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Graham Griffin
Graham Griffin
Articles (165) 

General Mills Beats Estimates With Strong Earnings

Sales up with elevated demand for food at home

December 17, 2020 | About:

Shares of General Mills Inc. (NYSE:GIS) saw a small price jump on Thursday alongside the most recent quarterly earnings report.

The global leader in packaged foods reported revenue of $4.71 billion, a 7% increase from the previous year at $4.42 billion. Earnings per share totaled $1.11, beating the previous year by 17%. Adjusted earnings per year settled at $1.06, which beat FactSet analyst estimations of 97 cents.


"We executed very well again in the second quarter, driving strong performance on the top and bottom lines," General Mills Chairman and CEO Jeff Harmening said. "In this dynamic environment, I'm proud of the way we're taking care of our people and serving our consumers with brands they love and trust. We strongly believe that the work we're doing today to strengthen our brands and capabilities and deepen our connection with consumers will translate to profitable growth and shareholder value creation for the long term."

The company saw growth across all major segments with the exception of the convenience stores and foodservice segment. Due to continued struggles with restaurants, schools, lodging and convenience stores, the segment suffered a 14% decline in net sales down to $440 million. The segment's operating profit was driven down 32% by lower net sales and fixed cost deleverage in the supply chain.

The company's pet segment saw the largest growth numbers with net sales settling at $460 million, up 18%. The company estimates a 25% growth in wet cat and dog food alongside a 40% growth in treat sales. North America also saw a 9% increase to $2.92 billion in net sales. The Europe & Australia and Asia & Latin America segments trailed behind with 8% and 5% growth respectively.

In the outlook statement, the company said they "expect that the COVID-19 pandemic will drive continued elevated consumer demand for food at home, relative to pre-pandemic levels." Due to this elevated demand, General Mills believes strong growth will be seen on both top and bottom lines moving into the next quarter.

On Dec. 17, the stock was trading at $58.92 with a market cap of $36.02 billion. The GF Value Line shows that the stock is trading at a fair value rating.


Top gurus invested in the stock include John Hussman (Trades, Portfolio), Mario Gabelli (Trades, Portfolio), Ken Fisher (Trades, Portfolio), Jeremy Grantham (Trades, Portfolio) and Ray Dalio (Trades, Portfolio).


Disclosure: Author owns no stocks mentioned.

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