# General Mills Inc: Form 10-Q for the period ended Nov 26, 2023

- Company: [General Mills Inc](/companies/gis.md) (CIK 40704)
- Form: 10-Q
- Filed: 2023-12-20
- Accepted by EDGAR: Dec 20, 2023, 16:09 ET
- Period: 2023-11-26
- Accession: 0001193125-23-299930
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/40704/000119312523299930/d660295d10q.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/40704/000119312523299930/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2023-11-26.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2023-08-28 to 2023-11-26 | $5.14bn | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Revenue | 6 months, 2023-05-29 to 2023-11-26 | $10.04bn | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Cost of revenue | 3 months, 2023-08-28 to 2023-11-26 | $3.37bn | us-gaap:CostOfGoodsAndServicesSold |
| Cost of revenue | 6 months, 2023-05-29 to 2023-11-26 | $6.51bn | us-gaap:CostOfGoodsAndServicesSold |
| Selling, general and administrative | 3 months, 2023-08-28 to 2023-11-26 | $830.5m | us-gaap:SellingGeneralAndAdministrativeExpense |
| Selling, general and administrative | 6 months, 2023-05-29 to 2023-11-26 | $1.67bn | us-gaap:SellingGeneralAndAdministrativeExpense |
| Operating income | 3 months, 2023-08-28 to 2023-11-26 | $811.8m | us-gaap:OperatingIncomeLoss |
| Operating income | 6 months, 2023-05-29 to 2023-11-26 | $1.74bn | us-gaap:OperatingIncomeLoss |
| Interest expense | 3 months, 2023-08-28 to 2023-11-26 | $117.8m | us-gaap:InterestExpense |
| Interest expense | 6 months, 2023-05-29 to 2023-11-26 | $234.8m | us-gaap:InterestExpense |
| Income tax | 3 months, 2023-08-28 to 2023-11-26 | $136.0m | us-gaap:IncomeTaxExpenseBenefit |
| Income tax | 6 months, 2023-05-29 to 2023-11-26 | $309.2m | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2023-08-28 to 2023-11-26 | $595.5m | us-gaap:NetIncomeLoss |
| Net income | 6 months, 2023-05-29 to 2023-11-26 | $1.27bn | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2023-08-28 to 2023-11-26 | $1.02 | us-gaap:EarningsPerShareDiluted |
| Diluted EPS | 6 months, 2023-05-29 to 2023-11-26 | $2.16 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2023-08-28 to 2023-11-26 | $1.03 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 6 months, 2023-05-29 to 2023-11-26 | $2.18 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2023-08-28 to 2023-11-26 | 583,400,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Diluted shares (weighted) | 6 months, 2023-05-29 to 2023-11-26 | 587,400,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 6 months, 2023-05-29 to 2023-11-26 | $1.50bn | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 6 months, 2023-05-29 to 2023-11-26 | $293.9m | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Dividends paid | 6 months, 2023-05-29 to 2023-11-26 | $691.0m | us-gaap:PaymentsOfDividends |
| Share repurchases | 6 months, 2023-05-29 to 2023-11-26 | $1.30bn | us-gaap:PaymentsForRepurchaseOfCommonStock |
| Cash and equivalents | at 2023-11-26 | $593.8m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2023-11-26 | $5.05bn | us-gaap:AssetsCurrent |
| Total assets | at 2023-11-26 | $31.23bn | us-gaap:Assets |
| Current liabilities | at 2023-11-26 | $7.90bn | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2023-11-26 | $21.60bn | us-gaap:Liabilities |
| Short-term borrowings | at 2023-11-26 | $799.2m | us-gaap:ShortTermBorrowings |
| Shareholders' equity | at 2023-11-26 | $9.38bn | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 14,520 characters.

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 28, 2023, 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.

We expect the largest factors impacting our performance in fiscal 2024 will be the economic health of consumers, the moderating rate

of input cost inflation, and the increasing stability of the supply chain environment. We anticipate input cost inflation of

approximately 5 percent in fiscal 2024 and expect to generate higher levels of Holistic Margin Management (HMM) cost savings

compared to fiscal 2023.

CONSOLIDATED RESULTS OF OPERATIONS

Second Quarter Results

In the second quarter of fiscal 2024, net sales and organic net sales decreased 2 percent compared to the same period last year.

Operating profit increased 2 percent to $812 million, primarily driven by favorable net price realization and mix and lower selling,

general and administrative (SG&A) expenses, including a decrease in certain compensation and benefits expenses, partially offset by

goodwill impairment and restructuring charges, a decrease in contributions from volume growth, and higher input costs. Operating

profit margin of 15.8 percent increased 50 basis points. Adjusted operating profit of $989 million increased 13 percent on a constant-

currency basis, primarily driven by favorable net price realization and mix and lower SG&A expenses, including a decrease in certain

compensation and benefits expenses, partially offset by a decrease in contributions from volume growth and higher input costs.

Adjusted operating profit margin increased 240 basis points to 19.3 percent. Diluted earnings per share of $1.02 increased 1 percent in

the second quarter of fiscal 2024. Adjusted diluted earnings per share of $1.25 increased 14 percent on a constant-currency basis

compared to the second quarter of fiscal 2023. 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 2024 follows:

### Quarter Ended Nov. 26, 2023

### In millions,

### except per share

### Quarter Ended

### Nov. 26, 2023 vs.

### Nov. 27, 2022

### Percent

### of Net

### Sales

### Constant-

### Currency

### Growth (a)

Net sales

5,139.4

(2)

Operating profit

811.8

2

15.8

Net earnings attributable to General Mills

595.5

(2)

Diluted earnings per share

1.02

1

Organic net sales growth rate (a)

(2)

Adjusted operating profit (a)

989.4

12

19.3

13

Adjusted diluted earnings per share (a)

1.25

14

14

(a) See the "Non-GAAP Measures" section below for our use of measures not defined by GAAP.

Consolidated

### net sales

were as follows:

### Quarter Ended

### Nov. 26, 2023

### Nov. 26, 2023 vs.

### Nov. 27, 2022

### Nov. 27, 2022

Net sales (in millions)

5,139.4

(2)%

5,220.7

Contributions from volume growth (a)

(4)

pts

Net price realization and mix

3

pts

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 in the second quarter of fiscal 2024 decreased 2 percent compared to the same period in fiscal 2023, driven by a decrease in

contributions from volume growth, partially offset by favorable net price realization and mix.

Components of organic net sales growth are shown in the following table:

### Quarter Ended Nov. 26, 2023 vs.

### Quarter Ended Nov. 27, 2022

Contributions from organic volume growth (a)

(4)

pts

Organic net price realization and mix

3

pts

Organic net sales growth

(2)

pts

Foreign currency exchange

Flat

Acquisition and divestitures

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 decreased 2 percent in the second quarter of fiscal 2024 compared to the same period in fiscal 2023, driven by a

decrease in contributions from organic volume growth, partially offset by favorable organic net price realization and mix.

### Cost of sales

decreased $142 million to $3,374 million in the second quarter of fiscal 2024 compared to the same period in fiscal

2023\. The decrease was primarily driven by a $153 million decline attributable to lower volume, partially offset by a $6 million

increase attributable to product rate and mix. We recorded a $25 million net increase in cost of sales related to the mark-to-market

valuation of certain commodity positions and grain inventories in second quarter of fiscal 2024, compared to a $25 million net

increase in the second quarter of fiscal 2023. We also recorded $8 million of restructuring charges in cost of sales 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). In the second

quarter of fiscal 2023, we recorded a $3 million charge related to a voluntary recall on certain international

#### Häagen-Dazs

ice cream

products.

### SG&A expenses

decreased $64 million to $830 million in the second quarter of fiscal 2024, compared to the same period in fiscal

2023, primarily driven by a decrease in certain compensation and benefits expenses and net favorable corporate investment activity.

SG&A expenses as a percent of net sales in the second quarter of fiscal 2024 decreased 90 basis points compared to the second quarter

of fiscal 2023.

### Restructuring, impairment, and other exit costs

totaled $124 million in the second quarter of fiscal 2024, compared to $11 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. In the second quarter of fiscal 2024, we approved a restructuring action to enhance the go-

to-market commercial strategy and related organizational structure of our Pet segment, and as a result, recorded $4 million of charges.

In addition, we also recorded $2 million of charges in the second quarter of fiscal 2024 related to actions previously announced

compared to $11 million in the same period last year (please refer to Note 3 to the Consolidated Financial Statements in Part I, Item 1

of this report).

### Benefit plan non-service income

totaled $20 million in the second quarter of fiscal 2024, compared to $22 million in the same period

last year, primarily reflecting an increase in interest costs, partially offset by lower amortization of losses and higher expected return

on plan assets.

### Interest, net

for the second quarter of fiscal 2024 totaled $118 million, up $26 million from the second quarter of fiscal 2023,

primarily driven by higher interest rates and higher average long-term debt levels.

The

### effective tax rate

for the second quarter of fiscal 2024 was 19.0 percent compared to 20.2 percent for the second quarter of fiscal

2023\. The 1.2 percentage point decrease was primarily due to favorable changes in earnings mix by jurisdiction and certain

nonrecurring discrete tax benefits in the second quarter of fiscal 2024. Our effective tax rate excluding certain items affecting

comparability was 20.8 percent in the second quarter of fiscal 2024, compared to 21.1 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 0.3 percentage point

decrease was primarily due to favorable earnings mix by jurisdiction in the second quarter of fiscal 2024.

### After-tax earnings from joint ventures

for the second quarter of fiscal 2024

decreased to $24 million compared to $25 million in the

same period in fiscal 2023, primarily driven by foreign currency exchange and higher input costs at Cereal Partners Worldwide (CPW)

and Häagen-Dazs Japan, Inc. (HDJ), partially offset by higher net sales driven by favorable net price realization and mix at CPW and

HDJ. 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:

### Quarter Ended Nov. 26, 2023 vs.

### Quarter Ended Nov. 27, 2022

### CPW

### HDJ

### Total

Contributions from volume growth (a)

(6)

pts

(1)

pt

Net price realization and mix

17

pts

6

pts

Net sales growth in constant currency

11

pts

6

pts

10

pts

Foreign currency exchange

(2)

pts

(3)

pts

(2)

pts

Net sales growth

10

pts

2

pts

8

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 19 million in the second quarter of fiscal 2024 from the same period a year ago

primarily due to share repurchases.

Six-Month Results

In the six-month period ended November 26, 2023, net sales and organic net sales increased 1 percent compared to the same period

last year. Operating profit decreased 8 percent to $1,742 million, primarily driven by a net gain on divestitures in fiscal 2023, higher

input costs, goodwill impairment and restructuring charges, and a decrease in contributions from volume growth, partially offset by

favorable net price realization and mix and a favorable change to the mark-to-market valuation of certain commodity positions and

grain inventories. Operating profit margin of 17.3 percent decreased 170 basis points. Adjusted operating profit of $1,888 million

increased 7 percent on a constant-currency basis, primarily driven by favorable net price realization and mix, partially offset by higher

input costs, a decrease in contributions from volume growth and an increase in certain SG&A expenses. Adjusted operating profit

margin increased 110 basis points to 18.8 percent . Diluted earnings per share of $2.16 decreased 8 percent in the six-month period

ended November 26, 2023, and adjusted diluted earnings per share of $2.34 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 26, 2023, follows:

### Six-Month Period Ended Nov. 26, 2023

### In millions,

### except per share

### Six-Month Period

### Ended Nov. 26,

### 2023 vs. Nov. 27,

### 2022

### Percent of Net

### Sales

### Constant-

### Currency

### Growth (a)

Net sales

10,044.1

1

Operating profit

1,741.8

(8)

17.3

Net earnings attributable to General Mills

1,269.0

(11)

Diluted earnings per share

2.16

(8)

Organic net sales growth rate (a)

1

Adjusted operating profit (a)

1,888.4

7

18.8

7

Adjusted diluted earnings per share (a)

2.34

6

6

(a) See the "Non-GAAP Measures" section below for our use of measures not defined by GAAP.

Consolidated

### net sales

were as follows:

### Six-Month Period Ended

### Nov. 26, 2023

### Nov. 26, 2023 vs.

### Nov. 27, 2022

### Nov. 27, 2022

Net sales (in millions)

10,044.1

1

9,938.3

Contributions from volume growth (a)

(3)

pts

Net price realization and mix

4

pts

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.

The 1 percent increase in net sales for the six-month period ended November 26, 2023, was driven by favorable net price realization

and mix, partially offset by a decrease in contributions from volume growth.

Components of organic net sales growth are shown in the following table:

### Six-Month Period Ended Nov. 26, 2023 vs.

### Six-Month Period Ended Nov. 27, 2022

Contributions from organic volume growth (a)

(3)

pts

Organic net price realization and mix

5

pts

Organic net sales growth

1

pt

Foreign currency exchange

Flat

Acquisition and divestitures

Flat

Net sales growth

1

pt

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 six-month period ended November 26, 2023, driven by favorable organic net price

realization and mix, partially offset by a decrease in contributions from organic volume growth.

### Cost of sales

decreased $278 million to $6,508 million in the six-month period ended November 26, 2023, compared to the same

period in fiscal 2023. The decrease was primarily driven by a $207 million decline due to lower volume, partially offset by a

$156 million increase attributable to product rate and mix. We recorded a $20 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 26, 2023,

compared to a $200 million net increase in the six-month period ended November 27, 2022. In the six-month period ended November

27, 2022, we recorded a $24 million charge related to a voluntary recall on certain international

#### Häagen-Dazs

ice cream products. In

addition, we recorded $17 million of restructuring charges and $1 million of restructuring initiative project-related costs in cost of

sales in the six-month period ended November 26, 2023, compared to $1 million of restructuring charges 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

decreased $16 million to $1,670 million in the six-month period ended November 26, 2023, compared to the same

period in fiscal 2023, primarily driven by net favorable corporate investment activity, partially offset by higher media and advertising

expenses. SG&A expenses as a percent of net sales decreased 40 basis points compared to the six-month period ended November 26,

2023, compared to the same period of fiscal 2023.

### Divestitures gain, net

totaled $431 million in the six-month period ended November 27, 2022, primarily related to the sale of our

Helper main meals and Suddenly Salad side dishes business (please refer to Note 2 to the Consolidated Financial Statements in Part I,

## Market risk

As filed, 715 characters.

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 26, 2023, was as follows:

### In Millions

### One-day Risk

### of Loss

### Change During

### Six-Month

### Period Ended

### Nov. 26, 2023

### Analysis of Change

Interest rate instruments

57

(9)

Lower interest rate volatility

Foreign currency instruments

28

(8)

Net price stability in portfolio

Commodity instruments

6

(1)

Immaterial

Equity instruments

2

(1)

Immaterial

For additional information, see Item 7A of Part II of our Annual Report on Form 10-K for the fiscal year ended May 28, 2023.

## Controls and procedures

As filed, 1,285 characters.

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 26, 2023, 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 26, 2023, that materially affected, or are reasonably likely to materially affect, our

internal control over financial reporting.

Filed Dec 20, 2023.
Source: SEC EDGAR, the filing index for accession 0001193125-23-299930. Last ingested by Listed: Nov 3, 2026, 23:01 ET. No prices; not investment advice.