The Pillsbury, Betty Crocker and Gold Medal brand owner reported a revenue of $5.02bn for the three months ending May 31, 2020, topping Wall Street expectations of $4.98bn.
Sales of flour and baking mixes rose 75%, while sales of its cereals, which usually fluctuate in the low single-digit range, were up by 26% in the US. Snacks sales increased by 10%.
‘Extraordinary agility’
General Mills initially sold out of products like flour and baking mixes as consumers released their inner bakers, but it ramped up production and adjusted output of the most popular goods. It also engaged more with the consumer by adapting content on its food websites to encourage cooking education and driving ecommerce sales.
“Amid significant challenge and change in the world around us, General Mills adapted and executed in fiscal 2020 to deliver outstanding financial results while fulfilling our purpose of making food the world loves,” said Jeff Harmening, General Mills’ chairman and CEO.
“We’ve demonstrated extraordinary agility to meet the unprecedented increase in demand for food at home and to win across our categories.”
The Minneapolis-based company noted at home food demand particularly accelerated net sales growth in the North America Retail segment in Q4, but was less pronounced in the Europe & Australia segment. Lower away-from-home food demand also reduced growth for the Convenience Stores & Foodservice and Asia & Latin America segments.
For the year, General Mills reported a profit of $2.18bn, or $3.56 per share. Revenue was up 5% at $17.63bn.
Harmening attributed the company’s ability to perform to its employees and suppliers and efforts to keep everyone safe.
“I’m proud of the way our organisation has remained focused on serving the needs of our consumers and communities while protecting the health and safety of our employees throughout the COVID-19 pandemic.”
The company implemented employee safety measures based on guidance from the CDC and WHO across all its supply chain facilities, including proper hygiene, social distancing, mask use and temperature screenings. It also rose to meet the needs of its communities around the world during the pandemic, with a particular focus on food security.
During the fourth quarter, it contributed $10m in monetary and food donations to organisations addressing hunger and food access.
“As we turn to fiscal 2021, we’ll maintain a sharp focus on the near-term opportunity to meet continued elevated demand while continuing to advance our long-term strategies by investing to build our brands, strengthen our innovation, and enhance our strategic capabilities,” said Harmening.
“I remain confident that General Mills will emerge from the pandemic a stronger company.”
Q4 highlights
Net sales increased 21% to $5.0bn; organic net sales were up 16%;
Operating profit increased 16% to $830m; constant-currency adjusted operating profit was up 24%;
Diluted earnings per share (EPS) of $1.02 were up 9%; adjusted diluted EPS of $1.10 increased 33% in constant currency.
FY2020 highlights
Net sales increased 5% to $17.6bn from the prior year; organic net sales were up 4%;
Fiscal 2020 was a 53-week year, with the extra week falling in the fourth quarter.
Operating profit increased 17% to $3.0bn; constant-currency adjusted operating profit was up 7%;
Diluted EPS of $3.56 were up 23%; adjusted diluted EPS of $3.61 increased 12% in constant currency.
