In conjunction with its participation at the 2020 Barclays
Global Consumer Staples Conference, General Mills (NYSE: GIS)
provided an update on its recent business performance and its
progress against its three priorities for fiscal 2021.
As the COVID-19 pandemic continues, General Mills’ most
important objectives remain the continued health and safety of its
employees and the ongoing ability to serve consumers around the
world. The company has adjusted its ways of working to minimize
virus transmission, including implementing social distancing, mask
use, and temperature screenings. To date, all General Mills
manufacturing and distribution facilities have continued to operate
without significant disruption related to COVID-19.
Through the initial months of its fiscal year, the company has
made progress against each of its three priorities for fiscal
2021:
1) Compete Effectively, Everywhere We
Play General Mills continues to expect the largest
factor impacting its fiscal 2021 performance will be the relative
balance of at-home versus away-from-home consumer food demand. Year
to date in fiscal 2021, at-home food demand has remained elevated
relative to pre-pandemic levels, though it has moderated from the
fourth quarter of fiscal 2020 in most of the company’s key markets
around the world.
The company continues to compete effectively and win in the
current environment, including year-to-date market share gains in
the U.S. in retail and away-from-home channels. In addition, the
company is gaining market share year to date in each of its largest
international markets including Canada, France, the U.K., China,
and Brazil. Retail inventory levels, which fell sharply in the
early stages of the pandemic, saw modest replenishment in the first
quarter of fiscal 2021. The company anticipates retail inventory
levels will largely normalize by the end of fiscal 2021 as supply
and demand equalize across its product platforms.
The combination of higher at-home food demand and General Mills’
top-tier supply chain, sales, and marketing execution has led to
significant increases in household penetration for the company’s
brands, including Cheerios, Pillsbury, Old El Paso, Progresso,
Yoplait, Betty Crocker, and more. In the past six months, General
Mills brands gained more household penetration than the leading
branded competitor in 8 of the company’s top 10 U.S.
categories.
2) Drive Efficiency to Fuel
Investment General Mills remains focused on its
objective of delivering a full-year fiscal 2021 adjusted operating
profit margin approximately in line with fiscal 2020 levels, with
margin tailwinds from Holistic Margin Management savings and volume
leverage offset by headwinds from input cost inflation, increased
investment in brands and capabilities, higher costs to service
elevated demand, and higher ongoing health and safety-related
expenses. Strong fixed cost leverage is expected to result in
adjusted operating profit margin expansion in the first quarter of
fiscal 2021, while higher external supply chain costs and a more
difficult prior-year comparison are expected to result in a decline
in adjusted operating profit margin in the second quarter.
3) Reduce Leverage to Increase
Financial Flexibility Building on its strong track
record of capital discipline and cash generation, General Mills
remains on track to reduce its net-debt-to-adjusted-EBITDA ratio to
below 3.2x in fiscal 2021.
As part of the company’s attendance at the 2020 Barclays Global
Consumer Staples Conference, Kofi Bruce, Chief Financial Officer,
and Jon Nudi, Group President, North America Retail, will
participate in a webcasted fireside chat on Wednesday, September 9,
2020, at 12:20 p.m. Central time. In addition, General Mills plans
to report results for its fiscal 2021 first quarter on Wednesday,
September 23, 2020, and will webcast a question and answer session
on those results at 7:30 a.m. Central time on that day. Interested
parties can access the webcasts of the Barclays conference and the
company’s discussion of its first-quarter results 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 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:
the impact of the coronavirus (COVID-19) pandemic on our business,
suppliers, consumers, customers, and employees; disruptions or
inefficiencies in the supply chain, including any impact of the
coronavirus (COVID-19) pandemic; 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, and energy;
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.
About General Mills General Mills is a leading global
food company whose purpose is to make food the world loves. Its
brands include Cheerios, Annie's, Yoplait, Nature Valley,
Häagen-Dazs, Betty Crocker, Pillsbury, Old El Paso, Wanchai Ferry,
Yoki, BLUE and more. Headquartered in Minneapolis, Minnesota, USA,
General Mills generated fiscal 2020 net sales of U.S. $17.6
billion. In addition, General Mills’ share of non-consolidated
joint venture net sales totaled U.S. $1.0 billion.
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(analysts) Jeff Siemon: 763-764-2301
(media) Kelsey Roemhildt: 763-764-6364
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