- Net sales of $5.1 billion were down 1 percent in the third
quarter and organic net sales1 were also down 1 percent; on a
2-year compound growth basis, net sales were up 6 percent and
organic net sales were up 7 percent
- Operating profit of $911 million was up 25 percent; adjusted
operating profit of $914 million increased 14 percent in constant
currency
- Diluted earnings per share (EPS) of $1.17 were up 27
percent; adjusted diluted EPS of $1.17 increased 22 percent in
constant currency
- Company reaffirms full-year fiscal 2024 outlook
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 third quarter.
“General Mills’ strategic focus on brand building, innovation,
and in-store execution contributed to improved volume and market
share trends in the third quarter,” said General Mills Chairman and
Chief Executive Officer Jeff Harmening. “We continue to navigate
today’s evolving operating environment while generating
industry-leading levels of cost savings. And we remain committed to
investing further in our brands and capabilities to drive
profitable growth over the long term.”
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.
Third Quarter Results
Summary
- Net sales were down 1 percent to $5.1 billion, with
lower pound volume partially offset by favorable net price
realization and mix. Organic net sales were 1 percent below
year-ago results that grew double digits; organic net sales were up
7 percent on a 2-year compound growth basis.
- Gross margin was up 100 basis points to 33.5 percent of
net sales, driven by Holistic Margin Management (HMM) cost savings,
favorable net price realization and mix, and favorable
mark-to-market effects, partially offset by higher other supply
chain costs, input cost inflation, and supply chain deleverage.
Adjusted gross margin was up 20 basis points to 34.0 percent of net
sales, driven primarily by HMM cost savings and favorable net price
realization and mix, partially offset by higher other supply chain
costs, input cost inflation, and supply chain deleverage.
- Operating profit of $911 million was up 25 percent,
driven primarily by lower compensation and benefits expenses,
higher gross profit dollars, and product recall recoveries.
Operating profit margin of 17.9 percent was up 370 basis
points. Adjusted operating profit of $914 million increased 14
percent in constant currency, driven primarily by lower
compensation and benefits expenses. Adjusted operating profit
margin was up 220 basis points to 17.9 percent.
- Net earnings attributable to General Mills of $670
million were up 21 percent. Diluted EPS was up 27 percent to
$1.17, driven primarily by higher operating profit and lower net
shares outstanding, partially offset by higher net interest expense
and a higher effective tax rate. Adjusted diluted EPS of $1.17 was
up 22 percent in constant currency, driven primarily by higher
adjusted operating profit, lower net shares outstanding, and a
lower adjusted effective tax rate, partially offset by higher net
interest expense.
Nine Month Results
Summary
- Net sales increased 1 percent to $15.1 billion, with
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 260 basis points to 34.6 percent of
net sales, driven primarily 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 90
basis points to 34.8 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 $2.65 billion was up 1 percent,
driven primarily by higher gross profit dollars, lower compensation
and benefits expenses, and favorable net corporate investment
activity, partially offset by net gains on divestitures in the
prior year and a goodwill impairment charge. Operating profit
margin of 17.5 percent was up 10 basis points. Adjusted
operating profit of $2.8 billion increased 9 percent in constant
currency, driven by higher adjusted gross profit dollars and lower
compensation and benefits expenses, partially offset by higher
media and other consumer expenses. Adjusted operating profit margin
was up 150 basis points to 18.5 percent.
- Net earnings attributable to General Mills were down 2
percent to $1.9 billion. Diluted EPS was up 2 percent to
$3.33, driven primarily by lower net shares outstanding and higher
operating profit, partially offset by higher net interest expense.
Adjusted diluted EPS of $3.51 was up 11 percent in constant
currency, driven primarily by higher adjusted operating profit,
lower net shares outstanding, and a lower adjusted effective tax
rate, partially offset by higher net interest expense.
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 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
Third Quarter
Volume
Price/Mix
Foreign Exchange
Reported Net Sales
North America Retail
(2) pts
3 pts
--
Flat
Pet
(5) pts
2 pts
--
(3)%
North America Foodservice
--
--
--
1%
International
(4) pts
--
--
(3)%
Total
(2) pts
2 pts
--
(1)%
Nine Months
North America Retail
(4) pts
5 pts
--
Flat
Pet
(7) pts
5 pts
--
(2)%
North America Foodservice
2 pts
1 pt
--
3%
International
(4) pts
5 pts
1 pt
3%
Total
(3) pts
3 pts
--
1%
Components of Fiscal 2024
Organic Net Sales Growth
Third Quarter
Organic Volume
Organic Price/Mix
Organic Net Sales
Foreign Exchange
Acquisitions &
Divestitures
Reported Net Sales
North America Retail
(2) pts
3 pts
Flat
--
--
Flat
Pet
(5) pts
2 pts
(3)%
--
--
(3)%
North America Foodservice
--
--
1%
--
--
1%
International
(4) pts
--
(3)%
--
--
(3)%
Total
(2) pts
2 pts
(1)%
--
--
(1)%
Nine Months
North America Retail
(4) pts
5 pts
1%
--
--
Flat
Pet
(7) pts
5 pts
(2)%
--
--
(2)%
North America Foodservice
1 pt
--
1%
--
1 pt
3%
International
(4) pts
5 pts
2%
1 pt
--
3%
Total
(3) pts
4 pts
1%
--
--
1%
Fiscal 2024 Segment Operating
Profit Growth
Third Quarter
% Change as Reported
% Change in Constant
Currency
North America Retail
(4)%
(4)%
Pet
25%
25%
North America Foodservice
(1)%
(1)%
International
(57)%
(53)%
Total
(3)%
(3)%
Nine Months
North America Retail
Flat
Flat
Pet
10%
10%
North America Foodservice
9%
9%
International
8%
14%
Total
2%
2%
North America Retail Segment
Third-quarter net sales for General Mills’ North America Retail
segment of $3.2 billion essentially matched year-ago results, with
favorable net price realization and mix offset by lower pound
volume. Organic net sales were essentially in line with year-ago
results that grew double digits; organic net sales were up 9
percent on a 2-year compound growth basis. Net sales performance
outpaced Nielsen-measured retail sales growth in the quarter due
primarily to an increase in retailer inventory. Net sales were up
low-single digits for the U.S. Morning Foods operating unit and
were up high-single digits for Canada. Net sales were down
low-single digits for U.S. Meals & Baking Solutions and U.S.
Snacks. Segment operating profit of $752 million was down 4 percent
as reported and in constant currency, driven primarily by higher
other supply chain costs, input cost inflation, lower volume, and
supply chain deleverage, partially offset by HMM cost savings and
favorable net price realization and mix.
Through nine months, North America Retail segment net sales of
$9.6 billion essentially matched year-ago levels, including a
modest headwind from divestitures. Organic net sales were up 1
percent. Segment operating profit of $2.4 billion essentially
matched year-ago results as reported and in constant currency.
Pet Segment
Third-quarter net sales for the Pet segment were down 3 percent
to $624 million, driven by lower pound volume, partially offset by
favorable net price realization and mix. Organic net sales were 3
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 results in the quarter included declines on pet treats and
dry pet food, partially offset by growth on wet pet food. Segment
operating profit of $128 million was up 25 percent, driven
primarily by HMM cost savings and favorable net price realization
and mix, partially offset by lower volume, higher selling, general,
and administrative (SG&A) expenses, and input cost
inflation.
Through nine months, Pet segment net sales were down 2 percent
to $1.8 billion. Organic net sales were also down 2 percent.
Segment operating profit was up 10 percent to $342 million, driven
primarily by favorable net price realization and mix and HMM cost
savings, partially offset by lower volume, higher other supply
chain costs, higher SG&A expenses, input cost inflation, and
supply chain deleverage.
North America Foodservice
Segment
Third-quarter net sales for the North America Foodservice
segment increased 1 percent to $552 million. Organic net sales were
also up 1 percent despite a 4-point headwind from market index
pricing on bakery flour. Segment operating profit was down 1
percent to $82 million, driven primarily by higher other supply
chain costs and higher SG&A expenses, partially offset by
favorable net price realization and mix and HMM cost savings.
Through nine months, North America Foodservice net sales
increased 3 percent to $1.7 billion, including a 1-point benefit
from the TNT Crust acquisition. Organic net sales were up 1
percent. Segment operating profit was up 9 percent to $236 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
Third-quarter net sales for the International segment were down
3 percent to $680 million, driven by lower pound volume. Organic
net sales were also down 3 percent, with declines in China and
Brazil partially offset by growth in Europe & Australia.
Segment operating profit totaled $18 million compared to $42
million a year ago, driven primarily by higher input costs and
lower volume.
Through nine months, International net sales increased 3 percent
to $2.1 billion, including a 1-point benefit from foreign currency
exchange. Organic net sales were up 2 percent. Segment operating
profit of $103 million was up 8 percent as reported and up 14
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 lower SG&A expenses, partially offset
by higher input costs and lower volume.
Joint Venture Summary
Third-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 down 2
percent, driven by the timing of new product launches. Combined
after-tax earnings from joint ventures of $18 million were up 42
percent, driven by constant-currency after-tax earnings growth for
CPW and HDJ, partially offset by unfavorable foreign currency
exchange. Through nine months, after-tax earnings from joint
ventures totaled $66 million compared to $58 million a year
ago.
Other Income Statement
Items
Beginning this quarter, results from certain businesses managed
by the company’s Gold Medal Ventures entity are included in
corporate and other net sales and unallocated corporate items
within operating profit. Unallocated corporate items also include
corporate overhead expenses, variances to planned North American
employee benefits and incentives, certain charitable contributions,
restructuring initiative project-related costs, gains and losses on
corporate investments, and other items that are not part of the
measurement of segment operating performance.
Third-quarter unallocated corporate items totaled $64 million
net expense in fiscal 2024 compared to $296 million net expense a
year ago. Excluding mark-to-market valuation effects and other
items affecting comparability, unallocated corporate items totaled
$66 million net expense this year compared to $206 million net
expense last year, driven primarily by lower compensation and
benefits expenses.
Restructuring, impairment, and other exit costs totaled $6
million in the third quarter of fiscal 2024 compared to $1 million
a year ago (please see Note 3 below for more information on these
charges). Benefit plan non-service income totaled $19 million in
the third quarter compared to $22 million a year ago, driven
primarily by an increase in interest costs, partially offset by
lower amortization of losses.
Net interest expense totaled $122 million in the third quarter
of fiscal 2024 compared to $98 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 18.5 percent compared to
16.6 percent last year (please see Note 6 below for more
information on our effective tax rate). The third-quarter adjusted
effective tax rate was 18.4 percent compared to 21.6 percent a year
ago, driven primarily by certain nonrecurring discrete tax benefits
in the third quarter of fiscal 2024.
Cash Flow Generation and Cash
Returns
Cash provided by operating activities totaled $2.4 billion
through nine months of fiscal 2024 compared to $2.0 billion a year
ago, driven primarily by higher net earnings excluding the net
divestitures gain in fiscal 2023. Capital investments totaled $486
million compared to $351 million a year ago. Dividends paid
increased 6 percent to $1.0 billion. General Mills repurchased
approximately 23.5 million shares of common stock through nine
months of fiscal 2024 for a total of $1.6 billion compared to $1.2
billion in share repurchases a year ago. Average diluted shares
outstanding through nine months decreased 3 percent to 582
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. Based on its
current outlook on these and other key factors, the company
reaffirmed its full-year fiscal 2024 financial targets²:
- Organic net sales are expected to range between down 1
percent and flat.
- Adjusted operating profit and adjusted diluted
EPS are each expected to increase 4 to 5 percent in constant
currency.
- Free cash flow conversion is expected to be at least 95
percent of adjusted after-tax earnings.
- The net impact of divestitures and foreign currency exchange is
expected to have an immaterial impact on full-year reported net
sales growth, and foreign currency exchange is 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,
March 20, 2024, 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 critical 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
Nine-Month Period
Ended
Feb. 25,
Feb. 26,
Feb. 25,
Feb. 26,
2024
2023
% Change
2024
2023
% Change
Net sales
$
5,099.2
$
5,125.9
(1
)
%
$
15,143.3
$
15,064.2
1
%
Cost of sales
3,391.8
3,461.1
(2
)
%
9,899.5
10,246.6
(3
)
%
Selling, general, and administrative
expenses
790.9
946.9
(16
)
%
2,460.7
2,632.5
(7
)
%
Divestitures gain, net
-
(13.7
)
NM
-
(444.6
)
NM
Restructuring, impairment, and other
exit costs
5.8
1.4
NM
130.6
14.1
NM
Operating profit
910.7
730.2
25
%
2,652.5
2,615.6
1
%
Benefit plan non-service income
(18.6
)
(21.6
)
(14
)
%
(55.7
)
(65.0
)
(14
)
%
Interest, net
121.7
98.3
24
%
356.5
277.5
28
%
Earnings before income taxes and
after-tax
earnings from joint ventures
807.6
653.5
24
%
2,351.7
2,403.1
(2
)
%
Income taxes
149.3
108.3
38
%
458.5
471.5
(3
)
%
After-tax earnings from joint ventures
18.0
12.7
42
%
65.7
57.9
13
%
Net earnings, including earnings
attributable
to noncontrolling interests
676.3
557.9
21
%
1,958.9
1,989.5
(2
)
%
Net earnings attributable to
noncontrolling interests
6.2
4.8
29
%
19.8
10.5
89
%
Net earnings attributable to General
Mills
$
670.1
$
553.1
21
%
$
1,939.1
$
1,979.0
(2
)
%
Earnings per share – basic
$
1.18
$
0.94
26
%
$
3.35
$
3.32
1
%
Earnings per share – diluted
$
1.17
$
0.92
27
%
$
3.33
$
3.28
2
%
Quarter Ended
Nine-Month Period
Ended
Feb. 25,
Feb. 26,
Basis Pt
Feb. 25,
Feb. 26,
Basis Pt
Comparisons as a % of net sales:
2024
2023
Change
2024
2023
Change
Gross margin
33.5
%
32.5
%
100
34.6
%
32.0
%
260
Selling, general, and administrative
expenses
15.5
%
18.5
%
(300
)
16.2
%
17.5
%
(130
)
Operating profit
17.9
%
14.2
%
370
17.5
%
17.4
%
10
Net earnings attributable to General
Mills
13.1
%
10.8
%
230
12.8
%
13.1
%
(30
)
Quarter Ended
Nine-Month Period
Ended
Comparisons as a % of net sales
excluding
Feb. 25,
Feb. 26,
Basis Pt
Feb. 25,
Feb. 26,
Basis Pt
certain items affecting comparability
(a):
2024
2023
Change
2024
2023
Change
Adjusted gross margin
34.0
%
33.8
%
20
34.8
%
33.9
%
90
Adjusted operating profit
17.9
%
15.7
%
220
18.5
%
17.0
%
150
Adjusted net earnings attributable to
General Mills
13.2
%
11.3
%
190
13.5
%
12.7
%
80
(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
Nine-Month Period
Ended
Feb. 25, 2024
Feb. 26, 2023
% Change
Feb. 25, 2024
Feb. 26, 2023
% Change
Net sales:
North America Retail
$
3,242.1
$
3,232.0
Flat
$
9,620.1
$
9,593.9
Flat
International
680.1
700.6
(3
)
%
2,079.0
2,024.8
3
%
Pet
624.5
645.5
(3
)
%
1,773.7
1,818.3
(2
)
%
North America Foodservice
551.7
547.8
1
%
1,669.7
1,627.2
3
%
Total segment net sales
$
5,098.4
$
5,125.9
(1
)
%
$
15,142.5
$
15,064.2
1
%
Corporate and other
0.8
-
NM
0.8
-
NM
Total net sales
$
5,099.2
$
5,125.9
(1
)
%
$
15,143.3
$
15,064.2
1
%
Operating profit:
North America Retail
$
752.2
$
786.9
(4
)
%
$
2,410.3
$
2,401.8
Flat
International
18.2
42.4
(57
)
%
102.8
95.0
8
%
Pet
128.3
102.6
25
%
342.0
312.3
10
%
North America Foodservice
81.7
82.4
(1
)
%
236.3
217.5
9
%
Total segment operating profit
$
980.4
$
1,014.3
(3
)
%
$
3,091.4
$
3,026.6
2
%
Unallocated corporate items
63.9
296.4
(78
)
%
308.3
841.5
(63
)
%
Divestitures gain, net
-
(13.7
)
NM
-
(444.6
)
NM
Restructuring, impairment, and other
exit costs
5.8
1.4
NM
130.6
14.1
NM
Operating profit
$
910.7
$
730.2
25
%
$
2,652.5
$
2,615.6
1
%
Quarter Ended
Nine-Month Period
Ended
Feb. 25, 2024
Feb. 26, 2023
Basis Pt Change
Feb. 25, 2024
Feb. 26, 2023
Basis Pt Change
Segment operating profit as a % of net
sales:
North America Retail
23.2
%
24.3
%
(110
)
25.1
%
25.0
%
10
International
2.7
%
6.1
%
(340
)
4.9
%
4.7
%
20
Pet
20.5
%
15.9
%
460
19.3
%
17.2
%
210
North America Foodservice
14.8
%
15.0
%
(20
)
14.2
%
13.4
%
80
Total segment operating profit
19.2
%
19.8
%
(60
)
20.4
%
20.1
%
30
See accompanying notes to consolidated
financial statements.
Consolidated Balance
Sheets
GENERAL MILLS, INC. AND
SUBSIDIARIES
(In Millions, Except Par
Value)
Feb. 25, 2024
Feb. 26, 2023
May 28, 2023
(Unaudited)
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents
$
588.6
$
618.7
$
585.5
Receivables
1,771.1
1,770.2
1,683.2
Inventories
1,828.0
2,083.3
2,172.0
Prepaid expenses and other current
assets
466.8
643.8
735.7
Total current assets
4,654.5
5,116.0
5,176.4
Land, buildings, and equipment
3,643.6
3,353.6
3,636.2
Goodwill
14,433.7
14,487.8
14,511.2
Other intangible assets
6,957.2
6,968.0
6,967.6
Other assets
1,171.5
1,274.4
1,160.3
Total assets
$
30,860.5
$
31,199.8
$
31,451.7
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable
$
3,613.5
$
3,868.2
$
4,194.2
Current portion of long-term debt
812.2
2,487.2
1,709.1
Notes payable
686.7
959.8
31.7
Other current liabilities
1,949.5
2,103.1
1,600.7
Total current liabilities
7,061.9
9,418.3
7,535.7
Long-term debt
11,015.1
8,140.2
9,965.1
Deferred income taxes
2,023.5
2,151.6
2,110.9
Other liabilities
1,068.7
1,006.0
1,140.0
Total liabilities
21,169.2
20,716.1
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
1,210.3
1,191.1
1,222.4
Retained earnings
20,416.7
19,226.5
19,838.6
Common stock in treasury, at cost, shares
of 190.1, 166.2, and 168.0
(9,968.4
)
(8,220.1
)
(8,410.0
)
Accumulated other comprehensive loss
(2,297.3
)
(2,038.5
)
(2,276.9
)
Total stockholders’ equity
9,436.8
10,234.5
10,449.6
Noncontrolling interests
254.5
249.2
250.4
Total equity
9,691.3
10,483.7
10,700.0
Total liabilities and equity
$
30,860.5
$
31,199.8
$
31,451.7
See accompanying notes to consolidated
financial statements.
Consolidated Statements of
Cash Flows
GENERAL MILLS, INC. AND
SUBSIDIARIES
(Unaudited) (In Millions)
Nine-Month Period
Ended
Feb. 25, 2024
Feb. 26, 2023
Cash Flows - Operating Activities
Net earnings, including earnings
attributable to noncontrolling interests
$
1,958.9
$
1,989.5
Adjustments to reconcile net earnings to
net cash provided by operating activities:
Depreciation and amortization
412.2
411.0
After-tax earnings from joint ventures
(65.7
)
(57.9
)
Distributions of earnings from joint
ventures
31.4
36.6
Stock-based compensation
76.7
86.7
Deferred income taxes
(85.5
)
(71.2
)
Pension and other postretirement benefit
plan contributions
(20.0
)
(20.2
)
Pension and other postretirement benefit
plan costs
(20.2
)
(20.2
)
Divestitures gain, net
-
(444.6
)
Restructuring, impairment, and other exit
costs
119.7
(14.6
)
Changes in current assets and liabilities,
excluding the effects of
acquisitions and divestitures
(9.6
)
21.3
Other, net
41.0
110.6
Net cash provided by operating
activities
2,438.9
2,027.0
Cash Flows - Investing Activities
Purchases of land, buildings, and
equipment
(485.6
)
(351.3
)
Acquisition, net of cash acquired
(25.5
)
(251.5
)
Proceeds from divestitures, net of cash
divested
-
633.1
Investments in affiliates, net
(1.5
)
(30.8
)
Proceeds from disposal of land, buildings,
and equipment
0.2
0.8
Other, net
4.8
(6.4
)
Net cash used by investing activities
(507.6
)
(6.1
)
Cash Flows - Financing Activities
Change in notes payable
654.5
159.2
Issuance of long-term debt
1,000.0
501.8
Payment of long-term debt
(900.0
)
(600.0
)
Proceeds from common stock issued on
exercised options
11.1
168.0
Purchases of common stock for treasury
(1,601.6
)
(1,152.3
)
Dividends paid
(1,028.0
)
(967.4
)
Distributions to noncontrolling interest
holders
(16.6
)
(11.4
)
Other, net
(47.0
)
(53.5
)
Net cash used by financing activities
(1,927.6
)
(1,955.6
)
Effect of exchange rate changes on cash
and cash equivalents
(0.6
)
(16.0
)
Increase in cash and cash equivalents
3.1
49.3
Cash and cash equivalents - beginning of
year
585.5
569.4
Cash and cash equivalents - end of
period
$
588.6
$
618.7
Cash Flow from changes in current assets
and liabilities, excluding the effects of
acquisitions and divestitures:
Receivables
$
(83.8
)
$
(132.4
)
Inventories
347.8
(237.0
)
Prepaid expenses and other current
assets
269.4
151.5
Accounts payable
(543.7
)
(41.6
)
Other current liabilities
0.7
280.8
Changes in current assets and
liabilities
$
(9.6
)
$
21.3
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
Nine-Month Period
Ended
In Millions
Feb. 25, 2024
Feb. 26, 2023
Feb. 25, 2024
Feb. 26, 2023
Restructuring, impairment, and other exit
costs
$
5.8
$
1.4
$
130.6
$
14.1
Cost of sales
0.1
0.7
17.0
1.9
Total restructuring and impairment
charges
$
5.9
$
2.1
$
147.6
$
16.0
Project-related costs classified in cost
of sales
$
0.5
$
-
$
1.6
$
-
During the third quarter of fiscal 2024,
we did not undertake any new restructuring actions. We recorded $9
million of restructuring charges in the third quarter of fiscal
2024 and $14 million of restructuring charges in the nine-month
period ended February 25, 2024, related to commercial strategy
actions approved in the second quarter of fiscal 2024. We recorded
a $3 million net recovery of restructuring charges in the third
quarter of fiscal 2024 and $16 million of restructuring charges in
the nine-month period ended February 25, 2024, related to
restructuring actions previously announced. We recorded $2 million
of restructuring charges in the third quarter of fiscal 2023 and
$16 million of restructuring charges in the nine-month period ended
February 26, 2023, related to restructuring actions previously
announced. We expect these actions to be completed by the end of
fiscal 2026.
In the second quarter of fiscal 2024, we
recorded a $117 million non-cash goodwill impairment charge related
to our Latin America reporting unit.
(4)
Unallocated corporate expenses totaled $64
million in the third quarter of fiscal 2024, compared to $296
million in the same period in fiscal 2023. In the third quarter of
fiscal 2024, certain compensation and benefits expenses and
charitable contributions decreased compared to the same period last
year. In the third quarter of fiscal 2024, we recorded a $26
million net increase in expense related to the mark-to-market
valuation of certain commodity positions and grain inventories,
compared to a $67 million net increase in expense in the same
period last year. We recorded $3 million of net losses related to
valuation adjustments on certain corporate investments in the third
quarter of fiscal 2024, compared to $20 million of net losses in
the third quarter of fiscal 2023. In the third quarter of fiscal
2024, we recorded $31 million of net recoveries related to a
voluntary recall on certain international Häagen-Dazs ice cream
products in fiscal 2023, compared to a $1 million charge in the
same period last year. We recorded $1 million of restructuring
charges in cost of sales in the third quarter of fiscal 2023. In
addition, we recorded $1 million of integration costs primarily
related to our acquisition of TNT Crust in the third quarter of
fiscal 2023.
Unallocated corporate expenses totaled
$308 million in the nine-month period ended February 25, 2024,
compared to $842 million in the same period last year. We recorded
a $6 million net increase in expense related to the mark-to-market
valuation of certain commodity positions and grain inventories in
the nine-month period ended February 25, 2024, compared to a $266
million net increase in expense in the same period last year. In
the nine-month period ended February 25, 2024, certain compensation
and benefits expenses and charitable contributions decreased
compared to the same period last year. We recorded $25 million of
net losses related to valuation adjustments on certain corporate
investments in the nine-month period ended February 25, 2024,
compared to $82 million of net losses related to valuation
adjustments and the sale of certain corporate investments in the
same period last year. In the nine-month period ended February 25,
2024, we recorded $31 million of net recoveries related to a
voluntary recall on certain international Häagen-Dazs ice cream
products in fiscal 2023, compared to a $26 million charge in the
same period last year. We recorded $17 million of restructuring
charges and $2 million of restructuring initiative project-related
costs in cost of sales in the nine-month period ended February 25,
2024, compared to $2 million of restructuring charges in cost of
sales in the same period last year. In addition, we recorded $5
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 nine-month period ended February 26, 2023.
(5)
Basic and diluted earnings per share (EPS)
were calculated as follows:
Quarter Ended
Nine-Month Period
Ended
In Millions, Except per Share
Data
Feb. 25, 2024
Feb. 26, 2023
Feb. 25, 2024
Feb. 26, 2023
Net earnings attributable to General
Mills
$
670.1
$
553.1
$
1,939.1
$
1,979.0
Average number of common shares – basic
EPS
569.5
592.5
578.6
596.2
Incremental share effect from: (a)
Stock options
1.3
3.7
1.8
3.6
Restricted stock units and performance
share units
2.0
2.8
2.1
2.6
Average number of common shares – diluted
EPS
572.8
599.0
582.5
602.4
Earnings per share – basic
$
1.18
$
0.94
$
3.35
$
3.32
Earnings per share – diluted
$
1.17
$
0.92
$
3.33
$
3.28
(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 third
quarter of fiscal 2024 was 18.5 percent compared to 16.6 percent
for the third quarter of fiscal 2023. The 1.9 percentage point
increase was primarily due to certain favorable tax components
related to the divestitures in fiscal 2023, partially offset by
certain nonrecurring discrete tax benefits in the third quarter of
fiscal 2024. Our effective tax rate excluding certain items
affecting comparability was 18.4 percent in the third quarter of
fiscal 2024, compared to 21.6 percent in the same period last year
(see Note 7 below for a description of our use of measures not
defined by GAAP). The 3.2 percentage point decrease was primarily
due to certain nonrecurring discrete tax benefits in the third
quarter of fiscal 2024.
The effective tax rate for the nine-month
period ended February 25, 2024, was 19.5 percent compared to 19.6
percent for the nine-month period ended February 26, 2023. The 0.1
percentage point decrease was primarily due to certain nonrecurring
discrete tax benefits in fiscal 2024, partially offset by certain
favorable tax components related to the divestitures in fiscal
2023. Our effective tax rate excluding certain items affecting
comparability was 20.1 percent in the nine-month period ended
February 25, 2024, compared to 20.8 percent in the same period last
year (see Note 7 below for a description of our use of measures not
defined by GAAP). The 0.7 percentage point decrease was primarily
due to certain nonrecurring discrete tax benefits in fiscal
2024.
(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 in fiscal 2024. Please see Note
3.
Product recall,
net Costs related to the fiscal 2023 voluntary recall of
certain international Häagen-Dazs ice cream products, net of
recoveries. Please see Note 4.
Restructuring charges
and project-related costs Restructuring charges and
project-related costs related to commercial strategy restructuring
actions 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.
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
Feb. 25, 2024 vs. Feb. 26, 2023
(1
)
%
-
-
(1
)
%
Feb. 26, 2023 vs. Feb. 27, 2022
13
%
(1
)
pt
(2
)
pts
16
%
2-year compound growth
6
%
7
%
North America Retail
Feb. 25, 2024 vs. Feb. 26, 2023
-
-
-
-
Feb. 26, 2023 vs. Feb. 27, 2022
15
%
(1
)
pt
(3
)
pts
18
%
2-year compound growth
7
%
9
%
Pet
Feb. 25, 2024 vs. Feb. 26, 2023
(3
)
%
-
-
(3
)
%
Feb. 26, 2023 vs. Feb. 27, 2022
14
%
-
-
14
%
2-year compound growth
5
%
5
%
Note: Tables may not foot due to
rounding.
Nine-Month Period Ended
Reported Net Sales
Growth
Foreign
Exchange
Acquisitions and
Divestitures
Organic Net
Sales
Total
Feb. 25, 2024 vs. Feb. 26, 2023
1
%
-
-
1
%
Feb. 26, 2023 vs. Feb. 27, 2022
7
%
(1
)
pt
(4
)
pts
12
%
2-year compound growth
4
%
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
Nine-Month Period
Ended
Feb. 25, 2024
Feb. 26, 2023
Change
Feb. 25, 2024
Feb. 26, 2023
Change
Operating profit as reported
$
910.7
$
730.2
25
%
$
2,652.5
$
2,615.6
1
%
Goodwill impairment
-
-
117.1
-
Product recall, net
(31.1
)
1.1
(30.7
)
25.5
Restructuring charges
5.9
2.1
30.5
16.0
Investment activity, net
2.7
20.1
25.2
82.1
Mark-to-market effects
25.7
66.6
5.9
266.4
Project-related costs
0.5
-
1.6
-
Transaction costs
-
-
0.6
2.0
Acquisition integration costs
-
0.7
0.2
5.0
Divestitures gain, net
-
(13.7
)
-
(444.6
)
Adjusted operating profit
$
914.5
$
807.0
13
%
$
2,802.9
$
2,567.9
9
%
Foreign currency exchange impact
Flat
Flat
Adjusted operating profit growth,
on a constant-currency basis
14
%
9
%
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
Nine-Month Period
Ended
Per Share Data
Feb. 25, 2024
Feb. 26, 2023
Change
Feb. 25, 2024
Feb. 26, 2023
Change
Diluted earnings per share, as
reported
$
1.17
$
0.92
27
%
$
3.33
$
3.28
2
%
Goodwill impairment
-
-
0.14
-
Product recall, net
(0.04
)
-
(0.04
)
0.03
Restructuring charges
0.01
-
0.04
0.02
Investment activity, net
-
0.03
0.03
0.11
Mark-to-market effects
0.04
0.09
0.01
0.34
Acquisition integration costs
-
-
-
0.01
Divestitures gain, net
-
(0.08
)
-
(0.62
)
Adjusted diluted earnings per share
$
1.17
$
0.97
21
%
$
3.51
$
3.18
10
%
Foreign currency exchange impact
(1
)
pt
(1
)
pt
Adjusted diluted earnings per share
growth, on a constant-currency basis
22
%
11
%
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
Feb. 25, 2024
Feb. 26, 2023
Comparisons as a % of Net Sales
Value
Percent of Net Sales
Value
Percent of Net Sales
Gross margin as reported (a)
$
1,707.4
33.5
%
$
1,664.8
32.5
%
Mark-to-market effects
25.7
0.5
%
66.6
1.3
%
Restructuring charges
0.1
-
%
0.7
-
%
Project-related costs
0.5
-
%
-
-
%
Product recall, net
(0.1
)
-
%
0.8
-
%
Adjusted gross margin
$
1,733.6
34.0
%
$
1,732.8
33.8
%
Operating profit as reported
$
910.7
17.9
%
$
730.2
14.2
%
Product recall, net
(31.1
)
(0.6
)
%
1.1
-
%
Restructuring charges
5.9
0.1
%
2.1
-
%
Investment activity, net
2.7
0.1
%
20.1
0.4
%
Mark-to-market effects
25.7
0.5
%
66.6
1.3
%
Project-related costs
0.5
-
%
-
-
%
Acquisition integration costs
-
-
%
0.7
-
%
Divestitures gain, net
-
-
%
(13.7
)
(0.3
)
%
Adjusted operating profit
$
914.5
17.9
%
$
807.0
15.7
%
Net earnings attributable to General Mills
as reported
$
670.1
13.1
%
$
553.1
10.8
%
Product recall, net, net of tax (b)
(23.9
)
(0.5
)
%
0.8
-
%
Restructuring charges, net of tax (b)
6.9
0.1
%
1.4
-
%
Investment activity, net, net of tax
(b)
0.5
-
%
15.6
0.3
%
Mark-to-market effects, net of tax (b)
19.9
0.4
%
51.3
1.0
%
CPW restructuring charges
0.3
-
%
0.9
-
%
Project-related costs, net of tax (b)
0.3
-
%
-
-
%
Acquisition integration costs, net of tax
(b)
-
-
%
0.6
-
%
Divestitures gain, net, net of tax (b)
-
-
%
(42.4
)
(0.8
)
%
Adjusted net earnings attributable to
General Mills
$
674.0
13.2
%
$
581.3
11.3
%
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.
Nine-Month Period
Ended
In Millions
Feb. 25, 2024
Feb. 26, 2023
Comparisons as a % of Net Sales
Value
Percent of Net Sales
Value
Percent of Net Sales
Gross margin as reported (a)
$
5,243.8
34.6
%
$
4,817.6
32.0
%
Mark-to-market effects
5.9
-
%
266.4
1.8
%
Restructuring charges
17.0
0.1
%
1.9
-
%
Project-related costs
1.6
-
%
-
-
%
Product recall, net
(0.1
)
-
%
24.8
0.2
%
Adjusted gross margin
$
5,268.2
34.8
%
$
5,110.6
33.9
%
Operating profit as reported
$
2,652.5
17.5
%
$
2,615.6
17.4
%
Goodwill impairment
117.1
0.8
%
-
-
%
Product recall, net
(30.7
)
(0.2
)
%
25.5
0.2
%
Restructuring charges
30.5
0.2
%
16.0
0.1
%
Investment activity, net
25.2
0.2
%
82.1
0.5
%
Mark-to-market effects
5.9
-
%
266.4
1.8
%
Project-related costs
1.6
-
%
-
-
%
Transaction costs
0.6
-
%
2.0
-
%
Acquisition integration costs
0.2
-
%
5.0
-
%
Divestitures gain
-
-
%
(444.6
)
(3.0
)
%
Adjusted operating profit
$
2,802.9
18.5
%
$
2,567.9
17.0
%
Net earnings attributable to General Mills
as reported
$
1,939.1
12.8
%
$
1,979.0
13.1
%
Goodwill impairment, net of tax (b)
82.4
0.5
%
-
-
%
Restructuring charges, net of tax (b)
22.4
0.1
%
11.5
0.1
%
Product recall, net, net of tax (b)
(23.6
)
(0.2
)
%
19.6
0.1
%
Investment activity, net, net of tax
(b)
17.7
0.1
%
64.1
0.4
%
Mark-to-market effects, net of tax (b)
4.6
-
%
205.1
1.4
%
CPW restructuring charges
2.0
-
%
1.0
-
%
Project-related costs, net of tax (b)
1.0
-
%
-
-
%
Transaction costs, net of tax (b)
0.6
-
%
1.4
-
%
Acquisition integration costs, net of tax
(b)
0.2
-
%
3.9
-
%
Divestitures gain, net of tax (b)
-
-
%
(371.4
)
(2.5
)
%
Adjusted net earnings attributable to
General Mills
$
2,046.4
13.5
%
$
1,914.2
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.
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 Feb. 25,
2024
Percentage Change in
Operating Profit as Reported
Impact of Foreign
Currency Exchange
Percentage Change in
Operating Profit on Constant-Currency Basis
North America Retail
(4
)
%
Flat
(4
)
%
International
(57
)
%
(4)
pts
(53
)
%
Pet
25
%
Flat
25
%
North America Foodservice
(1
)
%
Flat
(1
)
%
Total segment operating profit
(3
)
%
Flat
(3
)
%
Nine-Month Period Ended Feb.
25, 2024
Percentage Change in
Operating Profit as Reported
Impact of Foreign
Currency Exchange
Percentage Change in
Operating Profit on Constant-Currency Basis
North America Retail
Flat
Flat
Flat
International
8
%
(6)
pts
14
%
Pet
10
%
Flat
10
%
North America Foodservice
9
%
Flat
9
%
Total segment operating profit
2
%
Flat
2
%
Note: Tables 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
Nine-Month Period
Ended
Feb. 25, 2024
Feb. 26, 2023
Feb. 25, 2024
Feb. 26, 2023
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
$
807.6
$
149.3
$
653.5
$
108.3
$
2,351.7
$
458.5
$
2,403.1
$
471.5
Goodwill impairment
-
-
-
-
117.1
34.7
-
-
Product recall, net
(31.1
)
(7.2
)
1.1
0.3
(30.7
)
(7.1
)
25.5
5.9
Restructuring charges
5.9
(1.2
)
2.1
0.7
30.5
8.0
16.0
4.5
Investment activity, net
2.7
2.2
20.1
4.5
25.2
7.4
82.1
18.0
Mark-to-market effects
25.7
6.0
66.6
15.3
5.9
1.4
266.4
61.3
Project-related costs
0.5
0.1
-
-
1.6
0.5
-
-
Transaction costs
-
-
-
-
0.6
-
2.0
0.6
Acquisition integration costs
-
-
0.7
0.1
0.2
0.1
5.0
1.1
Divestitures gain, net
-
-
(13.7
)
28.7
-
-
(444.6
)
(73.2
)
As adjusted
$
811.3
$
149.4
$
730.3
$
157.8
$
2,502.1
$
503.6
$
2,355.4
$
489.6
Effective tax rate:
As reported
18.5
%
16.6
%
19.5
%
19.6
%
As adjusted
18.4
%
21.6
%
20.1
%
20.8
%
Sum of adjustment to income taxes
$
0.1
$
49.5
$
45.1
$
18.1
Average number of common shares - diluted
EPS
572.8
599.0
582.5
602.4
Impact of income tax adjustments on
adjusted diluted EPS
$
-
$
(0.08
)
$
(0.08
)
$
(0.03
)
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/20240319288819/en/
(Investors) Jeff Siemon: +1-763-764-2301 (Media) Chelcy Walker:
+1-763-764-6364
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