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General Mills, Inc.
CEO : Mr. Jeffrey L. Harmening

Quarterly earnings growth(YoY,%)

Period	Revenue	Operating Income	EPS	Release Date
2025 Q2	2.0% YoY	32.8%	38.8%	2024-12-18

Jeff Harmening says,

Sales and Market Share Performance

• General Mills achieved a 4-point improvement in organic volume growth compared to fiscal 2024.
• North America Pet business returned to growth, with improved pound share and stable dollar share.
• 56% of priority businesses grew or held pound share, while 38% grew or held dollar share in Q2.
• U.S. retail priority businesses saw improvements, with 60% growing or holding pound share and 50% dollar share.
• The U.S. cereal business returned to dollar share growth, supported by effective advertising and merchandising.

Financial Performance and Guidance

• Organic net sales increased by 1%, adjusted operating profit rose by 7% in constant currency, and adjusted diluted EPS grew by 12% in constant currency.
• Q2 results benefited from timing-related items, adding 1.5 points to net sales and 6 points to operating profit and EPS, expected to reverse in the second half.
• Operating profit and EPS guidance for fiscal 2025 have been reduced by 2 points, reflecting increased investments for growth.
• The company expects to deliver at least 95% free cash flow conversion in fiscal 2025.

Product and Investment Strategies

• Increased investments in consumer value, leading to lower operating profit and EPS projections for fiscal 2025.
• Efforts to enhance product appeal include launching new Pillsbury dough varieties and increasing media support by 40% in Q3.
• Product innovation in North America Foodservice, such as renovations on the Baked Biscuit line, has fueled market share growth.
• Introduction of the Tiki Cat brand through acquisition aims to expand the U.S. pet food category presence.

Cost Savings and Cash Flow Management

• General Mills plans to achieve a 5% savings in cost of goods sold through HMM, surpassing long-term trends.
• Continued strong cash generation with a projected free cash flow conversion of at least 95% for fiscal 2025.
• Commitment to a disciplined approach in capital allocation, dividend growth, and share repurchases.

Future M&A and Strategic Focus

• Focus remains on bolt-on acquisitions to enhance the growth profile of the business.
• Portfolio reshaping through divestitures and acquisitions, with an anticipated turnover of approximately 30% of the net sales base since fiscal 2018.
• Near-term focus on seamless transitions for recent transactions, including the Whitebridge Pet acquisition and yogurt divestitures.

Kofi Bruce says,

Quarterly Financial Performance

• Reported net sales for Q2 were $5.2 billion, reflecting a 2% increase overall and a 1% rise in organic net sales.
• Adjusted operating profit reached $1.1 billion, up 7% in constant currency due to cost savings and higher volume.
• Adjusted diluted earnings per share increased by 12% in constant currency, totaling $1.40 for the quarter.
• Favorable timing items provided a 1.5 point benefit to net sales and a 6 point benefit to operating profit and EPS, expected to reverse in the second half.

Segment Performance

• North America Retail saw a 1% increase in organic net sales, with notable gains in U.S. Morning Foods and U.S. Snacks.
• North America Pet segment reported a 5% rise in organic net sales, with operating profit up 36% in constant currency.
• North America Foodservice organic net sales rose by 8%, driven by strong growth in breads, cereal, and frozen meals.
• International segment experienced a 3% decline in organic net sales due to challenges in China and Brazil.

Joint Ventures and Margin Performance

• Cereal Partners Worldwide net sales increased by 2% in constant currency, with strong performance in Latin America.
• Häagen-Dazs Japan saw a 1% increase in net sales, with growth in handheld formats.
• Adjusted gross margin increased by 130 basis points to 36.3% of net sales.
• Adjusted operating profit margin increased by 100 basis points to 20.3%, with timing benefits expected to reverse in Q3.

Updated Financial Outlook for Fiscal 2025

• Organic net sales are expected to range between flat and up 1%, targeting the lower end of the range.
• Adjusted operating profit projected to decrease by 4% to 2% in constant currency.
• Adjusted diluted Earnings Per Share expected to decline by 3% to 1% in constant currency.
• HMM cost savings anticipated to be 5% of COGS, with input cost inflation at 4% of COGS for fiscal 2025.

Balance Sheet and Cash Flow

• First-half operating cash flow increased 19% to $1.8 billion.
• Capital investments in the first half totaled $301 million.
• Returned $1.2 billion in cash to shareholders through dividends and net share repurchases.
• Free cash flow conversion expected to be at least 95% of adjusted after-tax earnings.

Q & A sessions,

Financial Performance Overview

• General Mills reported Q2 net sales of $5.2 billion, marking a 2% increase; organic net sales rose by 1%.
• Adjusted operating profit increased by 7% in constant currency, amounting to $1.1 billion.
• Adjusted diluted earnings per share (EPS) were up 12% in constant currency, reaching $1.40.
• First half results saw adjusted operating profit up 2% and adjusted diluted EPS up 6% in constant currency.

Strategic Investments and Challenges

• There was a notable focus on improving volume and market share, although this led to a lower outlook on operating profit and EPS for fiscal 2025.
• Investments are aimed at providing greater value to consumers, resulting in higher promotional costs.
• Challenges remain in the Refrigerated Dough segment and in China due to consumer trends.

Performance Across Segments

• North America Retail: Q2 organic net sales increased by 1%, driven by improvements in 7 out of 10 U.S. retail categories.
• North America Pet: Organic net sales grew by 5%, with strong performance in dry and wet food, despite flat dollar share.
• International: Organic net sales decreased by 3%, affected by declines in China and Brazil.

Future Outlook and Guidance

• Organic net sales are expected to range between flat and up 1%, likely at the lower end.
• Adjusted operating profit is projected to decline by 2% to 4% in constant currency.
• Adjusted diluted EPS is expected to decrease by 1% to 3% in constant currency.
• Free cash flow conversion is anticipated to be at least 95% of adjusted after-tax earnings.

Key Factors Affecting Earnings

Item	Impact
Timing Items	1.5 point benefit to Q2 net sales; 6 point benefit to operating profit and EPS, expected to reverse in H2.
HMM Cost Savings	5% savings in COGS for fiscal 2025.
Input Cost Inflation	Expected to be 4% of COGS in fiscal 2025.
M&A Activities	Includes North American Yogurt divestitures and acquisition of Whitebridge Pet Brands.

These strategic moves are anticipated to strengthen General Mills’ positioning for sustainable growth in fiscal 2026 and beyond.