Branded food company General Mills, Inc. (GIS) announced Wednesday that profit for the fourth quarter declined 33 percent from last year, hurt by lower gross margins, higher restructuring charges and a loss on the sale of the Laticínios Carolina yogurt business in Brazil.
However, adjusted earnings per share and quarterly net sales topped analysts’ estimates. The company also initiated adjusted earnings and organic net sales growth guidance for the full-year 2022.
For the fourth quarter, net earnings attributable to General Mills declined to $416.8 million or $0.68 per share from $625.7 million or $1.02 per share in the prior-year quarter.
Excluding items, adjusted earnings for the quarter were $0.91 per share, compared to $1.10 per share in the year-ago quarter.
On average, 18 analysts polled by Thomson Reuters expected the company to report earnings of $0.84 per share for the quarter. Analysts’ estimates typically exclude special items.
Net sales for the quarter declined 10 percent to $4.52 billion and organic net sales were down 6 percent, reflecting the comparison against the surge in at-home food demand at the outset of the pandemic in the prior year. Analysts expected revenues of $4.36 billion for the quarter.
Net sales for the North America Retail segment were down 17 percent to $2.64 billion, net sales for the Pet segment were down 20 percent to $444 million and net sales for the Convenience Stores & Foodservice segment increased 25 percent to $493 million from last year.
Net sales for the Europe & Australia segment increased 2 percent to $539 million and net sales for the Asia & Latin America segment increased 17 percent to $407 million from last year.
Gross margin was down 20 basis points to 35.0 percent of net sales, driven by higher input costs.
Looking ahead to fiscal 2022, the company projects constant-currency adjusted earnings per share to range between flat and down 2 percent from the base of $3.79 per share reported in fiscal 2021. Organic net sales are expected to decline 1 to 3 percent, reflecting the outlook for lower consumer demand.
The Street is currently looking for earnings of $3.70 per share on revenues of $17.66 billion for the full-year 2022.
Further, the company said it expects at-home food demand to decline year over year in fiscal 2022 across most of its core markets, though it will remain above pre-pandemic levels. However, away-from-home food demand is expected to continue to recover in fiscal 2022, though not fully to pre-pandemic levels.
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