General Mills (GIS) Q4 2024 (Q&A) earnings summary

Executive summary

• Fiscal 2024 results met or exceeded updated guidance, with net sales down 1% to $19.9B and moderation from prior double-digit growth.

• Operating profit was flat at $3.4B; adjusted operating profit rose 4% in constant currency.

• Diluted EPS was $4.31, flat year-over-year; adjusted diluted EPS increased 6% in constant currency.

• Top priority for fiscal 2025 is to accelerate organic net sales growth and improve market share through increased brand investment, product innovation, and cost savings.

• Focus on improving volume growth and competitiveness across all segments, with significant reinvestment in brand equity and targeted couponing.

Financial highlights

• Fiscal 2024 net sales were $19,857M, down 1% year-over-year; adjusted operating profit grew 4% to $3,603M; adjusted diluted EPS rose 6% to $4.52 in constant currency.

• Q4 net sales were $4,714M, down 6% year-over-year; adjusted operating profit and adjusted diluted EPS both declined 10% in Q4.

• Adjusted gross margin for fiscal 2024 was 34.8%, up from 34.2% in fiscal 2023.

• Operating cash flow reached $3,303M, with free cash flow conversion at 96%.

• Q1 of fiscal 2025 is expected to be the toughest quarter due to high prior-year comps and increased investment, with gradual improvement anticipated throughout the year.

Outlook and guidance

• Fiscal 2025 outlook: organic net sales growth flat to +1%, adjusted operating profit -2% to flat, adjusted diluted EPS -1% to +1%, free cash flow conversion 95%+.

• Q1 fiscal 2025 results expected to be below full-year targets due to increased brand investment and tough comparisons.

• Guidance implies use of the full SRM toolkit, including price, mix, and trade optimization, with less reliance on price increases as prior-year pricing laps.

• HMM cost savings targeted at 4-5% of COGS to offset 3-4% input cost inflation.

• Q1 operating profit and sales are expected to be lower year-over-year, with improvement in subsequent quarters.