General Mills (GIS) Q1 2025 Prepared Remarks earnings summary

Executive summary

• Q1 FY2025 net sales declined 1% year-over-year to $4.85 billion, with organic net sales also down 1% and sequential improvements in volume and market share trends.

• Operating profit fell 11% to $832 million, primarily due to unfavorable mark-to-market impacts and higher SG&A; adjusted operating profit down 4% in constant currency.

• Adjusted diluted EPS was $1.07, down 2% in constant currency; diluted EPS was $1.03, down 10% year-over-year.

• Announced proposed $2.1 billion sale of North America Yogurt business, expected to close in calendar 2025 and be 3% dilutive to adjusted EPS in the first 12 months post-close.

• Reaffirmed full-year fiscal 2025 guidance, with plans to accelerate organic net sales growth and drive further improvement in competitiveness.

Financial highlights

• Q1 net sales were $4.85 billion, down 1% year-over-year; organic net sales also declined 1%.

• Adjusted operating profit was $865 million, down 4% in constant currency; operating profit margin was 17.2%, down 180 bps.

• Adjusted diluted EPS was $1.07, down 2% in constant currency.

• Adjusted gross margin was 35.4%, flat year-over-year; gross margin declined 130 bps to 34.8%.

• Operating cash flow increased to $624 million, up from $378 million in the prior year; $630 million returned to shareholders via dividends and share repurchases.

Outlook and guidance

• Fiscal 2025 organic net sales expected to be flat to up 1%.

• Adjusted operating profit expected between down 2% and flat; adjusted diluted EPS between down 1% and up 1% in constant currency.

• Free cash flow conversion expected at least 95% of adjusted after-tax earnings.

• Guidance does not yet include impact from proposed yogurt divestitures.

• Estimated 3% adjusted diluted EPS dilution in the first 12 months after North America Yogurt divestiture closes.