General Mills Inc (NYSE: GIS) announced a 6.5 percent year-over-year increase in second-quarter FY22 sales to $5.02 billion, exceeding analyst expectations of $4.84 billion.
Sales in the North American retail segment climbed by 2% year over year. Sales in the Pet section jumped by 29%, while sales in Convenience Stores & Foodservice increased by 23%.
The adjusted EPS of $0.99 fell short of $1.05. The gross margin fell 400 basis points year over year to 32.5 percent. The operating margin declined 350 basis points to 15.9% while operating income fell 13% to $800 million for the quarter. As of November 28, 2021, General Mills has $1.02 billion in cash and equivalents. For the first six months of FY22, operating activities generated $1.50 billion in net cash.
“In the face of an unprecedented combination of input cost inflation and supply chain interruptions,” said Chairman and CEO Jeff Harmening, “we’re responding rapidly to keep our trusted brands on store shelves for consumers while driving net price realization to safeguard our bottom line.”
General Mills anticipates a 4% to 5% rise in organic net sales in FY22 (prior view toward the higher end of the range of down 1 percent – 3 percent ).
Constant-currency adjusted EPS will be down 2% – up 1%, according to the company (prior view toward the higher end of the range of flat to down 2 percent ). GIS shares are currently trading 3.47 percent lower in premarket trading at $65.44 as per Tuesday’s check.