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General Mills Q1 Profit Beats Estimates; Reaffirms FY22 Targets

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General Mills (GIS) said its first-quarter top- and bottom-line results were ahead of its expectations. The company also reaffirmed its fiscal 2022 outlook. Looking forward, General Mills anticipates changes in consumer behaviors driven by the COVID-19 pandemic will result in ongoing elevated consumer demand for food at home, relative to pre-pandemic levels. The company plans to capitalize on these opportunities.

For the first quarter ended August 29, 2021, constant-currency adjusted operating profit declined 2 percent year-on-year, driven by lower adjusted gross profit dollars, partially offset by lower administrative expenses. Adjusted operating profit margin decreased 110 basis points to 18.0 percent.

First-quarter adjusted earnings per share was $0.99 compared to $1.00, previous year. On average, 18 analysts polled by Thomson Reuters expected the company to report profit per share of $0.89, for the quarter. Analysts' estimates typically exclude special items. Adjusted operating profit was $819.2 million compared to $832.5 million, last year.

Net earnings attributable to General Mills declined 2 percent to $627.0 million. Earnings per share, as reported, was $1.02 compared to $1.03, last year.

Net sales increased 4 percent to $4.54 billion. Analysts expected revenue of $4.29 billion, for the quarter. Organic net sales increased 2 percent, for the quarter.

Net sales for General Mills' North America Retail segment declined 3 percent to $2.64 billion. Organic net sales also were down 3 percent for the North America Retail segment.

General Mills reaffirmed its key full-year fiscal 2022 targets, and said its organic net sales are expected to be toward the higher end of the initial guidance range of down 1 to 3 percent, reflecting stronger-than-expected net sales performance in the first quarter.

For fiscal 2022, the company expects constant-currency adjusted operating profit and constant-currency adjusted earnings per share to be toward the higher end of the initial guidance ranges of down 2 to 4 percent and flat to down 2 percent, respectively, largely due to the impact of the pet treats acquisition, which is estimated to add approximately 2 cents to fiscal year adjusted earnings per share.

Shares of General Mills were up 2.5% in pre-market trade on Wednesday.

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