General Mills’ profit rose 19% this fall, sunnier results than Wall Street analysts expected as it continued to benefit from the stay-at-home lifestyle that defined 2020.
But with a vaccine for coronavirus just now starting to rollout across the U.S., the company scrapped its guidance to investors for the next six months, noting the unpredictability of the “magnitude and duration of the elevated at-home food demand” created by the COVID-19 pandemic.
“We’re focused on what we can control, meeting our consumers’ needs and winning across our markets,” said Jeff Harmening, chief executive of General Mills.
The company earned $688 million for the three months ended Nov. 29, the second quarter of its 2021 fiscal year. That translated to adjusted earnings per share of $1.06, which beat the consensus forecast of analysts of 97 cents per share.
Net sales of $4.7 billion also surpassed the revenue expectation of $4.65 billion.
The company’s stock rose slightly on the news in premarket trading.
Sales for baking goods, like Gold Medal flour, skyrocketed in the spring before settling to moderately elevated levels. Cold cereal, the company’s hallmark product, has also sold at higher rates as schoolchildren eat breakfast at home and adults, burnt out on cooking, use it as a quick meal substitute.
Americans are still baking at higher levels as these sales trends continued for the most recent quarter. General Mills’ meals and baking products, usually a steady but sleepy category for the company, tallied the largest year-over-year gains within its U.S. food market.
The pandemic has also led to an increase in pet adoptions and pet owners, buoying General Mills’ Blue Buffalo brand, which posted double-digit gains.
It’s been nearly a year since the Golden Valley-based food maker first started seeing the effects of the novel coronavirus, which first disrupted its business in China before becoming a global pandemic.
The unexpected boost to General Mills’ revenue has allowed the company to paid down debt quicker than anticipated.
General Mills is a part of the consumer staples segment that tends to be countercyclical to the broader economy, thriving during recessions and crises when consumers focus on basic needs.
Generally, the company expects its adjusted operating profit margin for its full fiscal year, which ends in May, to be similar or better than last year compared to earlier guidance that it would match last year’s results.
But executives Thursday morning focused their message on investors who are wondering what General Mills will do with the momentum gained during this unusual year.
Kristen Leigh Painter • 612-673-4767