Categories Consumer, Earnings, Retail

General Mills tops estimates in Q1 but FY20 outlook falls short of consensus

General Mills (NYSE: GIS) reported a 33% jump in earnings for the first quarter helped by lower costs and expenses as well as a lower effective tax rate and a decline in net interest expense. The results exceeded analysts’ expectations. However, the company reaffirmed its fiscal 2020 guidance, which fell short of the Street’s view.

General Mills tops estimates in Q1 but FY20 outlook falls short of consensus

Net income attributable to the company climbed by 33% to $521 million. Adjusted earnings increased by 13% on a constant currency basis to $0.79 per share, driven primarily by higher adjusted operating profit, lower net interest expense, a lower adjusted effective tax rate, and higher non-service benefit plan income.

Net sales declined by 2% to $4 billion. Organic net sales were down 1%, reflecting lower organic volume, partially offset by positive organic net price realization and mix across all operating segments.

Looking ahead into fiscal 2020, the company reaffirmed its organic net sales growth in the range of 1% to 2%. Reported net sales are now anticipated to rise by about 1 percentage point backed by a combination of currency translation, the impact of divestitures executed in fiscal 2019, and contributions from the 53rd week. Adjusted earnings are predicted to increase by 3% to 5% from the base of $3.22 earned in 2019.

For the first quarter, sales for the North America Retail segment remained essentially unchanged from the year-ago levels, as benefits from net price realization and mix offset lower contributions from volume. However, lower bakery flour volume and unfavorable index pricing hurt the Convenience Stores & Foodservice segment sales by 4%.

Read: Is Francesca’s Holdings heading towards bankruptcy

The volume growth and positive net price realization and mix drove the Pet segment sales higher by 7%. The segment achieved the benefit from the acquisition of Blue Buffalo Pet Products, the brand in the fast-growing wholesome natural pet food category in the US.

Read: 7 headwinds that could hamper Nio growth

The company’s results were benefited by the global growth framework plan that includes driving innovation and improving marketing and in-store execution. Also, margin expansion, disciplined cash conversion, and cash returns contributed favorably for General Mills.

Internet expense for the first quarter declined by 11% due to a decline in the long-term debt to $11.62 billion as of August 25, 2019. In contrast, the company had $504.8 million of cash and cash equivalents as of August 25, 2019.

Browse through our earnings calendar and get all scheduled earnings announcements, analyst/investor conference and much more!

Most Popular

AVGO Earnings: All you need to know about Broadcom Q1 2021 earnings results

Broadcom Limited (NASDAQ: AVGO) reported first quarter 2021 earnings results today. Total revenue increased 14% year-over-year to $6.65 billion. GAAP net income was $1.3 billion, or $3.05 per share, compared

Infographic: Costco (COST) Q2 2021 sales up 15%; earnings miss

Retail giant Costco Wholesale Corporation (NASDAQ: COST) reported higher earnings and revenues for the second quarter of 2021. Earnings missed analysts’ expectations, while sales beat. Net profit was $951 million

Will shifting to as-a-service model help Hewlett Packard in emerging stronger from COVID?

With the corporate world rapidly shifting to cloud-native computing after the virus outbreak changed work culture and the way businesses operate, technology providers are aggressively innovating their offerings. Hewlett Packard

Add Comment
Viewing Highlight