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May 31, 2020
General Mills Q4 2020 Earnings Report
Reported results for the fourth quarter and fiscal year ended May 31, 2020.
Key Takeaways
General Mills reported strong Q4 results driven by increased at-home food demand due to the COVID-19 pandemic. Net sales increased by 21% to $5.0 billion, with organic net sales up 16%. Diluted EPS increased by 9% to $1.02, and adjusted diluted EPS rose by 33% in constant currency. The company is focused on delivering superior execution during the COVID-19 situation while continuing to invest in its brands and capabilities.
Net sales increased 21 percent to $5.0 billion and organic net sales were up 16 percent.
Operating profit of $830 million increased 16 percent; constant-currency adjusted operating profit was up 24 percent.
Diluted earnings per share (EPS) of $1.02 were up 9 percent; adjusted diluted EPS of $1.10 increased 33 percent in constant currency.
General Mills contributed $10 million in monetary and food donations to organizations addressing hunger and food access.
General Mills
General Mills
General Mills Revenue by Segment
Revenue by Segment
North America Retail Revenue
CapyFin.com Forward Guidance
General Mills expects the largest factor impacting its fiscal 2021 performance will be relative balance of at-home versus away-from-home consumer food demand. As a result, the company is not currently providing an outlook for fiscal 2021 growth in organic net sales, adjusted operating profit, and adjusted diluted EPS.
Positive Outlook
- General Mills expects net sales growth in fiscal 2021 will be positively impacted by its superior execution
- General Mills expects net sales growth in fiscal 2021 will be positively impacted by elevated at-home food demand, relative to the pre-pandemic period.
- The company anticipates that the combination of benefits from its HMM initiatives and volume leverage
- The company expects to make further progress in fiscal 2021 in reducing its net-debt-to-adjusted-EBITDA ratio
Challenges Ahead
- The company anticipates headwinds to fiscal 2021 net sales growth from comparisons against the 53rd week
- The company anticipates headwinds to fiscal 2021 net sales growth from the extra month of Pet results
- The company anticipates headwinds to fiscal 2021 net sales growth from the pandemic-related increase in demand in the fourth quarter of fiscal 2020.
- fiscal 2021 net sales growth may be negatively impacted by a potential reduction in consumers’ at-home food inventory
- 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 will result in an adjusted operating profit margin that is approximately in line with fiscal 2020 levels.