On June 26, 2024, General Mills Inc (GIS, Financial) released its 8-K filing for the fourth quarter and full fiscal year ending May 26, 2024. The global packaged food company, known for its brands such as Nature Valley, Cheerios, and Haagen-Dazs, reported earnings that fell short of analyst expectations.
Performance Overview
General Mills Inc (GIS, Financial) reported a 6% decline in net sales for the fourth quarter, totaling $4.71 billion, compared to $5.03 billion in the same period last year. The company's quarterly earnings per share (EPS) came in at $0.98, missing the analyst estimate of $1.00. For the full fiscal year, net sales decreased by 1% to $19.86 billion, while the annual EPS was $4.31, aligning with the analyst estimate.
Segment Analysis
The North America Retail segment, which is the largest contributor to General Mills' revenue, saw a 7% decline in net sales for the fourth quarter, amounting to $2.85 billion. The Pet segment also experienced an 8% drop in net sales, totaling $602 million. Conversely, the North America Foodservice segment reported a 4% increase in net sales to $589 million, driven by strong growth in breads, cereal, and frozen biscuits.
Financial Achievements and Challenges
Despite the overall decline in sales, General Mills Inc (GIS, Financial) achieved industry-leading levels of Holistic Margin Management (HMM) cost savings, which helped mitigate some of the adverse effects of higher input costs and lower volumes. The company generated $3.3 billion in cash from operating activities, up from $2.8 billion the previous year, and increased its dividends paid by 6% to $1.4 billion.
However, the company faced significant challenges, including higher input costs, unfavorable net price realization and mix, and increased selling, general, and administrative (SG&A) expenses. These factors contributed to a 3% decline in net earnings attributable to General Mills, which totaled $2.50 billion for the fiscal year.
Income Statement Highlights
| Metric | FY 2024 | % Change | FY 2023 |
|---|---|---|---|
| Net Sales | $19.86 billion | (1%) | $20.09 billion |
| Operating Profit | $3.43 billion | Flat | $3.43 billion |
| Net Earnings | $2.50 billion | (3%) | $2.61 billion |
| Earnings Per Share (Diluted) | $4.31 | Flat | $4.31 |
Cash Flow and Dividend Increase
General Mills Inc (GIS, Financial) reported robust cash flow generation, with cash provided by operating activities totaling $3.3 billion, up from $2.8 billion in the previous fiscal year. Capital investments increased to $774 million from $690 million. The company also repurchased approximately 29 million shares of common stock for a total of $2.0 billion.
The Board of Directors declared a quarterly dividend increase to $0.60 per share, payable on August 1, 2024, representing a 2% increase from the previous rate of $0.59 per share.
Outlook for Fiscal 2025
Looking ahead, General Mills Inc (GIS, Financial) aims to accelerate its organic net sales growth by focusing on delivering remarkable experiences across its portfolio of leading brands. The company plans to drive strong HMM cost savings and reinvest in growth initiatives to meet evolving consumer needs. However, the company anticipates continued challenges in the macroeconomic environment, which may impact volume trends and category dollar growth.
For more detailed financial information and insights, please refer to the full 8-K filing.
Explore the complete 8-K earnings release (here) from General Mills Inc for further details.
