0
7
%
2,111.0
$
2,012.3
5
%
Unallocated corporate items
157.1
212.1
(26
)
%
244.4
545.1
(55
)
%
Divestitures gain, net
-
-
NM
-
(430.9
)
NM
Restructuring, impairment, and other
exit costs
123.6
11.1
NM
124.8
12.7
NM
Operating profit
$
811.8
$
799.8
2
%
$
1,741.8
$
1,885.4
(8
)
%
Quarter Ended
Six-Month Period Ended
Nov. 26,
2023
Nov. 27,
2022
Basis Pt
Change
Nov. 26,
2023
Nov. 27,
2022
Basis Pt
Change
Segment operating profit as a % of net
sales:
North America Retail
26.0
%
24.8
%
120
26.0
%
25.4
%
60
International
5.1
%
2.6
%
250
6.0
%
4.0
%
200
Pet
18.0
%
14.6
%
340
18.6
%
17.9
%
70
North America Foodservice
16.4
%
14.0
%
240
13.8
%
12.5
%
130
Total segment operating profit
21.3
%
19.6
%
170
21.0
%
20.2
%
80
See accompanying notes to consolidated
financial statements.
Consolidated Balance
Sheets
GENERAL MILLS, INC. AND
SUBSIDIARIES
(In Millions, Except Par
Value)
Nov. 26, 2023
Nov. 27, 2022
May 28, 2023
(Unaudited)
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents
$
593.8
$
644.1
$
585.5
Receivables
1,758.8
1,834.0
1,683.2
Inventories
2,166.0
2,121.3
2,172.0
Prepaid expenses and other current
assets
527.0
731.2
735.7
Total current assets
5,045.6
5,330.6
5,176.4
Land, buildings, and equipment
3,598.9
3,358.0
3,636.2
Goodwill
14,441.8
14,476.0
14,511.2
Other intangible assets
6,963.3
6,974.8
6,967.6
Other assets
1,183.8
1,180.4
1,160.3
Total assets
$
31,233.4
$
31,319.8
$
31,451.7
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable
$
3,824.4
$
4,022.6
$
4,194.2
Current portion of long-term debt
1,321.0
1,964.3
1,709.1
Notes payable
799.2
1,153.4
31.7
Other current liabilities
1,957.6
2,067.9
1,600.7
Total current liabilities
7,902.2
9,208.2
7,535.7
Long-term debt
10,530.5
8,622.5
9,965.1
Deferred income taxes
2,026.6
2,186.9
2,110.9
Other liabilities
1,142.2
930.1
1,140.0
Total liabilities
21,601.5
20,947.7
20,751.7
Stockholders' equity:
Common stock, 754.6 shares issued, $0.10
par value
75.5
75.5
75.5
Additional paid-in capital
1,201.8
1,155.3
1,222.4
Retained earnings
20,080.9
18,991.9
19,838.6
Common stock in treasury, at cost, shares
of 185.7, 164.4, and 168.0
(9,677.4
)
(8,023.5
)
(8,410.0
)
Accumulated other comprehensive loss
(2,302.0
)
(2,078.0
)
(2,276.9
)
Total stockholders' equity
9,378.8
10,121.2
10,449.6
Noncontrolling interests
253.1
250.9
250.4
Total equity
9,631.9
10,372.1
10,700.0
Total liabilities and equity
$
31,233.4
$
31,319.8
$
31,451.7
See accompanying notes to consolidated
financial statements.
Consolidated Statements of
Cash Flows
GENERAL MILLS, INC. AND
SUBSIDIARIES
(Unaudited) (In Millions)
Six-Month Period Ended
Nov. 26, 2023
Nov. 27, 2022
Cash Flows - Operating Activities
Net earnings, including earnings
attributable to noncontrolling interests
$
1,282.6
$
1,431.6
Adjustments to reconcile net earnings to
net cash provided by operating activities:
Depreciation and amortization
265.8
273.9
After-tax earnings from joint ventures
(47.7
)
(45.2
)
Distributions of earnings from joint
ventures
23.5
26.5
Stock-based compensation
58.5
57.6
Deferred income taxes
(58.7
)
(48.1
)
Pension and other postretirement benefit
plan contributions
(12.5
)
(12.7
)
Pension and other postretirement benefit
plan costs
(13.5
)
(13.5
)
Divestitures gain, net
-
(430.9
)
Restructuring, impairment, and other exit
costs
123.1
(13.7
)
Changes in current assets and liabilities,
excluding the effects of
acquisitions and divestitures
(166.1
)
(64.4
)
Other, net
40.8
39.6
Net cash provided by operating
activities
1,495.8
1,200.7
Cash Flows - Investing Activities
Purchases of land, buildings, and
equipment
(293.9
)
(226.7
)
Acquisition, net of cash acquired
(25.5
)
(251.5
)
Proceeds from divestitures, net of cash
divested
-
610.7
Investments in affiliates, net
(1.5
)
(1.4
)
Proceeds from disposal of land, buildings,
and equipment
0.1
0.5
Other, net
4.6
(6.5
)
Net cash (used) provided by investing
activities
(316.2
)
125.1
Cash Flows - Financing Activities
Change in notes payable
766.9
353.4
Issuance of long-term debt
500.0
500.0
Payment of long-term debt
(400.0
)
(600.0
)
Proceeds from common stock issued on
exercised options
5.7
118.5
Purchases of common stock for treasury
(1,301.4
)
(901.3
)
Dividends paid
(691.0
)
(647.9
)
Distributions to noncontrolling interest
holders
(12.0
)
(4.8
)
Other, net
(41.8
)
(48.4
)
Net cash used by financing activities
(1,173.6
)
(1,230.5
)
Effect of exchange rate changes on cash
and cash equivalents
2.3
(20.6
)
Increase in cash and cash equivalents
8.3
74.7
Cash and cash equivalents - beginning of
year
585.5
569.4
Cash and cash equivalents - end of
period
$
593.8
$
644.1
Cash Flow from changes in current assets
and liabilities, excluding the effects of
acquisitions and divestitures:
Receivables
$
(69.2
)
$
(200.8
)
Inventories
13.8
(278.5
)
Prepaid expenses and other current
assets
209.0
62.9
Accounts payable
(329.1
)
112.5
Other current liabilities
9.4
239.5
Changes in current assets and
liabilities
$
(166.1
)
$
(64.4
)
See accompanying notes to consolidated
financial statements.
GENERAL MILLS, INC. AND
SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS
(Unaudited)
(1)
The accompanying Consolidated Financial
Statements of General Mills, Inc. (we, us, our, General Mills, or
the Company) have been prepared in accordance with accounting
principles generally accepted in the United States for annual and
interim financial information. In the opinion of management, all
adjustments considered necessary for a fair presentation have been
included and are of a normal recurring nature.
(2)
During the first quarter of fiscal 2023,
we acquired TNT Crust, a manufacturer of high-quality frozen pizza
crusts for regional and national pizza chains, foodservice
distributors, and retail outlets, for a purchase price of $253
million. We financed the transaction with U.S. commercial paper. We
consolidated the TNT Crust business into our Consolidated Balance
Sheets and recorded goodwill of $157 million. The goodwill is
included in the North America Foodservice segment and is not
deductible for tax purposes. The pro forma effects of this
acquisition were not material.
During the first quarter of fiscal 2023,
we completed the asset sale of our Helper main meals and Suddenly
Salad side dishes business to Eagle Family Foods Group for $607
million and recorded a pre-tax gain of $442 million.
(3)
Restructuring and impairment charges and
project-related costs are recorded in our Consolidated Statement of
Earnings as follows:
Quarter Ended
Six-Month Period Ended
In Millions
Nov. 26, 2023
Nov. 27, 2022
Nov. 26, 2023
Nov. 27, 2022
Restructuring, impairment, and other exit
costs
$
123.6
$
11.1
$
124.8
$
12.7
Cost of sales
8.3
0.5
16.9
1.2
Total restructuring and impairment
charges
$
131.9
$
11.6
$
141.7
$
13.9
Project-related costs classified in cost
of sales
$
0.3
$
-
$
1.1
$
-
In the second quarter of fiscal 2024, we
recorded a $117 million non-cash goodwill impairment charge related
to our Latin America reporting unit.
In the second quarter of fiscal 2024, we
approved a restructuring action to enhance the go-to-market
commercial strategy and associated organizational structure of our
Pet segment. We expect to incur approximately $22 million of
restructuring charges and project-related expenses related to this
action, of which approximately $4 million will be cash. These
charges are expected to consist of approximately $16 million of
accelerated depreciation and $6 million of other costs, including
severance. We recognized $2 million of accelerated depreciation and
$3 million of other costs, including severance, in the six-month
period ended November 26, 2023. We expect this action to be
completed by the end of fiscal 2026.
We recorded $10 million of restructuring
charges in the second quarter of fiscal 2024 and $20 million of
restructuring charges in the six-month period ended November 26,
2023, related to restructuring actions previously announced. We
recorded $12 million of restructuring charges in the second quarter
of fiscal 2023 and $14 million of restructuring charges in the
six-month period ended November 27, 2022, related to restructuring
actions previously announced. We expect these actions to be
completed by the end of fiscal 2025.
(4)
Unallocated corporate expenses totaled
$157 million in the second quarter of fiscal 2024, compared to $212
million in the same period in fiscal 2023. In the second quarter of
fiscal 2024, we recorded a $25 million net increase in expense
related to the mark-to-market valuation of certain commodity
positions and grain inventories, compared to a $25 million net
increase in expense in the same period last year. We recorded $20
million of net losses related to valuation adjustments on certain
corporate investments in the second quarter of fiscal 2024,
compared to $36 million of net losses related to valuation
adjustments and the loss on sale of certain corporate investments
in the second quarter of fiscal 2023. We recorded $8 million of
restructuring charges in the second quarter of fiscal 2024. In the
second quarter of fiscal 2023, we recorded a $3 million charge
related to a voluntary recall on certain international Häagen-Dazs
ice cream products. In addition, we recorded $3 million of
integration costs primarily related to our acquisition of TNT Crust
and $2 million of transaction costs primarily related to the sale
of our Helper main meals and Suddenly Salad side dishes business in
the second quarter of fiscal 2023. Certain compensation and
benefits expenses decreased in the second quarter of fiscal 2024,
compared to the same period last year.
Unallocated corporate expenses totaled
$244 million in the six-month period ended November 26, 2023,
compared to $545 million in the same period last year. We recorded
a $20 million net decrease in expense related to the mark-to-market
valuation of certain commodity positions and grain inventories in
the six-month period ended November 26, 2023, compared to a $200
million net increase in expense in the same period last year. We
recorded $22 million of net losses related to valuation adjustments
and the sale of corporate investments in the six-month period ended
November 26, 2023, compared to $62 million of net losses in the
same period last year. In the six-month period ended November 27,
2022, we recorded a $24 million charge related to a voluntary
recall on certain international Häagen-Dazs ice cream products. We
recorded $17 million of restructuring charges and $1 million of
restructuring initiative project-related costs in cost of sales in
the six-month period ended November 26, 2023, compared to $1
million of restructuring charges in cost of sales in the same
period last year. In addition, we recorded $4 million of
integration costs primarily related to our acquisition of TNT Crust
and $2 million of transaction costs primarily related to the sale
of our Helper main meals and Suddenly Salad side dishes business in
the six-month period ended November 27, 2022. Certain compensation
and benefits expenses decreased in the six-month period ended
November 26, 2023, compared to the same period last year.
(5)
Basic and diluted earnings per share (EPS)
were calculated as follows:
Quarter Ended
Six-Month Period Ended
In Millions, Except per Share
Data
Nov. 26, 2023
Nov. 27, 2022
Nov. 26, 2023
Nov. 27, 2022
Net earnings attributable to General
Mills
$
595.5
$
605.9
$
1,269.0
$
1,425.9
Average number of common shares - basic
EPS
580.1
595.9
583.2
598.0
Incremental share effect from: (a)
Stock options
1.4
3.7
2.1
3.6
Restricted stock units and performance
share units
1.9
2.4
2.1
2.4
Average number of common shares - diluted
EPS
583.4
602.0
587.4
604.0
Earnings per share – basic
$
1.03
$
1.01
$
2.18
$
2.38
Earnings per share – diluted
$
1.02
$
1.01
$
2.16
$
2.36
(a) Incremental shares from stock options,
restricted stock units, and performance share units are computed by
the treasury stock method.
(6)
The effective tax rate for the second
quarter of fiscal 2024 was 19.0 percent compared to 20.2 percent
for the second quarter of fiscal 2023. The 1.2 percentage point
decrease was primarily due to favorable changes in earnings mix by
jurisdiction and certain nonrecurring discrete tax benefits in the
second quarter of fiscal 2024. Our effective tax rate excluding
certain items affecting comparability was 20.8 percent in the
second quarter of fiscal 2024, compared to 21.1 percent in the same
period last year (see Note 7 below for a description of our use of
measures not defined by GAAP). The 0.3 percentage point decrease
was primarily due to favorable earnings mix by jurisdiction in the
second quarter of fiscal 2024.
The effective tax rate for the six-month
period ended November 26, 2023, was 20.0 percent compared to 20.8
percent for the six-month period ended November 27, 2022. The 0.8
percentage point decrease was primarily due to unfavorable tax
components related to the divestitures in fiscal 2023 and favorable
earnings mix by jurisdiction in fiscal 2024, partially offset by
certain nonrecurring discrete tax benefits in fiscal 2023. Our
effective tax rate excluding certain items affecting comparability
was 21.0 percent in the six-month period ended November 26, 2023,
compared to 20.4 percent in the same period last year (see Note 7
below for a description of our use of measures not defined by
GAAP). The 0.6 percentage point increase was primarily due to
certain nonrecurring discrete tax benefits in fiscal 2023.
(7)
We have included measures in this release
that are not defined by GAAP. We believe that these measures
provide useful information to investors, and include these measures
in other communications to investors. For each of these non-GAAP
financial measures, we are providing below a reconciliation of the
differences between the non-GAAP measure and the most directly
comparable GAAP measure, an explanation of why we believe the
non-GAAP measure provides useful information to investors and any
additional material purposes for which our management or Board of
Directors uses the non-GAAP measure. These non-GAAP measures should
be viewed in addition to, and not in lieu of, the comparable GAAP
measure.
We provide organic net sales growth rates
for our consolidated net sales and segment net sales. This measure
is used in reporting to our Board of Directors and executive
management and as a component of the Board of Directors’
measurement of our performance for incentive compensation purposes.
We believe that organic net sales growth rates provide useful
information to investors because they provide transparency to
underlying performance in our net sales by excluding the effect
that foreign currency exchange rate fluctuations, acquisitions,
divestitures, and a 53rd fiscal week, when applicable, have on
year-to-year comparability. A reconciliation of these measures to
reported net sales growth rates, the relevant GAAP measures, are
included in our Operating Segment Results above.
Certain measures in this release are
presented excluding the impact of foreign currency exchange
(constant-currency). To present this information, current period
results for entities reporting in currencies other than United
States dollars are translated into United States dollars at the
average exchange rates in effect during the corresponding period of
the prior fiscal year, rather than the actual average exchange
rates in effect during the current fiscal year. Therefore, the
foreign currency impact is equal to current year results in local
currencies multiplied by the change in the average foreign currency
exchange rate between the current fiscal period and the
corresponding period of the prior fiscal year. We believe that
these constant-currency measures provide useful information to
investors because they provide transparency to underlying
performance by excluding the effect that foreign currency exchange
rate fluctuations have on period-to-period comparability given
volatility in foreign currency exchange markets.
Our fiscal 2024 outlook for organic net
sales growth, adjusted operating profit growth, adjusted diluted
EPS growth, and free cash flow conversion are non-GAAP financial
measures that exclude, or have otherwise been adjusted for, items
impacting comparability, including the effect of foreign currency
exchange rate fluctuations, acquisitions, divestitures, and a 53rd
week, when applicable. We are not able to reconcile these
forward-looking non-GAAP financial measures to their most directly
comparable forward-looking GAAP financial measure without
unreasonable efforts because we are unable to predict with a
reasonable degree of certainty the actual impact of changes in
foreign currency exchange rates or the timing of acquisitions and
divestitures throughout fiscal 2024. The unavailable information
could have a significant impact on our fiscal 2024 GAAP financial
results.
For fiscal 2024, we currently expect:
foreign currency exchange rates (based on a blend of forward and
forecasted rates and hedge positions) and acquisitions and
divestitures will have no material impact to net sales growth and
restructuring charges to total approximately $45 million to $50
million.
Significant Items Impacting Comparability
Several measures below are presented on an adjusted basis. The
adjustments are either items resulting from infrequently occurring
events or items that, in management’s judgement, significantly
affect the year-to-year assessment of operating results.
The following are descriptions of significant items impacting
comparability of our results.
Goodwill
impairment Non-cash goodwill impairment charge related to
our Latin America reporting unit. Please see Note 3.
Restructuring charges
and project-related costs Restructuring charges and
project-related costs related to a commercial strategy
restructuring action and previously announced restructuring actions
recorded in fiscal 2024. Restructuring charges for previously
announced restructuring actions recorded in fiscal 2023. Please see
Note 3.
Investment activity,
net Valuation adjustments of certain corporate investments
in fiscal 2024. Valuation adjustments and the loss on sale of
certain corporate investments in fiscal 2023. Please see Note
4.
Mark-to-market
effects Net mark-to-market valuation of certain commodity
positions recognized in unallocated corporate items. Please see
Note 4.
Transaction
costs Immaterial transaction costs incurred in fiscal 2024.
Transaction costs primarily related to the sale of our Helper main
meals and Suddenly Salad side dishes business in fiscal 2023.
Please see Note 2.
Product recall
Costs related to the fiscal 2023 voluntary recall of certain
international Häagen-Dazs ice cream products. Please see Note
4.
Acquisition integration
costs Integration costs primarily resulting from the
acquisition of TNT Crust in fiscal 2024 and fiscal 2023. Please see
Note 2.
Divestitures gain,
net Net divestitures gain primarily related to the sale of
our Helper main meals and Suddenly Salad side dishes business in
fiscal 2023. Please see Note 2.
CPW restructuring
charges CPW restructuring charges related to previously
announced restructuring actions.
Organic Net Sales on a 2-year Compound
Growth Rate Basis
We believe that this measure provides useful information to
investors as it compares our organic net sales growth in fiscal
2024 to performance in fiscal 2022 that preceded historic levels of
input cost inflation and net price realization the industry
experienced over the past two years.
Organic net sales on a 2-year compound growth rate basis are
calculated as follows:
Quarter Ended
Reported Net
Sales Growth
Foreign
Exchange
Acquisitions
and Divestitures
Organic
Net Sales
Total
Nov. 26, 2023 vs. Nov. 27, 2022
(2
)
%
-
-
(2
)
%
Nov. 27, 2022 vs. Nov. 28, 2021
4
%
(1
)
pt
(5
)
pts
11
%
2-year compound growth
1
%
4
%
North America Retail
Nov. 26, 2023 vs. Nov. 27, 2022
(2
)
%
-
-
(2
)
%
Nov. 27, 2022 vs. Nov. 28, 2021
11
%
(1
)
pt
(2
)
pts
13
%
2-year compound growth
4
%
5
%
Note: Tables may not foot due to
rounding.
Six-Month Period
Reported Net
Sales Growth
Foreign
Exchange
Acquisitions
and Divestitures
Organic
Net Sales
Total
Nov. 26, 2023 vs. Nov. 27, 2022
1
%
-
-
1
%
Nov. 27, 2022 vs. Nov. 28, 2021
4
%
(1
)
pt
(5
)
pts
11
%
2-year compound growth
2
%
6
%
Note: Table may not foot due to
rounding.
Adjusted Operating Profit Growth on a
Constant-currency Basis
This measure is used in reporting to our Board of Directors and
executive management and as a component of the measurement of our
performance for incentive compensation purposes. We believe that
this measure provides useful information to investors because it is
the operating profit measure we use to evaluate operating profit
performance on a comparable year-to-year basis. The measure is
evaluated on a constant-currency basis by excluding the effect that
foreign currency exchange rate fluctuations have on year-to-year
comparability given the volatility in foreign currency exchange
rates.
Our adjusted operating profit growth on a constant-currency
basis is calculated as follows:
Quarter Ended
Six-Month Period Ended
Nov. 26, 2023
Nov. 27, 2022
Change
Nov. 26, 2023
Nov. 27, 2022
Change
Operating profit as reported
$
811.8
$
799.8
2
%
$
1,741.8
$
1,885.4
(8
)
%
Goodwill impairment
117.1
-
117.1
-
Restructuring charges
14.8
11.6
24.6
13.9
Investment activity, net
19.6
35.7
22.5
62.0
Mark-to-market effects
25.1
25.1
(19.8
)
199.8
Project-related costs
0.3
-
1.1
-
Transaction costs
0.6
1.8
0.6
2.0
Product recall
0.2
2.9
0.4
24.4
Acquisition integration costs
-
2.8
0.2
4.3
Divestitures gain, net
-
-
-
(430.9
)
Adjusted operating profit
$
989.4
$
879.7
12
%
$
1,888.4
$
1,760.9
7
%
Foreign currency exchange impact
Flat
Flat
Adjusted operating profit growth,
on a constant-currency basis
13
%
7
%
Note: Table may not foot due to
rounding.
For more information on the reconciling
items, please refer to the Significant Items Impacting
Comparability section above.
Adjusted Diluted EPS and Related
Constant-currency Growth Rates
This measure is used in reporting to our Board of Directors and
executive management. We believe that this measure provides useful
information to investors because it is the profitability measure we
use to evaluate earnings performance on a comparable year-to-year
basis.
The reconciliation of our GAAP measure, diluted EPS, to adjusted
diluted EPS and the related constant-currency growth rates
follows:
Quarter Ended
Six-Month Period Ended
Per Share Data
Nov. 26, 2023
Nov. 27, 2022
Change
Nov. 26, 2023
Nov. 27, 2022
Change
Diluted earnings per share, as
reported
$
1.02
$
1.01
1
%
$
2.16
$
2.36
(8
)
%
Goodwill impairment
0.14
-
0.14
-
Restructuring charges
0.02
0.02
0.03
0.02
Investment activity, net
0.03
0.04
0.03
0.08
Mark-to-market effects
0.03
0.03
(0.03
)
0.25
Product recall
-
-
-
0.03
Acquisition integration costs
-
0.01
-
0.01
Divestitures gain, net
-
-
-
(0.54
)
Adjusted diluted earnings per share
$
1.25
$
1.10
14
%
$
2.34
$
2.21
6
%
Foreign currency exchange impact
Flat
(1
)
pt
Adjusted diluted earnings per share
growth, on a constant-currency
basis
14
%
6
%
Note: Table may not foot due to
rounding.
For more information on the reconciling
items, please refer to the Significant Items Impacting
Comparability section above.
See our reconciliation below of the effective income tax rate as
reported to the adjusted effective income tax rate for the tax
impact of each item affecting comparability.
Adjusted Earnings Comparisons as a Percent
of Net Sales
We believe that these measures provide useful information to
investors because they are important for assessing our adjusted
earnings comparisons as a percent of net sales on a comparable
year-to-year basis.
Our adjusted earnings comparisons as a percent of net sales are
calculated as follows:
Quarter Ended
In Millions
Nov. 26, 2023
Nov. 27, 2022
Comparisons as a % of Net Sales
Value
Percent of
Net Sales
Value
Percent of
Net Sales
Gross margin as reported (a)
$
1,765.9
34.4
%
$
1,705.1
32.7
%
Mark-to-market effects
25.1
0.5
%
25.1
0.5
%
Restructuring charges
8.3
0.2
%
0.5
-
%
Project-related costs
0.3
-
%
-
-
%
Product recall
-
-
%
2.9
0.1
%
Adjusted gross margin
$
1,799.6
35.0
%
$
1,733.7
33.2
%
Operating profit as reported
$
811.8
15.8
%
$
799.8
15.3
%
Goodwill impairment
117.1
2.3
%
-
-
%
Restructuring charges
14.8
0.3
%
11.6
0.2
%
Investment activity, net
19.6
0.4
%
35.7
0.7
%
Mark-to-market effects
25.1
0.5
%
25.1
0.5
%
Project-related costs
0.3
-
%
-
-
%
Transaction costs
0.6
-
%
1.8
-
%
Product recall
0.2
-
%
2.9
0.1
%
Acquisition integration costs
-
-
%
2.8
0.1
%
Adjusted operating profit
$
989.4
19.3
%
$
879.7
16.9
%
Net earnings attributable to General Mills
as reported
$
595.5
11.6
%
$
605.9
11.6
%
Goodwill impairment, net of tax (b)
82.4
1.6
%
-
-
%
Restructuring charges, net of tax (b)
10.4
0.2
%
8.4
0.2
%
Investment activity, net, net of tax
(b)
15.3
0.3
%
22.7
0.4
%
Mark-to-market effects, net of tax (b)
19.3
0.4
%
19.3
0.4
%
CPW restructuring charges
1.4
-
%
-
-
%
Project-related costs, net of tax (b)
0.2
-
%
-
-
%
Transaction costs, net of tax (b)
0.6
-
%
1.2
-
%
Product recall, net of tax (b)
0.2
-
%
2.3
-
%
Acquisition integration costs, net of tax
(b)
0.1
-
%
2.1
-
%
Adjusted net earnings attributable to
General Mills
$
725.4
14.1
%
$
661.8
12.7
%
Note: Table may not foot due to
rounding.
For more information on the reconciling
items, please refer to the Significant Items Impacting
Comparability section above.
(a) Net sales less cost of sales.
(b) See reconciliation of adjusted
effective income tax rate below for tax impact of each
adjustment.
Six-Month Period Ended
In Millions
Nov. 26, 2023
Nov. 27, 2022
Comparisons as a % of Net Sales
Value
Percent of
Net Sales
Value
Percent of
Net Sales
Gross margin as reported (a)
$
3,536.4
35.2
%
$
3,152.8
31.7
%
Mark-to-market effects
(19.8
)
(0.2
)
%
199.8
2.0
%
Restructuring charges
16.9
0.2
%
1.2
-
%
Project-related costs
1.1
-
%
-
-
%
Product recall
-
-
%
24.0
0.2
%
Adjusted gross margin
$
3,534.6
35.2
%
$
3,377.8
34.0
%
Operating profit as reported
$
1,741.8
17.3
%
$
1,885.4
19.0
%
Goodwill impairment
117.1
1.2
%
-
-
%
Restructuring charges
24.6
0.2
%
13.9
0.1
%
Investment activity, net
22.5
0.2
%
62.0
0.6
%
Mark-to-market effects
(19.8
)
(0.2
)
%
199.8
2.0
%
Project-related costs
1.1
-
%
-
-
%
Transaction costs
0.6
-
%
2.0
-
%
Product recall
0.4
-
%
24.4
0.2
%
Acquisition integration costs
0.2
-
%
4.3
-
%
Divestitures gain
-
-
%
(430.9
)
(4.3
)
%
Adjusted operating profit
$
1,888.4
18.8
%
$
1,760.9
17.7
%
Net earnings attributable to General Mills
as reported
$
1,269.0
12.6
%
$
1,425.9
14.3
%
Goodwill impairment, net of tax (b)
82.4
0.8
%
-
-
%
Restructuring charges, net of tax (b)
15.5
0.2
%
10.1
0.1
%
Investment activity, net, net of tax
(b)
17.2
0.2
%
48.5
0.5
%
Mark-to-market effects, net of tax (b)
(15.3
)
(0.2
)
%
153.8
1.5
%
CPW restructuring charges
1.7
-
%
0.1
-
%
Project-related costs, net of tax (b)
0.7
-
%
-
-
%
Transaction costs, net of tax (b)
0.6
-
%
1.4
-
%
Product recall, net of tax (b)
0.3
-
%
18.8
0.2
%
Acquisition integration costs, net of tax
(b)
0.2
-
%
3.3
-
%
Divestitures gain, net of tax (b)
-
-
%
(329.0
)
(3.3
)
%
Adjusted net earnings attributable to
General Mills
$
1,372.4
13.7
%
$
1,332.9
13.4
%
Note: Table may not foot due to
rounding.
For more information on the reconciling
items, please refer to the Significant Items Impacting
Comparability section above.
(a) Net sales less cost of sales.
(b) See reconciliation of adjusted
effective income tax rate below for tax impact of each
adjustment.
Constant-currency Segment Operating Profit
Growth Rates
We believe that this measure provides useful information to
investors because it provides transparency to underlying
performance of our segments by excluding the effect that foreign
currency exchange rate fluctuations have on year-to-year
comparability given volatility in foreign currency exchange
markets.
Our segments’ operating profit growth rates on a
constant-currency basis are calculated as follows:
Quarter Ended Nov. 26,
2023
Percentage Change in
Operating Profit
as Reported
Impact of Foreign
Currency Exchange
Percentage Change in
Operating Profit on
Constant-Currency
Basis
North America Retail
3
%
Flat
3
%
International
94
%
(6)
pts
100
%
Pet
18
%
Flat
18
%
North America Foodservice
17
%
Flat
17
%
Total segment operating profit
7
%
Flat
7
%
Six-Month Period Ended Nov.
26, 2023
Percentage Change in
Operating Profit
as Reported
Impact of Foreign
Currency Exchange
Percentage Change in
Operating Profit on
Constant-Currency
Basis
North America Retail
3
%
Flat
3
%
International
61
%
(7)
pts
68
%
Pet
2
%
Flat
2
%
North America Foodservice
14
%
Flat
14
%
Total segment operating profit
5
%
Flat
5
%
Note: Tables may not foot due to
rounding.
Net Sales Growth Rates for our Canada
Operating Unit on a Constant-currency Basis
We believe that this measure of our Canada operating unit net
sales provides useful information to investors because it provides
transparency to underlying performance of our Canada operating unit
within our North America Retail segment by excluding the effect
that foreign currency exchange rate fluctuations have on
year-to-year comparability given volatility in foreign currency
exchange markets.
Net sales growth rates for our Canada operating unit on a
constant-currency basis are calculated as follows:
Percentage Change in
Net Sales
as Reported
Impact of Foreign
Currency
Exchange
Percentage Change in
Net Sales on Constant-
Currency Basis
Quarter Ended Nov. 26, 2023
7
%
(2)
pts
9
%
Six-Month Period Ended Nov. 26, 2023
4
%
(2)
pts
6
%
Note: Table may not foot due to
rounding.
Adjusted Effective Income Tax
Rate
We believe this measure provides useful information to investors
because it presents the adjusted effective income tax rate on a
comparable year-to-year basis.
Adjusted effective income tax rates are calculated as
follows:
Quarter Ended
Six-Month Period Ended
Nov. 26, 2023
Nov. 27, 2022
Nov. 26, 2023
Nov. 27, 2022
In Millions
(Except Per Share Data)
Pretax
Earnings
(a)
Income
Taxes
Pretax
Earnings
(a)
Income
Taxes
Pretax
Earnings
(a)
Income
Taxes
Pretax
Earnings
(a)
Income
Taxes
As reported
$
714.1
$
136.0
$
730.0
$
147.1
$
1,544.1
$
309.2
$
1,749.6
$
363.2
Goodwill impairment
117.1
34.7
-
-
117.1
34.7
-
-
Restructuring charges
14.8
4.5
11.6
3.2
24.6
9.2
13.9
3.8
Investment activity, net
19.6
4.2
35.7
13.0
22.5
5.2
62.0
13.5
Mark-to-market effects
25.1
5.7
25.1
5.8
(19.8
)
(4.6
)
199.8
46.0
Project-related costs
0.3
0.1
-
-
1.1
0.4
-
-
Transaction costs
0.6
-
1.8
0.6
0.6
-
2.0
0.6
Product recall
0.2
-
2.9
0.7
0.4
0.1
24.4
5.6
Acquisition integration costs
-
-
2.8
0.7
0.2
0.1
4.3
1.0
Divestitures gain, net
-
-
-
-
-
-
(430.9
)
(101.9
)
As adjusted
$
891.7
$
185.2
$
809.9
$
171.0
$
1,690.8
$
354.2
$
1,625.1
$
331.8
Effective tax rate:
As reported
19.0
%
20.2
%
20.0
%
20.8
%
As adjusted
20.8
%
21.1
%
21.0
%
20.4
%
Sum of adjustment to income taxes
$
49.4
$
23.9
$
45.1
$
(31.4
)
Average number of common shares - diluted
EPS
583.4
602.0
587.4
604.0
Impact of income tax adjustments on
adjusted diluted EPS
$
(0.08
)
$
(0.04
)
$
(0.08
)
$
0.05
Note: Table may not foot due to
rounding.
(a) Earnings before income taxes and
after-tax earnings from joint ventures.
For more information on the reconciling
items, please refer to the Significant Items Impacting
Comparability section above.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231219662798/en/
(Investors) Jeff Siemon: +1-763-764-2301 (Media) Chelcy Walker:
+1-763-764-6364
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