UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
QUARTERLY
REPORT
PURSUANT
TO
SECTION
13
OR
15(d)
OF
THE
SECURITIES
EXCHANGE
ACT
OF
1934
FOR THE QUARTERLY
PERIOD ENDED
TRANSITION
REPORT
PURSUANT
TO
SECTION
13
OR
15(d)
OF
THE
SECURITIES
EXCHANGE
ACT
OF
1934
FOR THE TRANSITION PERIOD FROM
TO
Commission file number:
________________
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of
(I.R.S. Employer
incorporation or organization)
Identification No.)
,
(Address of principal executive offices)
(Zip Code)
(Registrant’s telephone number,
including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange
on which registered
________________
Indicate
by
check
mark
whether
the
registrant
(1)
has
filed
all
reports
required
to
be
filed
by
Section
13
or
15(d)
of
the
Securities
Exchange Act of 1934
during the preceding 12
months (or for such shorter
period that the registrant
was required to file such
reports),
and (2) has been subject to such filing requirements for the past 90 days.
☑
☐
Indicate
by
check
mark
whether
the
registrant
has
submitted
electronically
every
Interactive
Data
File
required
to
be
submitted
pursuant to Rule 405
of Regulation S-T (§
232.405 of this chapter) during
the preceding 12 months (or
for such shorter period that
the
registrant was required to submit such files).
☑
☐
Indicate
by
check
mark
whether
the
registrant
is
a
large
accelerated
filer,
an
accelerated
filer,
a
non-accelerated
filer,
a
smaller
reporting
company,
or
an
emerging
growth
company.
See
the
definitions
of
“large
accelerated
filer,”
“accelerated
filer,”
“smaller
reporting company,” and
“emerging growth company” in Rule 12b-2 of the Exchange Act.
☑
Accelerated filer
☐
☐
Smaller reporting company
Emerging growth company
If
an
emerging
growth
company,
indicate
by
check
mark
if
the
registrant
has
elected
not
to
use
the
extended
transition
period
for
complying with any new or revised financial accounting standards provided
pursuant to Section 13(a) of the Exchange Act.
☐
Indicate by check mark whether the registrant is a shell company (as defined
in Rule 12b-2 of the Exchange Act).
Yes
☐
☑
Number
of shares
of Common
Stock outstanding
as of
December 11,
2024:
treasury).
3
General Mills, Inc.
Table of Contents
Page
4
5
6
7
9
21
39
40
40
40
41
42
4
PART
I.
FINANCIAL INFORMATION
Item 1.
Financial Statements.
Consolidated Statements of Earnings
GENERAL MILLS, INC. AND SUBSIDIARIES
(Unaudited) (In Millions, Except per Share Data)
Quarter Ended
Six-Month Period Ended
Nov. 24, 2024
Nov. 26, 2023
Nov. 24, 2024
Nov. 26, 2023
Net sales
$
$
$
$
Cost of sales
Selling, general, and administrative expenses
Restructuring, impairment, and other exit costs
Operating profit
Benefit plan non-service income
()
()
()
()
Interest, net
Earnings before income taxes and after-tax earnings
from
Income taxes
After-tax earnings from joint ventures
Net earnings, including earnings attributable to
Net earnings attributable to noncontrolling interests
Net earnings attributable to General Mills
$
$
$
$
Earnings per share – basic
$
$
$
$
Earnings per share – diluted
$
$
$
$
See accompanying notes to consolidated financial statements.
5
Consolidated Statements of Comprehensive Income
GENERAL MILLS, INC. AND SUBSIDIARIES
(Unaudited) (In Millions)
Quarter Ended
Six-Month Period Ended
Nov. 24, 2024
Nov. 26, 2023
Nov. 24, 2024
Nov. 26, 2023
Net earnings, including earnings attributable to
$
$
$
$
Other comprehensive income (loss), net of tax:
Foreign currency translation
()
()
()
Other fair value changes:
Hedge derivatives
()
Reclassification to earnings:
Hedge derivatives
()
()
Amortization of losses and prior service costs
Other comprehensive income (loss), net of tax
()
()
()
Total comprehensive
income
Comprehensive income attributable to noncontrolling
Comprehensive income attributable to General Mills
$
$
$
$
See accompanying notes to consolidated financial statements.
6
Consolidated Balance Sheets
GENERAL MILLS, INC. AND SUBSIDIARIES
(In Millions, Except Par Value)
Nov. 24, 2024
May 26, 2024
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents
$
$
Receivables
Inventories
Prepaid expenses and other current assets
Assets held for sale
Land, buildings, and equipment
Goodwill
Other intangible assets
Other assets
Total assets
$
$
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable
$
$
Current portion of long-term debt
Notes payable
Other current liabilities
Liabilities held for sale
Total current
liabilities
Long-term debt
Deferred income taxes
Other liabilities
Total liabilities
Stockholders’ equity:
Common stock,
Additional paid-in capital
Retained earnings
Common stock in treasury,
at cost, shares of
()
()
Accumulated other comprehensive loss
()
()
Total stockholders’
equity
Noncontrolling interests
Total equity
Total liabilities and equity
$
$
See accompanying notes to consolidated financial statements.
7
Consolidated Statements of Total
Equity
GENERAL MILLS, INC. AND SUBSIDIARIES
(Unaudited) (In Millions, Except per Share Data)
Quarter Ended
Nov. 24, 2024
Nov. 26, 2023
Shares
Amount
Shares
Amount
Total equity,
beginning balance
$
$
Common stock,
billion shares authorized, $
Additional paid-in capital:
Beginning balance
Stock compensation plans
()
()
Unearned compensation related to stock unit awards
()
()
Earned compensation
Ending balance
Retained earnings:
Beginning balance
Net earnings attributable to General Mills
Cash dividends declared ($
()
()
Ending balance
Common stock in treasury:
Beginning balance
()
()
()
()
Shares purchased, including excise tax of $
()
()
()
()
Stock compensation plans
Ending balance
()
()
()
()
Accumulated other comprehensive loss:
Beginning balance
()
()
Comprehensive income (loss)
()
Ending balance
()
()
Noncontrolling interests:
Beginning balance
Comprehensive income
Distributions to noncontrolling interest holders
()
()
Change in ownership interest
Ending balance
Total equity,
ending balance
$
$
See accompanying notes to consolidated financial statements.
8
Consolidated Statements of Total
Equity
GENERAL MILLS, INC. AND SUBSIDIARIES
(Unaudited) (In Millions, Except per Share Data)
Six-Month Period Ended
Nov. 24, 2024
Nov. 26, 2023
Shares
Amount
Shares
Amount
Total equity,
beginning balance
$
$
Common stock,
billion shares authorized, $
Additional paid-in capital:
Beginning balance
Stock compensation plans
()
Unearned compensation related to stock unit awards
()
()
Earned compensation
Ending balance
Retained earnings:
Beginning balance
Net earnings attributable to General Mills
Cash dividends declared ($
()
()
Ending balance
Common stock in treasury:
Beginning balance
()
()
()
()
Shares purchased, including excise tax of $
()
()
()
()
Stock compensation plans
Ending balance
()
()
()
()
Accumulated other comprehensive loss:
Beginning balance
()
()
Comprehensive loss
()
()
Ending balance
()
()
Noncontrolling interests:
Beginning balance
Comprehensive income
Distributions to noncontrolling interest holders
()
()
Change in ownership interest
Ending balance
Total equity,
ending balance
$
$
See accompanying notes to consolidated financial statements.
9
Consolidated Statements of Cash Flows
GENERAL MILLS, INC. AND SUBSIDIARIES
(Unaudited) (In Millions)
Six-Month Period Ended
Nov. 24, 2024
Nov. 26, 2023
Cash Flows - Operating Activities
Net earnings, including earnings attributable to noncontrolling interests
$
$
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization
After-tax earnings from joint ventures
()
()
Distributions of earnings from joint ventures
Stock-based compensation
Deferred income taxes
()
()
Pension and other postretirement benefit plan contributions
()
()
Pension and other postretirement benefit plan costs
()
()
Restructuring, impairment, and other exit costs
()
Changes in current assets and liabilities, excluding the effects of
acquisitions and divestitures
()
Other, net
()
Net cash provided by operating activities
Cash Flows - Investing Activities
Purchases of land, buildings, and equipment
()
()
Acquisition, net of cash acquired
()
()
Investments in affiliates, net
()
Proceeds from disposal of land, buildings, and equipment
Other, net
()
Net cash used by investing activities
()
()
Cash Flows - Financing Activities
Change in notes payable
Issuance of long-term debt
Payment of long-term debt
()
Proceeds from common stock issued on exercised options
Purchases of common stock for treasury
()
()
Dividends paid
()
()
Distributions to noncontrolling interest holders
()
()
Other, net
()
()
Net cash provided (used) by financing activities
()
Effect of exchange rate changes on cash and cash equivalents
()
Increase in cash and cash equivalents
Cash and cash equivalents - beginning of year
Cash and cash equivalents - end of period
$
$
Cash Flows from changes in current assets and liabilities, excluding
the effects of
acquisitions and divestitures:
Receivables
$
()
$
()
Inventories
()
Prepaid expenses and other current assets
Accounts payable
()
Other current liabilities
Changes in current assets and liabilities
$
$
()
See accompanying notes to consolidated financial statements.
10
GENERAL MILLS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
(Unaudited)
Pet Brands acquisition).
We
expect to close
the transaction in
the third quarter
of fiscal 2025,
subject to regulatory
approval and other
customary closing conditions. We
intend to fund the acquisition with cash on hand.
During
the
second
quarter
of
fiscal
2025,
we
entered
into
definitive
agreements
to
sell
our
North
American
yogurt
businesses
to
affiliates
of
Groupe
Lactalis
S.A.
(Lactalis)
and
Sodiaal
International
(Sodiaal)
for
approximately
$
billion.
We
expect
to
close
these divestitures in calendar year 2025, subject to regulatory
approvals and other customary closing conditions. We
have classified all
assets and
liabilities associated
with our
North American
yogurt businesses
as held
for sale
in our
Consolidated Balance
Sheets as
of
November 24, 2024.
The components of assets held for sale and liabilities held for sale are as follows:
Inventories
Prepaid expenses and other current assets
Land, buildings, and equipment
Goodwill
Other intangible assets
Other assets
Assets held for sale
$
Accounts payable
$
Other current liabilities
Deferred income taxes
Other liabilities
Liabilities held for sale
$
acquired.
During
the
first
quarter
of
fiscal
2025,
we
paid
$
million
related
to
a
purchase
price
holdback
after
certain
closing
We
financed
the
transaction
with
cash
on
hand.
We
consolidated
the
business
into
our
Consolidated
Balance
Sheets
and
recorded
goodwill
of
$
million,
an
indefinite-lived
brand
intangible
asset
of
$
million
and
a
finite-lived
customer
relationship
asset
of
$
million.
The
goodwill
is
included
in
the
International
segment
and
is
not
deductible
for
tax
purposes. The pro forma effects
of this acquisition were not
material. We
have conducted a preliminary assessment
of the fair value of
the acquired
assets and
liabilities of
the business
and we
are continuing
our review
of these
items during
the measurement
period. If
new
information
is
obtained
about
facts
and
circumstances
that
existed
at
the
acquisition
date,
the
acquisition
accounting
will
be
11
$
$
$
Goodwill impairment
$
$
$
$
restructuring
charges
in
the
second
quarter
of
fiscal
2025
and
$
million
of
restructuring
charges
in
the
six-month
period
ended
November 24,
2024, related
to restructuring
actions previously
announced. We
recorded $
million of
restructuring charges
in the
second quarter of
fiscal 2024 and
$
million of restructuring
charges in the
six-month period ended
November 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 $
million non-cash goodwill
impairment charge
related to our Latin
America
reporting unit. Please see Note 4 for additional information.
million
of
cash
in
the
six-month
period
ended
November
24,
2024,
related
to
restructuring
actions.
We
paid
net
$
million of cash in the same period of fiscal 2024.
Restructuring and impairment charges and project-related
costs are recorded in our Consolidated Statements of Earnings as follows:
$
$
$
Cost of sales
Total restructuring
and impairment charges
$
$
$
$
Project-related costs classified in cost of sales
$
$
$
$
$
Other intangible assets:
Intangible assets not subject to amortization:
Brands and other indefinite-lived intangibles
Intangible assets subject to amortization:
Customer relationships and other finite-lived intangibles
Less accumulated amortization
()
()
Intangible assets subject to amortization, net
Other intangible assets
Total
$
$
12
$
$
$
$
$
Reclassified to assets held
()
()
()
Other activity, primarily
foreign currency translation
()
()
()
()
Balance as of Nov. 24, 2024
$
$
$
$
$
$
million. For additional information, see Note 6 to the Consolidated Financial
Statements included in our Annual Report on Form 10-K for the fiscal year
ended May 26, 2024.
Reclassified to assets held for sale
()
Other activity, primarily
foreign currency translation and amortization
()
Balance as of Nov. 24, 2024
$
impairment
of
our
intangible
assets
as
their
related
fair
values
were
substantially
in
excess of the
carrying values,
except for
the
Uncle Toby’s
brand intangible
asset. In addition,
while having
significant coverage
as of
our
fiscal
2025
assessment
date,
the
Progresso
,
Nudges
,
Kitano
brand
intangible
assets
had
risk
of
decreasing
coverage. We will continue
to monitor these businesses for potential impairment.
$
Raw materials and packaging
Grain
Excess of FIFO over LIFO cost
()
()
Total
$
$
million of inventories classified as held for sale as of November 24, 2024.
13
$
()
$
()
$
()
Net loss on commodity positions reclassified from
unallocated corporate items to segment operating profit
Net mark-to-market revaluation of certain grain inventories
()
()
Net mark-to-market valuation of certain commodity
positions recognized in unallocated corporate items
$
$
()
$
$
agricultural inputs and $
million related to energy inputs. These contracts relate to inputs
that generally will be utilized within the
next
We also
have net investments in foreign
subsidiaries that are denominated
in euros. As of November
24, 2024, we hedged a
portion of
these investments with €
million of euro-denominated bonds.
During the
second quarter of
fiscal 2025, in
advance of planned
debt financing,
we entered into
$
million of treasury
locks. The
treasury locks were terminated during the second quarter
of fiscal 2025, in conjunction with the Company’s
issuance of $
.
Upon
termination,
a
gain
of $
million
was recognized
in AOCI
and
will be
amortized
through interest expense over the respective term of the debt.
During the
second quarter
of fiscal
2025, we
entered into
a $
million notional
amount interest
rate swap
to convert
our $
million of fixed-rate notes due January 30, 2030, to a floating rate.
During the second quarter of fiscal 2025, our
$
million notional amount interest rate swap to convert
our $
rate notes due
November 18, 2025
to a floating
rate was called
by the counterparty
prior to the
maturity date. The
previously existing
swap was designated
as a fair value
hedge, and concurrent
with the swap
being called, we
ceased recording
market value adjustments
to the associated hedged debt.
The
fair
values
of
the
derivative
positions
used
in
our
risk
management
activities
and
other
assets
recorded
at
fair
value
were
not
material
as
of
November
24,
2024,
and
were
Level
1
or
Level
2
assets
and
liabilities
in
the
fair
value
hierarchy.
We
did
not
significantly change our valuation techniques from prior periods.
We
offer
certain
suppliers
access
to
third-party
services
that
allow
them
to
view
our
scheduled
payments
online.
The
third-party
services also
allow suppliers
to finance
advances on
our scheduled
payments at
the sole
discretion of
the supplier
and the third
party.
We
have no
economic interest
in these
financing arrangements
and no
direct relationship
with the
suppliers, the
third parties,
or any
financial institutions
concerning these
services, including
not providing
any form
of guarantee
and not
pledging assets
as security
to
the third
parties or
financial institutions.
All of
our accounts
payable remain
as obligations
to our
suppliers as
stated in
our supplier
agreements.
As
of
November
24,
2024,
$
million
of
our
total
accounts
payable
were
payable
to
suppliers
who
utilize
these
third-party services.
As of
May 26,
2024, $
million of
our total
accounts payable
were payable
to suppliers
who utilize
these
third-party services.
14
%
$
%
Financial institutions
Total
$
%
$
%
$
Uncommitted credit facilities
Total committed
and uncommitted credit facilities
$
$
billion
fee-paid
committed
credit
facility
that
is
scheduled
to
expire
in
October 2029
. Concurrent with the execution of this credit facility,
we terminated our existing $
The
credit
facilities
contain
covenants,
including
a
requirement
to
maintain
a
fixed
charge
coverage
ratio
of
at
least
The fair values
and carrying
amounts of long-term
debt, including
the current portion,
were $
respectively,
as of
November 24,
2024. The
fair value
of long-term
debt was
estimated using
market quotations
and discounted
cash
flows based
on our
current incremental
borrowing rates
for similar
types of
instruments. Long
-term debt
is a
Level 2
liability in
the
In the
second quarter
of fiscal
2025, we
issued $
percent fixed-rate
notes due
use the net proceeds to fund the Whitebridge Pet Brands acquisition.
In the second quarter
of fiscal 2025, we
issued $
percent fixed-rate notes due
the net proceeds to fund the Whitebridge Pet Brands acquisition.
In the
second quarter
of fiscal
2025, we
issued €
million of
floating-rate notes
due
. We
used the
net proceeds
to
repay €
million of floating-rate notes due
In the
second quarter
of fiscal
2025, we
issued €
million of
floating-rate notes
due
. We
used the
net proceeds
to repay €
million of floating-rate notes due
In the
fourth quarter
of fiscal 2024,
we issued €
percent fixed-rate
notes due
proceeds for general corporate purposes.
In
the fourth
quarter
of fiscal
2024,
we issued
€
percent
fixed-rate notes
due
proceeds for general corporate purposes.
In
the
third
quarter of
fiscal
2024,
we
issued
$
percent
fixed-rate
notes due
proceeds to repay $
percent fixed-rate notes due
In the second
quarter of fiscal 2024,
we issued €
million of floating-rate
notes due
. We
used the net proceeds
to repay €
million of floating-rate notes due
15
percent fixed-rate
notes due
proceeds to repay $
million of floating-rate notes due
, and for general corporate purposes.
In the first
quarter of fiscal
2024, we issued
€
million of floating-rate
notes due
. We
used the net proceeds
to
repay €
million of floating-rate notes due
.
Certain of our
long-term debt agreements
contain restrictive
covenants.
million).
On
June
1,
2024,
the
floating
preferred
return
rate
on
GMC’s
Class A Interests was reset to the sum of the
basis points. The preferred return rate is adjusted
every
through a negotiated agreement with the Class A Interest holder or through a remarketing
auction.
$
$
$
Other comprehensive income (loss):
Foreign currency translation
$
$
()
()
$
()
$
()
Other fair value changes:
Hedge derivatives
()
()
Reclassification to earnings:
Hedge derivatives (a)
()
()
Amortization of losses and
()
()
Other comprehensive income (loss)
$
$
()
()
$
()
$
()
Total comprehensive income
$
$
$
$
$
$
$
Other comprehensive (loss) income:
Foreign currency translation
$
$
()
()
()
$
()
$
()
Other fair value changes:
Hedge derivatives
()
()
()
()
Reclassification to earnings:
Hedge derivatives (a)
()
()
Amortization of losses and
()
()
Other comprehensive (loss) income
$
$
()
()
()
$
()
$
()
Total comprehensive income
$
$
$
$
16
)
$
()
Unrealized gain from hedge derivatives
Pension, other postretirement, and postemployment benefits:
Net actuarial loss
()
()
Prior service credits
Accumulated other comprehensive loss
$
()
$
()
$
$
$
$
$
$
million. This expense will be recognized over
Net cash proceeds from the exercise of stock options
less shares used for withholding taxes and the intrinsic
value of options exercised
were as follows:
$
Intrinsic value of options exercised
$
$
17
$
Assumptions:
Risk-free interest rate
%
%
Expected term
years
years
Expected volatility
%
%
Dividend yield
%
%
$
$
$
$
Average number
of common shares – basic EPS
Incremental share effect from: (a)
Stock options
Restricted stock units and performance share units
Average number
of common shares – diluted EPS
Earnings per share – basic
$
$
$
$
Earnings per share – diluted
$
$
$
$
Aggregate purchase price
$
$
$
$
18
$
Net income tax payments
$
$
$
$
$
$
$
Interest cost
Expected return on plan assets
()
()
()
()
Amortization of losses (gains)
()
()
()
Amortization of prior service costs (credits)
()
()
()
Other adjustments
Curtailment gain
()
Net expense (income)
$
$
$
()
$
()
$
$
Pension Plans
Benefit Plans
Postemployment
Benefit Plans
Six-Month
Period Ended
Six-Month
Period Ended
Six-Month
Period Ended
In Millions
Nov. 24,
2024
Nov. 26,
2023
Nov. 24,
2024
Nov. 26,
2023
Nov. 24,
2024
Nov. 26,
2023
Service cost
$
$
$
$
$
$
Interest cost
Expected return on plan assets
()
()
()
()
Amortization of losses (gains)
()
()
()
Amortization of prior service costs (credits)
()
()
()
Other adjustments
Curtailment gain
()
Net expense (income)
$
$
$
()
$
()
$
$
million of net plan assets classified as held for sale as of November 24, 2024.
20
$
$
$
International
North America Pet
North America Foodservice
$
$
$
$
Corporate and other
Total net sales
$
$
$
$
Operating profit:
North America Retail
$
$
$
$
International
North America Pet
North America Foodservice
Total segment operating
profit
$
$
$
$
Unallocated corporate items
Restructuring, impairment, and other exit costs
Operating profit
$
$
$
$
$
$
$
U.S. Morning Foods
U.S. Snacks
Canada
Total
$
$
$
$
$
$
$
Cereal
Convenient meals
Dough
Pet
Baking mixes and ingredients
Yogurt
Super-premium ice cream
Other
Total
$
$
$
$
21
Item 2.
Management’s Discussion and Analysis
of Financial Condition and Results of Operations.
INTRODUCTION
This
Management’s
Discussion
and
Analysis
of
Financial
Condition
and
Results
of
Operations
(MD&A)
should
be
read
in
conjunction
with
the
MD&A
included
in
our
Annual
Report
on
Form
10-K
for
the
fiscal
year
ended
May
26,
2024,
for
important
background
regarding,
among other
things, our
key business
drivers.
Significant
trademarks and
service marks
used in
our business
are set forth in
italics
herein. Certain terms used throughout this report are defined in the
“Glossary” section below.
Our
key
priorities
in
fiscal
2025
are
to
accelerate
our
organic
net
sales
growth,
create
fuel
for
investment,
and
drive
strong
cash
generation.
Amid
a
continued
uncertain
macroeconomic
backdrop
for
consumers,
we
are
focused
on
delivering
remarkable
experiences across our leading food brands, resulting in sustainable improvement
in volume growth and market share trends over time.
Our
fiscal
2025 plan
calls for
product
news
and
innovation
focused
on taste,
health,
convenience,
and value,
supported
with
strong
brand
campaigns
and
omnichannel
visibility.
We
expect
to
generate
higher
levels
of
Holistic
Margin
Management
(HMM)
cost
savings
to
more
than
offset
input
cost
inflation
in
fiscal
2025.
We
expect
to
reinvest
in
the
business,
including
plans
for
increased
brand-building investment in fiscal 2025 to drive improved volume performance.
CONSOLIDATED
RESULTS
OF OPERATIONS
Second Quarter Results
In
the
second
quarter
of
fiscal
2025,
net
sales
increased
2
percent
and
organic
net
sales
increased
1
percent
compared
to
the
same
period last
year.
Operating profit
increased 33
percent to
$1,078 million,
primarily driven
by a
goodwill impairment
charge recorded
in
fiscal
2024
and
lower
restructuring
charges,
lower
input
costs,
a
favorable
change
in
the
mark-to-market
valuation
of
certain
commodity
positions
and
grain
inventories,
and
an
increase
in
contributions
from
volume growth,
partially
offset
by an
increase
in
selling, general
and administrative
(SG&A) expenses
and unfavorable
net price
realization and
mix. Operating
profit margin
of 20.6
percent
increased
480
basis
points.
Adjusted
operating
profit
of
$1,064
million
increased
7
percent
on
a
constant-currency
basis,
primarily driven
by lower
input costs
and an
increase in
contributions
from volume
growth, partially
offset by
an increase
in SG&A
expenses and
unfavorable net
price realization
and mix.
Adjusted operating
profit margin
increased 100
basis points
to 20.3
percent.
Diluted earnings
per share
of $1.42
increased 39
percent in
the second
quarter of
fiscal 2025.
Adjusted diluted
earnings per
share of
$1.40
increased
12
percent
on
a
constant-currency
basis
compared
to
the
second
quarter
of
fiscal
2024.
See
the
“Non-GAAP
Measures” section below for a description of our use of measures not defined
by GAAP.
A summary of our consolidated financial results for the second quarter
of fiscal 2025 follows:
Quarter Ended Nov. 24,
2024
In millions,
except per share
Quarter Ended
Nov. 24, 2024 vs.
Nov. 26, 2023
Percent
of Net
Sales
Constant-
Currency
Growth (a)
$
5,240.1
2
%
Operating profit
1,077.9
33
%
20.6
%
Net earnings attributable to General Mills
795.7
34
%
Diluted earnings per share
$
1.42
39
%
Organic net sales growth rate (a)
1
%
Adjusted operating profit (a)
1,064.0
8
%
20.3
%
7
%
Adjusted diluted earnings per share (a)
$
1.40
12
%
12
%
(a)
See the “Non-GAAP Measures” section below for our use of measures not defined
by GAAP.
Consolidated
net sales
Quarter Ended
Nov. 24, 2024
Nov. 26, 2023
Nov. 26, 2023
Net sales (in millions)
$
5,240.1
2
%
$
5,139.4
Contributions from volume growth (a)
3
pts
Net price realization and mix
(1)
pt
Foreign currency exchange
Flat
Note: Table may
not foot due to rounding.
(a)
Measured in tons based on the stated weight of our product shipments.
22
Net sales in the
second quarter of fiscal
2025 increased 2 percent
compared to the same
period in fiscal 2024,
driven by an increase
in
contributions from volume growth, partially offset by
unfavorable net price realization and mix.
Components of organic net sales growth are shown in the following
table:
Quarter Ended Nov. 24, 2024 vs.
Quarter Ended Nov. 26, 2023
Contributions from organic volume growth (a)
2
pts
Organic net price realization and mix
(1)
pt
Organic net sales growth
1
pt
Foreign currency exchange
Flat
Acquisitions
Flat
Net sales growth
2
pts
Note: Table may
not foot due to rounding.
(a)
Measured in tons based on the stated weight of our product shipments.
Organic
net sales
increased 1
percent in
the second
quarter of
fiscal 2025
compared to
the same
period in
fiscal 2024,
driven by
an
increase in contributions from organic volume growth,
partially offset by unfavorable organic net price realization
and mix.
Cost of sales
decreased $64 million to $3,309
million in the second quarter
of fiscal 2025 compared
to the same period
in fiscal 2024.
The decrease
was primarily
driven by
an $87 million
decrease attributable
to product
rate and
mix, partially
offset by
an $85
million
increase
attributable
to
volume.
We
recorded
a
$29 million
net
decrease
in
cost
of
sales
related
to
the
mark-to-market
valuation
of
certain commodity
positions and
grain inventories
in the
second quarter
of fiscal
2025, compared
to a
$25 million net
increase in
the
second
quarter
of fiscal
2024.
We
recorded
$8
million
of
restructuring
charges
in
the
second
quarter of
fiscal
2024
(please refer
to
Note 3 to the Consolidated Financial Statements in Part I, Item 1 of this report).
increased
$22 million
to
$852 million
in
the
second
quarter
of
fiscal
2025,
compared
to
the
same
period
in
fiscal
2024,
primarily driven by an increase in
certain compensation and benefits expenses
and the addition of a pet food business
in Europe.
SG&A expenses as a percent
of net sales in the
second quarter of fiscal 2025
increased 10 basis points compared
to the second quarter
of fiscal 2024.
Restructuring, impairment, and other exit costs
totaled $1 million in the second quarter of
fiscal 2025,
compared to $124 million in
the
same
period
last
year.
We
recorded
$1
million
of
charges
in
the
second
quarter
of
fiscal
2025
related
to
actions
previously
announced compared
to $6 million in
the same period
last year.
In the second
quarter of fiscal 2024,
we recorded a $117
million non-
cash
goodwill
impairment
charge
related
to
our
Latin
America
reporting
unit
(please
refer
to
Note
3
to
the
Consolidated
Financial
Statements in Part I, Item 1 of this report).
Benefit plan non-service income
totaled $14 million in the second quarter
of fiscal 2025, compared to $20
million in the same period
last year, primarily reflecting higher
amortization of losses and interest costs.
Interest, net
for the second quarter of fiscal 2025
totaled $125 million, up $7 million from the second quarter
of fiscal 2024, primarily
driven by higher average long-term debt levels.
The
effective tax rate
for the second quarter
of fiscal 2025 was 20.1
percent compared to 19.0
percent for the second
quarter of fiscal
2024. The
1.1 percentage
point increase was
primarily due
to certain nonrecurring
discrete tax benefits
in the second
quarter of
fiscal
2024, partially
offset by
favorable earnings
mix by
jurisdiction in
the second
quarter of
fiscal 2025.
Our effective
tax rate
excluding
certain
items
affecting
comparability
was
20.1
percent
in
the
second
quarter
of
fiscal
2025,
compared
to
20.8
percent
in
the
same
period last
year (see
the “Non-GAAP
Measures” section
below for
a description
of our
use of
measures not
defined by
GAAP). The
0.7 percentage point decrease was primarily due to favorable earnings
mix by jurisdiction in the second quarter of fiscal 2025.
23
After-tax earnings from
joint ventures
for the second quarter
of fiscal 2025
increased to $30 million compared
to $24 million in the
same
period
in
fiscal
2024,
primarily
due
to
lower
input
costs
and
favorable
net
price
realization
and
mix
at
Cereal
Partners
Worldwide
(CPW), partially
offset
by
higher SG&A
expenses and
a decrease
in volume
at CPW
and
higher
input costs
at Häagen-
Dazs
Japan,
Inc.
(HDJ).
On
a
constant-currency
basis,
after-tax
earnings
from
joint
ventures
increased
23
percent
(see
the
“Non-
GAAP Measures” section below for a description of our use of measures
not defined by GAAP).
The components of our joint ventures’ net sales growth are shown in the following
table:
Quarter Ended Nov. 24, 2024 vs.
Quarter Ended Nov. 26, 2023
CPW
HDJ
Total
Contributions from volume growth (a)
(2)
pts
Flat
Net price realization and mix
4
pts
1
pt
Net sales growth in constant currency
2
pts
1
pt
1
pt
Foreign currency exchange
1
pt
1
pt
1
pt
Net sales growth
2
pts
2
pts
2
pts
Note: Table may
not foot due to rounding.
(a)
Measured in tons based on the stated weight of our product shipments.
Average
diluted shares
outstanding
decreased by
23 million
in the
second quarter
of fiscal
2025 from
the same
period a
year ago
primarily due to share repurchases, partially offset by option
exercises.
Six-Month Results
In
the
six-month
period
ended
November
24,
2024,
net
sales
and
organic
net
sales
essentially
matched
the
same
period
last
year.
Operating profit increased 10 percent
to $1,909 million, primarily driven
by a goodwill impairment charge
recorded in fiscal 2024 and
lower
restructuring charges
,
lower input
costs, and
an increase
in contributions
from volume
growth, partially
offset
by unfavorable
net price
realization and
mix and
an increase
in SG&A
expenses. Operating
profit margin
of 18.9
percent increased
160 basis
points
compared to
the same
period last
year.
Adjusted operating
profit of
$1,929 million
increased 2
percent on
a constant-currency
basis,
primarily driven
by lower
input costs
and an
increase in
contributions from
volume growth,
partially offset
by unfavorable
net price
realization
and mix
and an
increase in
SG&A expenses
.
Adjusted operating
profit margin
increased 30
basis points
to 19.1
percent.
Diluted
earnings
per
share
of
$2.45
increased
13
percent
in
the
six-month
period
ended
November
24,
2024,
and
adjusted
diluted
earnings
per
share of
$2.47
increased
6
percent
on
a
constant-currency
basis compared
to
the
same
period
last year
(see the
“Non-
GAAP Measures” section below for a description of our use of measures
not defined by GAAP).
A summary of our consolidated financial results for the six-month period
ended November 24, 2024, follows:
Six-Month Period Ended Nov.
24, 2024
In millions,
except per share
Six-Month Period
Ended Nov. 24,
2024 vs. Nov. 26,
2023
Percent of Net
Sales
Constant-
Growth (a)
$
10,088.2
Flat
Operating profit
1,909.4
10
%
18.9
%
Net earnings attributable to General Mills
1,375.6
8
%
Diluted earnings per share
$
2.45
13
%
Organic net sales growth rate (a)
Flat
Adjusted operating profit (a)
1,929.3
2
%
19.1
%
2
%
Adjusted diluted earnings per share (a)
$
2.47
6
%
6
%
(a)
See the “Non-GAAP Measures” section below for our use of measures not defined by GAAP.
24
Consolidated
net sales
Six-Month Period Ended
Nov. 24, 2024
Nov. 24, 2024 vs.
Nov. 26, 2023
Nov. 26, 2023
Net sales (in millions)
$
10,088.2
Flat
$
10,044.1
Contributions from volume growth (a)
1
pt
Net price realization and mix
(1)
pt
Foreign currency exchange
Flat
Note: Table may not foot due to rounding.
(a)
Measured in tons based on the stated weight of our product shipments.
Net sales for the six-month period ended November 24, 2024, essentially matched
the same period in fiscal 2024.
Components of organic net sales growth are shown in the following
table:
Six-Month Period Ended Nov.
24, 2024 vs.
Six-Month Period Ended Nov.
26, 2023
Contributions from organic volume growth (a)
1
pt
Organic net price realization and mix
(1)
pt
Organic net sales growth
Flat
Foreign currency exchange
Flat
Acquisitions
Flat
Net sales growth
Flat
Note: Table may not foot due to rounding.
(a)
Measured in tons based on the stated weight of our product shipments.
Organic net sales in the six-month period ended
November 24, 2024, essentially matched the same period in fiscal 2024.
decreased
$39 million
to
$6,468
million
in
the
six-month
period
ended
November
24,
2024,
compared
to
the
same
period in fiscal 2024. The decrease
was primarily driven by a
$133
million decline attributable to product
rate and mix, partially offset
by a $92
million increase attributable
to volume. We
recorded a $1 million
net decrease in
cost of sales
related to the
mark-to-market
valuation
of
certain
commodity
positions
and
grain
inventories
in
the
six-month
period
ended
November
24,
2024,
compared
to
a
$20 million
net
decrease
in
the
six-month
period
ended
November
26,
2023.
In
addition,
we
recorded
$1
million
of
restructuring
charges in
cost of
sales in
the six-month
period ended
November 24,
2024, compared
to $17
million of
restructuring charges
and $1
million
of
restructuring
initiative
project-related
costs
in
cost
of
sales
in
the
same
period
last
year
(please
refer
to
Note
3
to
the
Consolidated Financial Statements in Part I, Item 1 of this report).
SG&A expenses
increased $37
million to
$1,707 million in
the six-month
period ended
November
24, 2024,
compared to
the same
period
in fiscal
2024,
primarily
driven
by an
increase
in certain
compensation
and benefits
expenses
and
the addition
of
a pet
food
business in
Europe.
SG&A expenses
as a
percent of
net sales
increased 30
basis points
in the
six-month period
ended November
24,
2024, compared to the same period of fiscal 2024.
Restructuring, impairment, and
other exit costs
totaled $3 million in
the six-month period ended
November 24, 2024, compared
to
$125 million in the same
period last year.
We recorded
$3 million of charges
related to actions previously
announced in the six-month
period
ended
November
24, 2024,
compared
to $8
million
in
the
same period
last year.
In
fiscal 2024,
we recorded
a $117
million
non-cash goodwill impairment charge
related to our Latin America
reporting unit (please refer
to Note 3 to the
Consolidated Financial
Statements in Part I, Item 1 of this report).
Benefit plan non-service
income
totaled $28 million
in the six-month
period ended November
24, 2024, compared
to $37 million
in
the same period last year, primarily reflecting
higher amortization of losses and interest costs.
Interest, net
for the six-month
period ended November
24, 2024, increased
$13 million to $248
million compared to
the same period
of fiscal 2024, primarily driven by higher average long-term debt levels.
The
for
the six-month
period ended
November
24, 2024,
was 20.9
percent compared
to 20.0
percent in
the same
period
last
year.
The
0.9
percentage
point
increase
was
primarily
due
to
certain
nonrecurring
discrete
tax
benefits
in
fiscal
2024,
partially
offset
by
favorable
earnings
mix
by
jurisdiction
in
fiscal
2025.
Our
effective
tax
rate
excluding
certain
items
affecting
comparability was
20.9
percent in
the six-month
period ended
November 24,
2024, compared
to 21.0
percent in
the same
period last
25
year
(see
the
“Non-GAAP
Measures”
section
below
for
a
description
of
our
use
of
measures
not
defined
by
GAAP).
The
0.1
percentage
point
decrease
was
primarily
due
to
favorable
earnings
mix
by
jurisdiction
in
fiscal
2025,
partially
offset
by
certain
nonrecurring discrete tax benefits in fiscal 2024.
After-tax
earnings from
joint ventures
increased
to $49 million
for the
six-month period
ended November
24, 2024,
compared to
$48 million in
the same period
in fiscal 2024,
primarily due
to lower
input costs
and favorable
net price
realization and
mix at
CPW,
partially
offset
by higher
SG&A expenses
and
a decrease
in volume
at CPW.
On
a constant
-currency
basis, after-tax
earnings
from
joint ventures increased
5 percent (see
the “Non-GAAP Measures”
section below for
a description of
our use of
measures not defined
by GAAP). The components of our joint ventures’ net sales growth are
shown in the following table:
Six-Month Period Ended Nov.
24, 2024 vs.
Six-Month Period Ended Nov.
26, 2023
CPW
HDJ
Total
Contributions from volume growth (a)
(2)
pts
Flat
Net price realization and mix
3
pts
Flat
Net sales growth in constant currency
1
pt
Flat
1
pt
Foreign currency exchange
(2)
pts
(3)
pts
(2)
pts
Net sales growth
(1)
pt
(3)
pts
(1)
pt
Note: Table may not foot due to rounding.
(a)
Measured in tons based on the stated weight of our product shipments.
Average
diluted
shares
outstanding
decreased
by
25 million
in
the
six-month
period
ended
November
24,
2024,
from
the
same
period a year ago primarily due to share repurchases, partially offset
by option exercises.
SEGMENT OPERATING
RESULTS
Our
businesses
are
organized
into
four
operating
segments:
North
America
Retail,
International,
North
America
Pet,
and
North
America Foodservice. Please refer
to Note 16 of the
Consolidated Financial Statements in
Part I, Item 1 of
this report for a description
of our operating segments.
North America Retail Segment Results
North America Retail net sales were as follows:
Quarter Ended
Six-Month Period Ended
Nov. 24,
2024
Nov. 24, 2024 vs
Nov. 26, 2023
Nov. 26,
2023
Nov. 24,
2024
Nov. 24, 2024 vs
Nov. 26, 2023
Nov. 26,
2023
Net sales (in millions)
$
3,321.5
Flat
$
3,305.0
$
6,338.1
(1)
%
$
6,378.0
Contributions from volume growth (a)
(1)
pt
(2)
pts
Net price realization and mix
1
pt
1
pt
Foreign currency exchange
Flat
Flat
Note: Table may
not foot due to rounding.
(a)
Measured in tons based on the stated weight of our product shipments.
North America Retail net sales in the second quarter of fiscal 2025 essentially matched
the same period in fiscal 2024.
North America
Retail net
sales decreased
1 percent
in the
six-month period
ended November
24, 2024,
compared to
the same
period
in fiscal 2024, driven by a decrease in contributions from volume growth, partially
offset by favorable net price realization and mix.
26
The components of North America Retail organic net
sales growth are shown in the following table:
Quarter Ended
Six-Month Period Ended
Nov. 24, 2024
Nov. 24, 2024
Contributions from organic volume growth (a)
(1)
pt
(2)
pts
Organic net price realization and mix
1
pt
1
pt
Organic net sales growth
1
pt
Flat
Foreign currency exchange
Flat
Flat
Net sales growth
Flat
(1)
pt
Note: Table may
not foot due to rounding.
(a) Measured in tons based on the stated weight of our product shipments.
North America Retail
organic net
sales increased 1
percent in the
second quarter of
fiscal 2025,
compared to the
same period in
fiscal
2024,
driven by
favorable organic
net price
realization and
mix,
partially offset
by a
decrease in
contributions from
organic
volume
growth.
North
America
Retail organic
net sales
for
the six-month
period ended
November 24,
2024,
essentially matched
the same
period in
fiscal 2024.
North America Retail net sales percentage change by operating unit are shown
in the following table:
Quarter Ended
Six-Month Period Ended
Nov. 24, 2024
Nov. 24, 2024
U.S. Snacks
1
%
(2)
%
U.S. Morning Foods
4
%
1
%
U.S. Meals & Baking Solutions
(1)
%
Flat
Canada (a)
(4)
%
(1)
%
Total
Flat
(1)
%
(a)
On a constant-currency basis, Canada
net sales decreased 4 percent
in the second quarter of
fiscal 2025 and increased 1
percent in
the six-month
period ended
November 24,
2024, compared
to the
same periods
in fiscal
2024.
See the
“Non-GAAP Measures”
section below for our use of this measure not defined by GAAP.
Segment
operating
profit
of
$862 million
in
the
second
quarter
of
fiscal
2025
essentially
matched
the
same
period
in
fiscal
2024.
Segment
operating
profit
on
a
constant-currency
basis
in
the
second
quarter
of
fiscal
2025
essentially
matched
the
same
period
in
fiscal 2024 (see the “Non-GAAP Measures” section below for our use of this measure
not defined by GAAP).
Segment
operating
profit
decreased
3
percent
to
$1,608 million
in
the
six-month
period
ended
November
24,
2024,
compared
to
$1,658 million in
the same
period in
fiscal 2024,
primarily driven
by higher
input costs
and a
decrease in
contributions from
volume
growth,
partially
offset
by
favorable
net
price
realization
and
mix.
Segment
operating
profit
decreased
3
percent
on
a
constant-
currency basis
in the
six-month period
ended November
24, 2024,
compared to
the same
period in
fiscal 2024
(see the
“Non-GAAP
Measures” section below for our use of this measure not defined by GAAP).
International Segment Results
International net sales were as follows:
Quarter Ended
Six-Month Period Ended
Nov. 24,
2024
Nov. 24, 2024 vs
Nov. 26, 2023
Nov. 26,
2023
Nov. 24,
2024
Nov. 24, 2024 vs
Nov. 26, 2023
Nov. 26,
2023
Net sales (in millions)
$
690.6
1
%
$
683.1
$
1,407.6
1
%
$
1,398.9
Contributions from volume growth (a)
5
pts
6
pts
Net price realization and mix
(4)
pts
(5)
pts
Foreign currency exchange
Flat
(1)
pt
Note: Table may
not foot due to rounding.
(a)
Measured in tons based on the stated weight of our product shipments.
International net
sales increased
1 percent
in the second
quarter of fiscal
2025, compared
to the same
period in
fiscal 2024, driven
by
an increase in contributions from volume growth, partially offset
by unfavorable net price realization and mix.
27
International net
sales increased
1 percent
in the
six-month period
ended November
24, 2024,
compared to
the same
period in
fiscal
2024,
driven
by
an
increase
in
contributions
from
volume
growth,
partially
offset
by
unfavorable
net
price
realization
and
mix
and
unfavorable foreign currency exchange.
The components of International organic net sales growth
are shown in the following table:
Quarter Ended
Six-Month Period Ended
Nov. 24, 2024
Nov. 24, 2024
Contributions from organic volume growth (a)
3
pts
4
pts
Organic net price realization and mix
(5)
pts
(6)
pts
Organic net sales growth
(3)
pts
(2)
pts
Foreign currency exchange
Flat
(1)
pt
Acquisition (b)
4
pts
3
pts
Net sales growth
1
pt
1
pt
Note: Table may
not foot due to rounding.
(a) Measured in tons based on the stated weight of our product shipments.
(b) Acquisition of a pet food business in Europe in fiscal 2024. Please see Note 2 to
the Consolidated Financial Statements in Part I,
International
organic
net sales
decreased
3 percent
in the
second quarter
of fiscal
2025,
compared to
the same
period in
fiscal 2024,
driven
by
unfavorable
organic
net
price
realization
and
mix,
partially
offset
by
an
increase
in
contributions
from
organic
volume
growth.
International organic net
sales decreased 2 percent
in the six-month period
ended November 24, 2024,
compared to the same period
in
fiscal 2024,
driven by
unfavorable organic
net price
realization and
mix, partially
offset by
an increase
in contributions
from organic
volume growth.
Segment
operating
profit
decreased
31
percent
to
$24
million
in
the
second
quarter
of
fiscal
2025,
compared
to
$35 million
in
the
same period
in fiscal 2024,
primarily driven
by unfavorable
net price realization
and mix and
higher SG&A expenses,
partially offset
by lower input
costs. Segment operating
profit decreased 45
percent on a
constant-currency basis in
the second quarter
of fiscal 2025,
compared to the
same period in
fiscal 2024 (see
the “Non-GAAP Measures”
section below for
our use of
this measure not
defined by
GAAP).
Segment
operating
profit
decreased
47
percent
to
$45 million
in
the
six-month
period
ended
November
24,
2024,
compared
to
$85 million
in
the
same
period
in
fiscal
2024,
primarily
driven
by
unfavorable
net
price
realization
and
mix
and
higher
SG&A
expenses,
partially
offset
by
lower
input
costs
and
an
increase
in
contributions
from
volume
growth.
Segment
operating
profit
decreased 56 percent
on a constant-currency
basis in the six-month
period ended November
24, 2024, compared
to the same period
in
fiscal 2024 (see the “Non-GAAP Measures” section below for our use of this measure
not defined by GAAP).
North America Pet Segment Results
North America Pet net sales were as follows:
Quarter Ended
Six-Month Period Ended
Nov. 24,
2024
Nov. 24, 2024 vs
Nov. 26, 2023
Nov. 26,
2023
Nov. 24,
2024
Nov. 24, 2024 vs
Nov. 26, 2023
Nov. 26,
2023
Net sales (in millions)
$
595.8
5
%
$
569.3
$
1,171.9
2
%
$
1,149.2
Contributions from volume growth (a)
9
pts
6
pts
Net price realization and mix
(5)
pts
(4)
pts
Foreign currency exchange
Flat
Flat
Note: Table may
not foot due to rounding.
(a)
Measured in tons based on the stated weight of our product shipments.
North
America
Pet
net
sales
increased
5
percent
in
the
second
quarter
of
fiscal
2025,
compared
to
the
same
period
in
fiscal
2024,
driven by an increase in contributions from volume growth, partially offset
by unfavorable net price realization and mix.
North America
Pet net
sales increased
2 percent
in the
six-month period
ended November
24, 2024,
compared to
the same
period in
fiscal 2024, driven by an increase in contributions from volume growth,
partially offset by unfavorable net price realization and mix.
28
The components of North America Pet organic net sales growth are
shown in the following table:
Quarter Ended
Six-Month Period Ended
Nov. 24, 2024
Nov. 24, 2024
Contributions from organic volume growth (a)
9
pts
6
pts
Organic net price realization and mix
(5)
pts
(4)
pts
Organic net sales growth
5
pts
2
pts
Foreign currency exchange
Flat
Flat
Net sales growth
5
pts
2
pts
Note: Table may
not foot due to rounding.
(a) Measured in tons based on the stated weight of our product shipments.
North America
Pet organic
net sales
increased 5
percent in
the second
quarter of
fiscal 2025,
compared to
the same
period in
fiscal
2024, driven by
an increase in
contributions from organic
volume growth, partially
offset by
unfavorable organic
net price realization
and mix.
North
America
Pet organic
net sales
increased
2 percent
in
the
six-month
period
ended November
24, 2024,
compared
to
the same
period in
fiscal 2024,
driven by
an increase
in contributions
from organic
volume growth,
partially offset
by unfavorable
organic net
price realization and mix.
Segment operating
profit increased
36 percent
to $139
million in
the second
quarter of
fiscal 2025,
compared
to $102 million
in the
same period in fiscal 2024,
primarily driven by lower
input costs and an increase
in contributions from volume growth,
partially offset
by
unfavorable
net
price
realization
and
mix
and
higher
SG&A
expenses,
including
increased
media
and
advertising
expenses.
Segment operating profit
increased 36 percent on
a constant-currency basis in the
second quarter of fiscal
2025, compared to the same
period in fiscal 2024 (see the “Non-GAAP Measures” section below
for our use of this measure not defined by GAAP).
Segment
operating
profit
increased
21
percent
to
$259 million
in
the
six-month
period
ended
November
24,
2024,
compared
to
$214 million
in the
same period
in fiscal
2024,
primarily
driven by
lower input
costs and
an increase
in contributions
from
volume
growth,
partially
offset
by
unfavorable
net
price
realization
and
mix
and
higher
SG&A
expenses,
including
increased
media
and
advertising
expenses.
Segment
operating
profit
increased
21
percent
on
a
constant-currency
basis
in
the
six-month
period
ended
November
24,
2024,
compared to
the same
period
in fiscal
2024
(see the
“Non-GAAP Measures”
section below
for our
use of
this
measure not defined by GAAP).
North America Foodservice Segment Results
North America Foodservice net sales were as follows:
Quarter Ended
Six-Month Period Ended
Nov. 24,
2024
Nov. 24, 2024 vs
Nov. 26, 2023
Nov. 26,
2023
Nov. 24,
2024
Nov. 24, 2024 vs
Nov. 26, 2023
Nov. 26,
2023
Net sales (in millions)
$
630.0
8
%
$
582.0
$
1,166.2
4
%
$
1,118.0
Contributions from volume growth (a)
5
pts
3
pts
Net price realization and mix
3
pts
1
pt
Foreign currency exchange
Flat
Flat
Note: Table may
not foot due to rounding.
(a)
Measured in tons based on the stated weight of our product shipments.
North America
Foodservice net
sales increased
8 percent
in the
second quarter
of fiscal
2025,
compared to
the same
period in
fiscal
2024, driven by an increase in contributions from volume growth and favorable
net price realization and mix.
North
America Foodservice
net sales
increased
4 percent
in the
six-month period
ended November
24, 2024,
compared to
the same
period in fiscal 2024, driven by an increase in contributions from volume growth
and favorable net price realization and mix.
29
The components of North America Foodservice organic
net sales growth are shown in the following table:
Quarter Ended
Six-Month Period Ended
Nov. 24, 2024
Nov. 24, 2024
Contributions from organic volume growth (a)
5
pts
3
pts
Organic net price realization and mix
3
pts
1
pt
Organic net sales growth
8
pts
4
pts
Foreign currency exchange
Flat
Flat
Net sales growth
8
pts
4
pts
Note: Table may
not foot due to rounding.
(a) Measured in tons based on the stated weight of our product shipments.
North America Foodservice
organic net sales
increased 8 percent
in the second
quarter of fiscal 2025
,
compared to the
same period in
fiscal 2024,
driven by an increase in contributions from organic volume growth
and favorable organic net price realization and mix.
North America Foodservice
organic net sales
increased 4 percent
in the six-month
period ended November
24, 2024, compared
to the
same
period
in
fiscal
2024,
driven
by
an
increase
in
contributions
from
organic
volume
growth
and
favorable
organic
net
price
realization and mix.
Segment
operating
profit
increased 24
percent
to $118
million
in
the second
quarter
of fiscal
2025,
compared
to $96
million
in
the
same period in
fiscal 2024, primarily
driven by favorable
net price realization
and mix. Segment
operating profit increased
24 percent
on a
constant-currency
basis in
the second
quarter of
fiscal 2025,
compared to
the same
period
in fiscal
2024 (see
the “Non-GAAP
Measures” section below for our use of this measure not defined by GAAP).
Segment
operating
profit
increased
23
percent
to
$190 million
in
the
six-month
period
ended
November
24,
2024,
compared
to
$155 million in
the same
period in
fiscal 2024,
primarily driven
by favorable
net price
realization and
mix. Segment
operating profit
increased 23 percent
on a constant-currency
basis in the
six-month period ended
November 24, 2024,
compared to the
same period in
fiscal 2024 (see the “Non-GAAP Measures” section below for our use of this measure
not defined by GAAP).
UNALLOCATED
CORPORATE
ITEMS
Unallocated corporate expenses
totaled $65 million
in the second
quarter of fiscal
2025, compared
to $157 million
in the same period
in fiscal
2024. In
the second
quarter of
fiscal 2025,
we recorded
a $29
million net
decrease in
expense related
to the
mark-to-market
valuation of
certain commodity
positions and grain
inventories, compared
to a $25
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
second quarter
of fiscal
2025,
compared to
$20 million
of net
losses related
to valuation
adjustments of
certain corporate
investments in
the second
quarter
of
fiscal
2024.
In
addition,
we
recorded
$9
million
of
transaction
costs
related
to
the
definitive
agreement
to
acquire
Whitebridge
Pet
Brands’
North
American
premium
cat
feeding
and
pet
treating
business
(Whitebridge
Pet
Brands
acquisition)
and
definitive
agreements to
sell our
North American
yogurt businesses
in the
second
quarter of
fiscal 2025,
compared to
$1 million
of
transaction costs
in the same period
last year.
We
recorded $8 million
of restructuring charge
s
in the second
quarter of fiscal
2024.
In
addition, we recorded $2 million of integration costs related
to the acquisition of a pet food business in Europe in the
second quarter of
fiscal 2025.
Unallocated corporate
expenses totaled
$189 million in
the six-month period
ended November 24,
2024, compared to
$244 million in
the same
period in
fiscal 2024.
In the
six-month period
ended November
24, 2024,
we recorded
a $1 million
net decrease
in expense
related to the
mark-to-market valuation
of certain commodity
positions and grain
inventories, compared
to a $20
million net decrease
in
expense
in
the
same
period
last year.
We
recorded
$4 million
of
net
losses related
to
valuation
adjustments
on
certain
corporate
investments in the six-month period
ended November 24, 2024, compared
to $22 million of net losses
related to valuation adjustments
and
the
loss
on
sale
of
certain
corporate
investments
in
the
same
period
in
fiscal
2024.
In
addition,
we
recorded
$1
million
of
restructuring charges
and an immaterial
amount of restructuring
initiative project-related
costs in cost of
sales in the
six-month period
ended November
24, 2024,
compared to
$17 million
of restructuring
charges and
$1 million
of restructuring
initiative project-related
costs in cost
of sales in
the same
period last year.
Compensation expense
related to stock-based
payments decreased
in the six-month
period ended November
24, 2024, compared to
the same period in
fiscal 2024. In the
six-month period ended November
24, 2024, we
recorded $9
million of
transaction costs
related to
the definitive
agreement for
the Whitebridge
Pet Brands
acquisition and
definitive
agreements to sell our North American
yogurt businesses, compared to $1 million
of transaction costs in the same period
last year.
We
recorded
$4
million
of
integration
costs
related
to
the
acquisition
of
a
pet
food
business
in
Europe
in
the
six-month
period
ended
30
LIQUIDITY
AND CAPITAL
RESOURCES
During the
six-month period
ended November
24, 2024,
cash provided by
operations was
$1,775 million compared
to $1,496 million
in the same period
last year.
The $279 million increase
was primarily driven by
a $338 million change
in current assets and
liabilities.
The
$338
million
change
in
current
assets
and
liabilities
was
primarily
driven
by
a
$596
million
change
in
the
timing
of
accounts
payable,
partially offset
by a
$183 million
change in
inventories due
to higher
inventory levels
and a
$126
million change
in prepaid
expenses and other current assets primarily driven by changes in certain
marketable securities.
Cash used by
investing activities during
the six-month period
ended November 24,
2024, was $306 million
compared to $316 million
for the same period in
fiscal 2024. During the first
quarter of fiscal 2025,
we paid $8 million related
to a purchase price holdback
after
certain
closing
conditions
were
met
for
the
acquisition
of
a
pet
food
business
in
Europe
in
the
fourth
quarter
of
fiscal
2024.
In
addition,
we spent
$301 million
on purchases
of land,
buildings, and
equipment in
the six-month
period ended
November 24,
2024,
compared to $294 million in the same period last year.
Cash
generated
by
financing
activities
during
the
six-month
period
ended
November
24,
2024,
was
$422
million
compared
to
$1,174 million of
cash used
by financing
activities in
the same
period in
fiscal 2024.
We
had $1,754
million of
net debt issuances
in
the six-month
period ended
November 24,
2024, compared
to $867
million of
net debt
issuances in
the same
period a
year ago.
We
paid $600 million for purchases
of common stock for
treasury in the six-month period
ended November 24, 2024, compared
to $1,302
million in the
same period in fiscal
2024.
In addition, we paid
$676 million of dividends
in the six-month period
ended November 24,
2024,
compared to $691 million in the same period last year.
As of
November
24,
2024, we
had
$442 million
of cash
and cash
equivalents
in foreign
jurisdictions. In
anticipation
of repatriating
funds
from
foreign
jurisdictions,
we
record
local
country
withholding
taxes
on
our
international
earnings,
as
applicable.
We
may
repatriate our
cash and
cash equivalents
held by
our foreign
subsidiaries without
such funds
being subject
to further
U.S. income
tax
liability. Earnings
prior to fiscal 2018 from our foreign subsidiaries remain permanently reinvested in
those jurisdictions.
The following table details the fee-paid committed and uncommitted credit
lines we had available as of November 24, 2024:
In Billions
Amount
Borrowed
Amount
Committed credit facility expiring October 2029
$
2.7
$
-
Uncommitted credit facilities
0.7
-
Total committed
and uncommitted credit facilities
$
3.4
$
-
To ensure availability
of funds, we maintain bank credit lines and have commercial paper programs
available to us in the United States
and Europe.
Certain
of
our
long-term
debt
agreements,
our
credit
facilities,
and
our
noncontrolling
interests
contain
restrictive
covenants.
As
of
November 24, 2024, we were in compliance with all of these covenants.
We
have $1,822
million of
long-term debt
maturing in
the next
12 months
that is
classified as
current, including
$800 million
of 4.0
percent fixed-rate notes
due April 17,
2025, €500 million
of 0.125 percent
fixed-rate notes due
November 15,
2025, and $500
million
of 5.241
percent fixed-rate
notes due
November 18,
2025. We
believe that
cash flows
from operations,
together with
available short-
and long-term debt financing, will be adequate to meet our liquidity
and capital needs for at least the next 12 months.
The
third-party
holder
of
the
General
Mills
Cereals,
LLC
(GMC)
Class A
Interests
receives
quarterly
preferred
distributions
from
available net
income based
on the application
of a
floating preferred
return rate
to the
holder’s capital
account balance
established in
the most recent mark-to-market valuation
(currently $252 million). On June 1, 2024,
the floating preferred return rate on GMC’s
Class
A Interests was reset to the
sum of the three-month Term
SOFR plus 261 basis points.
The preferred return rate is adjusted
every three
years through a negotiated agreement with the Class A Interest holder
or through a remarketing auction.
We
have an option
to purchase the
Class A Interests for
consideration equal to
the then current
capital account value,
plus any unpaid
preferred return
and the
prescribed make-whole
amount. If
we purchase
these interests,
any change
in the
third-party holder’s
capital
account
from
its
original
value
will
be
charged
directly
to
retained
earnings
and
will
increase
or
decrease
the
net
earnings
used
to
calculate EPS in that period.
CRITICAL ACCOUNTING ESTIMATES
Our significant accounting policies are described in Note 2
to the Consolidated Financial Statements included in
our Annual Report on
Form
10-K for
the fiscal
year ended
May 26,
2024. The
accounting policies
used in
preparing our
interim fiscal
2025 Consolidated
31
Financial Statements are the
same as those described
in our Form 10-K.
Please see Note 1 to
the Consolidated Financial Statements
in
Part I, Item 1 of this report for additional information.
Our
critical
accounting
estimates
are
those
that
have
meaningful
impact
on
the
reporting
of
our
financial
condition
and
results
of
operations.
These estimates
include
our accounting
for revenue
recognition,
valuation of
long-lived
assets, intangible
assets, income
taxes,
and
defined
benefit
pension,
other
postretirement
benefit,
and
postemployment
benefit
plans.
The
assumptions
and
methodologies used
in the
determination of
those estimates
as of
November 24,
2024, are
the same
as those
described in
our Annual
Report on Form 10-K for the fiscal year ended May 26, 2024.
Our
annual
goodwill
and
indefinite-lived
intangible
assets
impairment
test
was
performed
on
the
first
day
of
the
second
quarter
of
fiscal
2025,
and
we
determined
there
was
no
impairment
of
our
intangible
assets
as
their
related
fair
values
were
substantially
in
excess of the
carrying values,
except for
the
Uncle Toby’s
brand intangible
asset. In addition,
while having
significant coverage
as of
our
fiscal
2025
assessment
date,
the
Progresso
,
Nudges,
True
Chews,
and
Kitano
brand
intangible
assets
had
risk
of
decreasing
coverage. We will continue
to monitor these businesses for potential impairment.
RECENTLY
ISSUED ACCOUNTING PRONOUNCEMENTS
In November 2024, the Financial Accounting
Standards Board (FASB
)
issued Accounting Standards Update (ASU)
2024-03 requiring
additional income
statement disclosures.
The ASU
requires the
disaggregation
of specific
categories of
expenses underlying
the line
items presented
on the
income statement.
Additionally,
the ASU
requires enhanced
disclosure of
selling expenses.
The requirements
of the ASU are effective for annual periods beginning
after December 15, 2026, and interim periods within fiscal years
beginning after
December
15,
2027.
For
us,
annual
reporting
requirements
will
be
effective
for
our
fiscal
2028
Form
10-K
and
interim
reporting
requirements will be
effective beginning
with our first
quarter of fiscal
2029. Early adoption
is permitted and
the amendments
should
be applied on a prospective
basis. Retrospective application is permitted.
We are
in the process of analyzing
the impact of the ASU on
In March 2024, the Securities
and Exchange Commission (SEC)
issued final rules on the
enhancement and standardization
of climate-
related disclosures. The rules require
disclosure of, among other things:
material climate-related risks; activities
to mitigate or adapt
to
such
risks;
governance
and
management
of
such
risks;
and
material
greenhouse
gas
(GHG)
emissions
from
operations
owned
or
controlled
(Scope
1)
and/or
indirect
emissions
from
purchased
energy
consumed
in
operations
(Scope
2).
Additionally,
the
rules
require disclosure
in the
notes to
the financial
statements of
the effects
of severe
weather events
and other
natural conditions,
subject
to
certain
materiality
thresholds.
The
SEC
has
issued
a
stay
on
the
final
rules
due
to
litigation
and
the
effective
date
is
delayed
indefinitely. We
are in the process of analyzing the impact of the rules on our disclosures.
In
December
2023,
the
FASB
issued
ASU
2023-09
requiring
enhanced
income
tax
disclosures.
The
ASU
requires
disclosure
of
specific
categories
and
disaggregation
of
information
in
the
rate
reconciliation
table.
The
ASU
also
requires
disclosure
of
disaggregated
information
related
to
income
taxes
paid,
income
or
loss
from
continuing
operations
before
income
tax
expense
or
benefit, and
income tax
expense or benefit
from continuing
operations. The
requirements of
the ASU are
effective for
annual periods
beginning after December 15, 2024,
which for us is fiscal 2026.
Early adoption is permitted
and the amendments should be
applied on
a prospective
basis. Retrospective
application is
permitted. We
are in
the process
of analyzing
the impact
of the
ASU on
our related
disclosures.
In
November
2023,
the
FASB
issued
ASU
2023-07
requiring
enhanced
segment
disclosures.
The
ASU
requires
disclosure
of
significant
segment
expenses
regularly
provided
to
the
chief
operating
decision
maker
(CODM)
included
within
segment
operating
profit
or
loss.
Additionally,
the
ASU
requires
a
description
of
how
the
CODM
utilizes
segment
operating
profit
or
loss
to
assess
segment performance.
The requirements
of the
ASU are effective
for annual
periods beginning
after December
15, 2023,
and interim
periods within
fiscal years
beginning after
December 15,
2024. For
us, annual
reporting requirements
will be
effective for
our fiscal
2025 Form 10-K
and interim reporting requirements
will be effective
beginning with our first
quarter of fiscal
2026. Early adoption
is
permitted and retrospective application
is required for all
periods presented. We
are in the process
of analyzing the impact
of the ASU
on our related disclosures.
32
NON-GAAP MEASURES
We
have
included
in
this
report
measures
of
financial
performance
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.
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
judgment, significantly affect the year-to-year
assessment of operating results.
The following are descriptions of significant items impacting comparability
of our results.
Transaction costs
Fiscal 2025 transaction
costs related to
the definitive agreement
for the Whitebridge
Pet Brands acquisition
and definitive agreements
to
sell
our
North
American
yogurt
businesses.
Immaterial
transaction
costs
incurred
in
fiscal
2024.
Please
see
Note
2
to
the
Consolidated Financial Statements in Part I, Item 1 of this report.
Restructuring charges and project-related costs
Restructuring charges and
project-related costs related to previously
announced restructuring actions recorded
in fiscal 2025 and fiscal
2024. Please see Note 3 to the Consolidated Financial Statements in Part I, Item 1
of this report.
Acquisition integration costs
Integration
costs
related
to
the
acquisition
of
a
pet
food
business
in
Europe
recorded
in
fiscal
2025.
Integration
costs
primarily
resulting from the acquisition of TNT Crust recorded in fiscal 2024. Please see Note
2 to the Consolidated Financial Statements in Part
I, Item 1 of this report.
Investment activity, net
Valuation
adjustments of certain corporate investments in fiscal 2025 and fiscal 2024.
Mark-to-market effects
Net
mark-to-market
valuation
of
certain
commodity
positions
recognized
in
unallocated
corporate
items.
Please
see
Note
6
to
the
Consolidated Financial Statements in Part I, Item 1 of this report.
Goodwill impairment
Non-cash
goodwill
impairment
charge
related
to
our
Latin
America
reporting
unit
in
fiscal
2024.
Please
see
Note
4
to
the
Consolidated Financial Statements in Part I, Item 1 of this report.
Product recall
Costs related to the fiscal 2023 voluntary recall of certain international
Häagen-Dazs
ice cream products recorded in fiscal 2024.
Organic Net Sales Growth Rates
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
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 53
rd
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 Consolidated
Results of
Operations and
Results of
Segment Operations discussions in the MD&A above.
33
Adjusted Operating Profit as a Percent of Net Sales (Adjusted Operating
Profit Margin)
We believe
this measure provides useful information
to investors because it is important
for assessing our operating profit margin
on a
comparable basis.
Our adjusted operating profit margins are calculated as follows:
Quarter Ended
Nov. 24, 2024
Nov. 26, 2023
In Millions
Value
Percent of
Net Sales
Percent of
Net Sales
Operating profit as reported
$
1,077.9
20.6
%
$
811.8
15.8
%
Transaction costs
8.9
0.2
%
0.6
-
%
Restructuring charges
1.3
-
%
14.8
0.3
%
Acquisition integration costs
2.3
-
%
-
-
%
Investment activity, net
2.8
0.1
%
19.6
0.4
%
Mark-to-market effects
(29.4)
(0.6)
%
25.1
0.5
%
Project-related costs
0.1
-
%
0.3
-
%
Goodwill impairment
-
-
%
117.1
2.3
%
Product recall
-
-
%
0.2
-
%
Adjusted operating profit
$
1,064.0
20.3
%
$
989.4
19.3
%
Six-Month Period Ended
Nov. 24, 2024
Nov. 26, 2023
In Millions
Percent of
Net Sales
Percent of
Net Sales
Operating profit as reported
$
1,909.4
18.9
%
$
1,741.8
17.3
%
Transaction costs
8.9
0.1
%
0.6
-
%
Restructuring charges
4.2
-
%
24.6
0.2
%
Acquisition integration costs
3.9
-
%
0.2
-
%
Investment activity, net
3.2
-
%
22.5
0.2
%
Mark-to-market effects
(0.6)
-
%
(19.8)
(0.2)
%
Project-related costs
0.2
-
%
1.1
-
%
Goodwill impairment
-
-
%
117.1
1.2
%
Product recall
-
-
%
0.4
-
%
Adjusted operating profit
$
1,929.3
19.1
%
$
1,888.4
18.8
%
Note: Tables
may not foot due to rounding.
For more information on the reconciling items, please refer to the Significant Items Impacting Comparability section above.
34
Adjusted Operating Profit and Related Constant-currency Growth Rate
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.
Additionally,
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
Six-Month Period Ended
Nov. 24, 2024
Nov. 26, 2023
Change
Nov. 24, 2024
Nov. 26, 2023
Change
Operating profit as reported
$
1,077.9
$
811.8
33
%
$
1,909.4
$
1,741.8
10
%
Transaction costs
8.9
0.6
8.9
0.6
Restructuring charges
1.3
14.8
4.2
24.6
Acquisition integration costs
2.3
-
3.9
0.2
Investment activity, net
2.8
19.6
3.2
22.5
Mark-to-market effects
(29.4)
25.1
(0.6)
(19.8)
Project-related costs
0.1
0.3
0.2
1.1
Goodwill impairment
-
117.1
-
117.1
Product recall
-
0.2
-
0.4
Adjusted operating profit
$
1,064.0
$
989.4
8
%
$
1,929.3
$
1,888.4
2
%
Foreign currency exchange impact
Flat
Flat
Adjusted operating profit growth,
on a constant-currency basis
7
%
2
%
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 Rate
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
Six-Month Period Ended
Per Share Data
Nov. 24, 2024
Nov. 26, 2023
Change
Nov. 24, 2024
Nov. 26, 2023
Change
Diluted earnings per share, as reported
$
1.42
$
1.02
39
%
$
2.45
$
2.16
13
%
Transaction costs
0.01
-
0.01
-
Restructuring charges
0.01
0.02
0.01
0.03
Acquisition integration costs
0.01
-
0.01
-
Goodwill impairment
-
0.14
-
0.14
Mark-to-market effects
(0.04)
0.03
-
(0.03)
Investment activity, net
-
0.03
-
0.03
Adjusted diluted earnings per share
$
1.40
$
1.25
12
%
$
2.47
$
2.34
6
%
Foreign currency exchange impact
Flat
Flat
Adjusted diluted earnings per share
growth, on a constant-currency basis
12
%
6
%
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.
35
Constant-currency After-tax Earnings from Joint Ventures
Growth Rates
We
believe that
this measure
provides useful
information to
investors because
it provides
transparency to
underlying performance
of
our joint
ventures by
excluding the
effect
that foreign
currency exchange
rate fluctuations
have on
year-to-year
comparability given
volatility in foreign currency exchange markets.
After-tax earnings from joint ventures growth rates on a constant-currency
basis are calculated as follows:
Percentage Change in
After-Tax
Earnings from Joint
Impact of Foreign
Currency
Exchange
Percentage Change in After-Tax
Earnings from Joint Ventures
on Constant-Currency Basis
Quarter Ended Nov. 24,
2024
24
%
2
pts
23
%
Six-Month Period Ended Nov.
24, 2024
3
%
(1)
pt
5
%
Note: Table may not foot due to rounding.
Net Sales Growth Rates for Our Canada Operating Unit on Constant-currency
Basis
We
believe
that
this
measure
of
our
Canada
operating
unit
net
sales
provides
useful
information
to
investors
because
it
provides
transparency to
the underlying
performance for
the Canada operating
unit within our
North America Retail
segment by
excluding the
effect
that
foreign
currency
exchange
rate
fluctuations
have
on
year-to-year
comparability
given
volatility
in
foreign
currency
exchange markets.
Net sales growth rates for our Canada operating unit on a constant-currency
basis are calculated as follows:
Percentage Change in
Net Sales
as Reported
Impact of Foreign
Currency
Exchange
Percentage Change in
Net Sales on Constant-
Currency Basis
Quarter Ended Nov. 24,
2024
(4)
%
Flat
(4)
%
Six-Month Period Ended Nov.
24, 2024
(1)
%
(2)
pts
1
%
Note: Table may not foot due to rounding.
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.
36
Our segments’ operating profit growth rates on a constant-currency
basis are calculated as follows:
Quarter Ended Nov. 24, 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
(31)
%
14
pts
(45)
%
North America Pet
36
%
Flat
36
%
North America Foodservice
24
%
Flat
24
%
Six-Month Period Ended Nov.
24, 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
(3)
%
Flat
(3)
%
International
(47)
%
9
pts
(56)
%
North America Pet
21
%
Flat
21
%
North America Foodservice
23
%
Flat
23
%
Note: Table may not foot due to rounding.
Adjusted Effective Income Tax
Rates
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:
Six-Month Period Ended
Nov. 24, 2024
Nov. 26, 2023
Nov. 24, 2024
Nov. 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
$
967.1
$
194.8
$
714.1
$
136.0
$
1,688.9
$
352.2
$
1,544.1
$
309.2
Transaction costs
8.9
2.0
0.6
-
8.9
2.0
0.6
-
Restructuring charges
1.3
0.3
14.8
4.5
4.2
1.0
24.6
9.2
Acquisition integration costs
2.3
0.5
-
-
3.9
0.9
0.2
0.1
Investment activity, net
2.8
0.6
19.6
4.2
3.2
0.7
22.5
5.2
Mark-to-market effects
(29.4)
(6.7)
25.1
5.7
(0.6)
(0.1)
(19.8)
(4.6)
Project-related costs
0.1
0.1
0.3
0.1
0.2
0.1
1.1
0.4
Goodwill impairment
-
-
117.1
34.7
-
-
117.1
34.7
Product recall
-
-
0.2
-
-
-
0.4
0.1
As adjusted
$
953.2
$
191.6
$
891.7
$
185.2
$
1,708.8
$
356.9
$
1,690.8
$
354.2
Effective tax rate:
As reported
20.1%
19.0%
20.9%
20.0%
As adjusted
20.1%
20.8%
20.9%
21.0%
Sum of adjustments to income taxes
$
(3.2)
$
49.4
$
4.6
$
45.1
560.4
583.4
562.2
587.4
Impact of income tax adjustments
$
0.01
$
(0.08)
$
(0.01)
$
(0.08)
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.
37
Glossary
AOCI
. Accumulated other comprehensive income (loss).
Adjusted diluted EPS.
Diluted EPS adjusted for certain items affecting year-to-year
comparability.
Adjusted operating profit.
Operating profit adjusted for certain items affecting year-to-year
comparability.
Adjusted operating profit
margin.
Operating profit adjusted
for certain items
affecting year-over-year
comparability,
divided by net
sales.
Constant currency.
Financial results
translated to
United States
dollars using
constant foreign
currency exchange
rates based
on the
rates
in
effect
for
the
comparable
prior-year
period.
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.
Core working capital.
Accounts receivable plus inventories less accounts payable.
Derivatives.
Financial instruments such
as futures, swaps,
options, and forward
contracts that we
use to manage
our risk arising
from
changes in commodity prices, interest rates, foreign exchange rates, and stock
prices.
Euribor.
Euro Interbank Offered Rate.
For purposes
of fair
value measurement,
we categorize
assets and
liabilities into
one of
three levels
based on
the assumptions
(inputs) used
in valuing
the asset or
liability.
Level 1 provides
the most reliable
measure of
fair value, while
Level 3
generally requires significant management judgment. The three levels are
defined as follows:
Level 1:
Unadjusted quoted prices in active markets for identical assets or liabilities.
Level 2:
Observable inputs other than quoted prices included in
Level 1, such as quoted prices for similar assets or liabilities in
active markets or quoted prices for identical assets or liabilities in inactive markets.
Level 3:
Unobservable inputs reflecting management’s
assumptions about the inputs used in pricing the asset or liability.
Free cash flow.
Net cash provided by operating activities less purchases of land, buildings, and equipment.
Generally Accepted
Accounting Principles
(GAAP).
Guidelines, procedures,
and practices
that we
are required
to use in
recording
and reporting accounting information in our financial statements.
Goodwill.
The difference
between the purchase
price of acquired
companies plus the fair
value of any
noncontrolling and redeemable
interests and the related fair values of net assets acquired.
Gross margin.
Net sales less cost of sales.
Hedge accounting.
Accounting for qualifying
hedges that allows changes in
a hedging instrument’s
fair value to offset
corresponding
changes in
the hedged
item in
the same
reporting period.
Hedge accounting
is permitted
for certain
hedging instruments
and hedged
items
only
if
the
hedging
relationship
is
highly
effective,
and
only
prospectively
from
the
date
a
hedging
relationship
is
formally
documented.
Holistic Margin Management
(HMM).
Company-wide initiative to
use productivity savings, mix
management, and price realization
to offset input cost inflation, protect margins,
and generate funds to reinvest in sales-generating activities.
Interest
bearing
instruments.
Notes
payable,
long-term
debt,
including
current
portion,
cash
and
cash
equivalents,
and
certain
interest bearing investments classified within prepaid expenses and other
current assets and other assets.
Mark-to-market.
The act of determining a value for
financial instruments, commodity contracts, and
related assets or liabilities based
on the current market price for that item.
38
Net
mark-to-market
valuation of
certain
commodity
positions.
Realized
and
unrealized
gains
and
losses on
derivative
contracts
that will be allocated to segment operating profit when the exposure we are hedging
affects earnings.
Net price realization.
The impact of list and promoted price changes, net of trade and other price
promotion costs.
The estimated
selling price
in the
ordinary course
of business,
less reasonably
predictable costs
of completion,
disposal, and transportation.
Noncontrolling interests.
Interests of subsidiaries held by third parties.
The
amount
of
a
position
or
an
agreed
upon
amount
in
a
derivative
contract
on
which
the
value
of
financial
instruments are calculated.
OCI.
Other Comprehensive Income (Loss).
Organic net sales growth
. Net sales growth adjusted
for foreign currency translation,
acquisitions, divestitures and a
53
rd
when applicable.
Project-related costs.
Costs incurred related to our restructuring initiatives not included in restructuring
charges.
Reporting unit
. An operating segment or a business one level below an operating
segment.
SOFR.
Secured Overnight Financing Rate.
Strategic
Revenue
Management
(SRM).
A
company-wide
capability
focused
on
generating
sustainable
benefits
from
net
price
realization
and
mix
by
identifying
and
executing
against
specific
opportunities
to
apply
tools
including
pricing,
sizing,
mix
management, and promotion optimization across each of our businesses.
Supply chain
input costs.
Costs incurred
to produce
and deliver
product,
including costs
for
ingredients
and
conversion, inventory
management, logistics, and warehousing.
The impact
of the conversion
of our foreign
affiliates’ financial
statements to United
States dollars
for the
purpose of consolidating our financial statements.
Working capital
. Current assets and current liabilities, all as of the last day of our fiscal year.
39
CAUTIONARY STATEMENT
RELEVANT
TO FORWARD
-LOOKING INFORMATION
FOR THE PURPOSE OF “SAFE
HARBOR” PROVISIONS OF THE PRIVATE
SECURITIES LITIGATION
REFORM ACT OF 1995
This report
contains or
incorporates by
reference
forward-looking
statements within
the meaning
of the
Private Securities
Litigation
Reform Act
of 1995
that are
based on
our current
expectations and
assumptions. We
also may
make written
or oral
forward-looking
statements,
including
statements
contained
in
our
filings
with
the
Securities
and
Exchange
Commission
and
in
our
reports
to
stockholders.
The words or
phrases “will likely
result,” “are expected
to,” “will continue,”
“is anticipated,” “estimate,”
“plan,” “project,” or
similar
expressions identify
“forward-looking statements”
within the
meaning of
the Private
Securities Litigation
Reform Act
of 1995.
Such
statements are
subject to
certain risks
and uncertainties
that could
cause actual
results to
differ
materially from
historical results
and
those currently anticipated or projected. We
caution you not to place undue reliance on any such forward-looking statements.
In connection
with the “safe
harbor” provisions
of the Private
Securities Litigation
Reform Act of
1995, we are
identifying important
factors
that could
affect
our financial
performance
and could
cause our
actual results
in future
periods
to differ
materially
from any
current opinions or statements.
Our
future
results
could
be
affected
by
a
variety
of
factors,
such
as:
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.
You
should also
consider the risk
factors that we
identify in Item
1A of Part
I of our
Annual Report on
Form 10-K for
the fiscal year
ended May 26, 2024, which could also affect our future results.
We undertake
no obligation to publicly revise any forward-looking
statements to reflect events or circumstances
after the date of those
statements or to reflect the occurrence of anticipated or unanticipated events.
Item 3.
Quantitative and Qualitative Disclosures About Market Risk.
The
estimated
maximum
potential
value-at-risk
arising
from
a
one-day
loss
in
fair
value
for
our
interest
rate,
foreign
exchange,
commodity, and equity
market-risk-sensitive instruments outstanding as of November 24,
2024, was as follows:
In Millions
One-day Risk
of Loss
Change During
Six Month
Period Ended
Nov. 24, 2024
Analysis of Change
Interest rate instruments
$
47
$
(6)
Decrease in interest rates
Foreign currency instruments
37
7
Increase in portfolio basis
Commodity instruments
4
(1)
Immaterial
Equity instruments
2
-
Immaterial
For additional information, see Item 7A of Part II of our Annual Report on Form 10-K
for the fiscal year ended May 26, 2024.
40
Item 4.
Controls and Procedures.
We,
under the
supervision and
with the
participation of
our management,
including our
Chief Executive
Officer and
Chief Financial
Officer,
have
evaluated
the
effectiveness
of
the design
and
operation
of
our
disclosure
controls
and
procedures
(as
defined
in
Rule
13a-15(e)
under
the
Securities
Exchange
Act
of
1934).
Based
on
our
evaluation,
our
Chief
Executive
Officer
and
Chief
Financial
Officer
have
concluded
that,
as
of
November
24,
2024,
our
disclosure
controls
and
procedures
were
effective
to
ensure
that
information required to
be disclosed by us
in reports that we
file or submit under
the Securities Exchange Act
of 1934 is (1)
recorded,
processed, summarized,
and reported
within the
time periods
specified in
Securities and
Exchange Commission
rules and
forms, and
(2)
accumulated
and
communicated
to
our
management,
including
our
Chief
Executive
Officer
and
Chief
Financial
Officer,
in
a
manner that allows timely decisions regarding required disclosure.
There were no changes in our internal
control over financial reporting (as defined
in Rule 13a-15(f) under the Securities Exchange
Act
of
1934)
during
the
quarter
ended
November
24,
2024,
that
materially
affected,
or
are
reasonably
likely
to
materially
affect,
our
internal control over financial reporting.
PART
II.
OTHER INFORMATION
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds.
The
following
table
sets forth
information
with
respect
to
shares
of
our
common
stock
that we
purchased
during
the quarter
ended
November 24, 2024:
Period
of Shares
Purchased (a)
Average
Price Paid
Per Share
Purchased as Part of a Publicly
Announced Program (b)
Maximum Number of Shares
that may yet be Purchased
Under the Program (b)
August 26, 2024 -
September 29, 2024
1,711,787
$
74.19
1,711,787
49,414,101
September 30, 2024 -
October 27, 2024
2,022,335
71.76
2,022,335
47,391,766
November 24, 2024
446,461
69.02
446,461
46,945,305
Total
4,180,583
$
72.46
4,180,583
46,945,305
(a)
The total number
of shares purchased
includes shares of
common stock withheld
for the payment
of withholding taxes
upon the distribution
of
deferred option units.
(b)
On June
27, 2022,
our Board
of Directors approved
an authorization
for the
repurchase of
up to
100,000,000 shares of
our common stock
and
terminated the
prior authorization.
Purchases can
be made
in the
open market
or in
privately negotiated
transactions, including
the use
of call
options
and
other
derivative
instruments,
Rule
10b5-1
trading
plans,
and
accelerated
repurchase
programs.
The
Board
did
not
specify
an
expiration date for the authorization.
Item 5.
Other Information.
During
the
fiscal
quarter
ended
November
24,
2024,
no
director
or
officer
of
the
Company
trading arrangement” or “
trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.
41
PART
II. OTHER INFORMATION
Item 6.
Exhibits.
Financial Statements from the
Quarterly Report on Form
10-Q of the Company
for the quarter ended November
24,
2024,
formatted
in
Inline
Extensible
Business
Reporting
Language:
(i)
Consolidated
Statements
of
Earnings;
(ii)
Consolidated
Statements
of
Comprehensive
Income,
(iii)
Consolidated
Balance
Sheets;
(iv)
Consolidated
Statements of
Total
Equity; (v)
Consolidated Statements
of Cash
Flows; and
(vi) Notes
to Consolidated
Financial
Statements.
Cover Page, formatted in Inline Extensible Business Reporting Language
and contained in Exhibit 101.
42
SIGNATURES
Pursuant
to
the
requirements
of
the
Securities
Exchange
Act
of
1934,
the
registrant
has
duly
caused
this
report
to
be
signed
on
its
behalf by the undersigned thereunto duly authorized.
GENERAL MILLS, INC.
(Registrant)
Date: December 18, 2024
/s/ Mark A. Pallot
Mark A. Pallot
Vice President, Chief Accounting
Officer
(Principal Accounting Officer and Duly Authorized
Officer)
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