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Feb 23, 2020
General Mills Q3 2020 Earnings Report
General Mills reported flat net sales and updated full-year guidance.
Key Takeaways
General Mills reported flat net sales of $4.2 billion, with organic net sales also flat. Diluted EPS of $0.74 matched last year, while adjusted diluted EPS of $0.77 were down 6 percent in constant currency. The company updated its full-year fiscal 2020 guidance, raising the ranges for adjusted operating profit and adjusted diluted EPS.
Net sales of $4.2 billion were flat to last year; organic net sales were also flat.
Operating profit of $651 million essentially matched year-ago results; constant-currency adjusted operating profit was down 8 percent, including a strong increase in media investment.
Diluted earnings per share (EPS) of $0.74 were flat to last year; adjusted diluted EPS of $0.77 were down 6 percent in constant currency.
Company updates its full-year fiscal 2020 guidance, raising the ranges for adjusted operating profit and adjusted diluted EPS
Revenue by Segment
Forward Guidance
General Mills updated its full-year fiscal 2020 targets. Organic net sales are still expected to increase 1 to 2 percent. Constant-currency adjusted operating profit is now expected to increase 4 to 6 percent from the base of $2.86 billion reported in fiscal 2019, which is ahead of the previous range of 2 to 4 percent growth. Constant-currency adjusted diluted EPS are now expected to increase 6 to 8 percent from the base of $3.22 earned in fiscal 2019, which is ahead of the previous range of 3 to 5 percent growth.
Positive Outlook
- Organic net sales are still expected to increase 1 to 2 percent.
- The combination of currency translation, the impact of divestitures executed in fiscal 2019, and contributions from the 53rd week in fiscal 2020 are expected to increase reported net sales by approximately 1 percentage point.
- Constant-currency adjusted operating profit is now expected to increase 4 to 6 percent from the base of $2.86 billion reported in fiscal 2019, which is ahead of the previous range of 2 to 4 percent growth.
- The primary drivers of the increased outlook for constant-currency adjusted operating profit are increased Holistic Margin Management productivity savings, a modest reduction in the outlook for input cost inflation, and continued tight control over administrative expenses.
- Constant-currency adjusted diluted EPS are now expected to increase 6 to 8 percent from the base of $3.22 earned in fiscal 2019, which is ahead of the previous range of 3 to 5 percent growth.
Challenges Ahead
Historical Earnings Impact
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