General Mills (GIS) Q4 2024 Prepared Remarks earnings summary

Executive summary

• Fiscal 2024 results met or exceeded updated guidance, with net sales down 1% to $19.9B and adjusted operating profit up 4% and adjusted diluted EPS up 6% in constant currency, driven by strong cost savings and cash generation despite a challenging environment.

• Focus areas included competitiveness, supply chain efficiency, and disciplined capital allocation, with strong performance in efficiency and capital discipline, and a top priority for fiscal 2025 to accelerate organic net sales growth and invest in brands.

• ESG progress included reductions in greenhouse gas emissions, advances in recyclable packaging, and increased investment in regenerative agriculture and climate initiatives.

• Fiscal 2025 will emphasize brand investment, cost savings, and supply chain efficiency to drive market share and offset input cost inflation.

• Board declared a 2% dividend increase, continuing 125 years of uninterrupted dividends.

Financial highlights

• Fiscal 2024 net sales were $19.9B, down 1% year-over-year; adjusted operating profit was $3.6B, up 4% in constant currency; adjusted diluted EPS was $4.52, up 6% in constant currency.

• Adjusted gross margin expanded by 60 bps to 34.8%; adjusted operating profit margin increased 90 bps to 18.1%.

• Operating cash flow was $3.3B, with free cash flow conversion at 96% of adjusted after-tax earnings.

• Share repurchases totaled $2.0B; dividends paid nearly $1.4B, up 6%.

• Net earnings attributable to General Mills fell 4% to $2.5B.

Outlook and guidance

• Fiscal 2025 organic net sales expected to be flat to up 1%; adjusted operating profit projected between down 2% and flat, including a 2-point headwind from incentive compensation resets.

• Adjusted diluted EPS expected to range from down 1% to up 1% in constant currency.

• Free cash flow conversion targeted at least 95%.

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

• Category dollar growth in fiscal 2025 anticipated below long-term 2%-3% projection.