General Mills gains after organic sales top expectations

Dec. 17, 2020 7:16 AM ETGeneral Mills, Inc. (GIS)By: Clark Schultz, SA News Editor2 Comments
  • General Mills (NYSE:GIS) reports organic sales rose 7% in FQ2 amid broad-based market share gains amid elevated at-home food demand. The 7% mark was ahead of the consensus estimate of +6.2%. Organic sales were up 9% for the North America retail business.
  • Volume was up 4% during the quarter and price/mix contributed three points of growth. The pet business saw sales growth of 15% during the quarter.
  • Adjusted gross margin increased 20 basis points to 35.5% of sales, driven by favorable net price realization and mix, partially offset by higher input costs, including costs to secure incremental capacity, as well as the comparison to the prior-year period that included favorable manufacturing leverage.
  • Net earnings were up 19% to $688M.
  • Outlook: "General Mills expects that the COVID-19 pandemic will drive continued elevated consumer demand for food at home, relative to pre-pandemic levels, through the remainder of fiscal 2021. Third-quarter demand trends are expected to be generally consistent with recent months, due to ongoing virus concerns in many markets around the world. Based on that assumption, the company expects to generate continued strong top- and bottom-line growth in the third quarter of fiscal 2021, with organic net sales growth roughly similar to the second quarter’s growth rate and an adjusted operating profit margin in line with the year-ago period."
  • Shares of General Mills are up 1.05% premarket to $59.54.
  • Previously: General Mills EPS beats by $0.09, beats on revenue
  • GIS has a Seeking Alpha Quant Rating of Neutral, with a low grade for growth holding it back.

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