General Mills Is Getting More Optimistic About 2022

Raises outlook, banks on price increases to help offset higher costs

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Mar 25, 2022
  • Post-Covid consumer behavior expected to drive growth.
  • CEO Jeff Harmening promises ‘solid execution in a highly volatile environment.'
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General Mills (

GIS, Financial) has upgraded its fiscal 2022 guidance and said it is banking on a combination of price increases, product reformulations and changes in consumer behavior – including owning more pets – to spur growth ahead.

On Wednesday, the Minneapolis, Minnesota-based consumer packaged foods company reported results for its third quarter of fiscal 2022, which ended Feb. 27. Net sales for the third quarter were essentially flat compared to the prior-year quarter at $4.5 billion, including a 3-point net headwind from divestiture and acquisition activity. Organic net sales increased 4%, reflecting 7 points of positive organic net price realization and mix, partially offset by a 4-point headwind from lower organic pound volume.

In the midday trading on Friday, General Mills’ shares were trading at around $67.39, up 1.55%. It seems investors weren't too impressed by the results or the raised outlook, though they weren't necessarily disappointed.


General Mills caught investors’ attention by raising its guidance for fiscal 2022 to reflect year-to-date performance and an outlook for strong top- and bottom-line growth in the fourth quarter. The company’s updated full-year fiscal 2022 financial targets call for organic net sales to increase approximately 5%, including an expectation for organic net price realization and mix to increase sequentially from the third quarter to the fourth quarter. Full-year organic net sales were previously expected to increase 4% to 5%.

Executives expect changes in consumer behaviors driven by the Covid-19 pandemic will result in ongoing elevated consumer demand for food at home, relative to pre-pandemic levels. These changes include more time spent working from home and increased consumer appreciation for cooking and baking. In addition, an increase in the pet population and further humanization and premiumization of pet food during the pandemic are expected to create tailwinds for the pet food category.

General Mills has also been reformulating some of its recipes to sidestep supply chain shortages. "The biggest issue we're seeing is really around material disruptions - ingredients coming into our plants," Jon Nudi, President of North American Retail, told Star Tribune. "Some of our products we've reformulated over 20 times."

“Our solid execution in a highly volatile environment enabled us to close the third quarter with improved momentum,” said General Mills Chairman and CEO Jeff Harmening in a statement. “Demand for our brands remains robust, and our team has shown great agility to overcome disruptions throughout the supply chain and deliver for our customers and consumers. We expect to drive strong growth in the fourth quarter, fueled by accelerating net price realization. With confidence in our plans and positive momentum on our business, we’re raising our guidance for fiscal 2022.”

For the nine months ended Feb. 27, net sales increased 4% to $14.1 billion, including 1 point of favorable foreign currency exchange and a 1-point net headwind from divestiture and acquisition activity. Organic net sales increased 4%, reflecting 5 points of positive organic net price realization and mix, partially offset by a 1-point headwind from lower organic pound volume.

Constant-currency adjusted operating profit change is now expected to range between -2% and 0%, the company said, reflecting the increased guidance on organic net sales. For the full year, management continues to expect input cost inflation of 8% to 9% and significant costs related to supply chain disruptions. Adjusted operating profit was previously expected to change -4% to -1%.


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