4
5
6
7
9
22
41
42
42
42
43
44
4
PART
I.
FINANCIAL INFORMATION
Item 1.
Financial Statements.
Consolidated Statements of Earnings
GENERAL MILLS, INC. AND SUBSIDIARIES
(Unaudited) (In Millions, Except per Share Data)
Quarter Ended
Nine-Month Period Ended
Feb. 23, 2025
Feb. 25, 2024
Feb. 23, 2025
Feb. 25, 2024
Net sales
$
$
$
$
Cost of sales
Selling, general, and administrative expenses
Divestiture gain
()
()
Restructuring, impairment, and other exit (recoveries) costs
()
Operating profit
Benefit plan non-service income
()
()
()
()
Interest, net
Earnings before income taxes and after-tax earnings
from
joint ventures
Income taxes
After-tax earnings from joint ventures
Net earnings, including earnings attributable to
noncontrolling interests
Net earnings attributable to noncontrolling interests
Net earnings attributable to General Mills
$
$
$
$
Earnings per share – basic
$
$
$
$
Earnings per share – diluted
$
$
$
$
See accompanying notes to consolidated financial statements.
5
Consolidated Statements of Comprehensive Income
GENERAL MILLS, INC. AND SUBSIDIARIES
(Unaudited) (In Millions)
Quarter Ended
Nine-Month Period Ended
Feb. 23, 2025
Feb. 25, 2024
Feb. 23, 2025
Feb. 25, 2024
Net earnings, including earnings attributable to
noncontrolling interests
$
$
$
$
Other comprehensive income (loss), net of tax:
Foreign currency translation
()
()
Other fair value changes:
Hedge derivatives
()
()
Reclassification to earnings:
Foreign currency translation
Hedge derivatives
()
()
()
()
Amortization of losses and prior service costs
Other comprehensive income (loss), net of tax
()
Total comprehensive
income
Comprehensive income attributable to noncontrolling
interests
Comprehensive income attributable to General Mills
$
$
$
$
See accompanying notes to consolidated financial statements.
6
Consolidated Balance Sheets
GENERAL MILLS, INC. AND SUBSIDIARIES
(In Millions, Except Par Value)
Feb. 23, 2025
May 26, 2024
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents
$
$
Receivables
Inventories
Prepaid expenses and other current assets
Assets held for sale
Total current
assets
Land, buildings, and equipment
Goodwill
Other intangible assets
Other assets
Total assets
$
$
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable
$
$
Current portion of long-term debt
Notes payable
Other current liabilities
Liabilities held for sale
Total current
liabilities
Long-term debt
Deferred income taxes
Other liabilities
Total liabilities
Stockholders’ equity:
Common stock,
shares issued, $
par value
Additional paid-in capital
Retained earnings
Common stock in treasury,
at cost, shares of
and
()
()
Accumulated other comprehensive loss
()
()
Total stockholders’
equity
Noncontrolling interests
Total equity
Total liabilities and equity
$
$
See accompanying notes to consolidated financial statements.
7
Consolidated Statements of Total
Equity
GENERAL MILLS, INC. AND SUBSIDIARIES
(Unaudited) (In Millions, Except per Share Data)
Quarter Ended
Feb. 23, 2025
Feb. 25, 2024
Shares
Amount
Shares
Amount
Total equity,
beginning balance
$
$
Common stock,
billion shares authorized, $
par value
754.6
75.5
754.6
75.5
Additional paid-in capital:
Beginning balance
1,182.0
1,201.8
Stock compensation plans
(9.6)
(11.1)
Unearned compensation related to stock unit awards
2.3
1.8
Earned compensation
20.2
17.8
Ending balance
1,194.9
1,210.3
Retained earnings:
Beginning balance
21,340.3
20,080.9
Net earnings attributable to General Mills
625.6
670.1
Cash dividends declared ($
and $
per share)
(329.9)
(334.3)
Ending balance
21,636.0
20,416.7
Common stock in treasury:
Beginning balance
(202.4)
(10,873.3)
(185.7)
(9,677.4)
Shares purchased, including excise tax of $
and
$
million
(4.8)
(304.4)
(4.7)
(303.1)
Stock compensation plans
0.1
8.9
0.3
12.1
Ending balance
(207.1)
(11,168.8)
(190.1)
(9,968.4)
Accumulated other comprehensive loss:
Beginning balance
(2,523.8)
(2,302.0)
Comprehensive income
49.4
4.7
Ending balance
(2,474.4)
(2,297.3)
Noncontrolling interests:
Beginning balance
248.5
253.1
Comprehensive income
5.4
6.0
Distributions to noncontrolling interest holders
(4.5)
(4.6)
Ending balance
249.4
254.5
Total equity,
ending balance
$
$
See accompanying notes to consolidated financial statements.
8
Consolidated Statements of Total
Equity
GENERAL MILLS, INC. AND SUBSIDIARIES
(Unaudited) (In Millions, Except per Share Data)
Nine-Month Period Ended
Feb. 23, 2025
Feb. 25, 2024
Shares
Amount
Shares
Amount
Total equity,
beginning balance
$
$
Common stock,
billion shares authorized, $
par value
754.6
75.5
754.6
75.5
Additional paid-in capital:
Beginning balance
1,227.0
1,222.4
Stock compensation plans
(18.9)
(10.3)
Unearned compensation related to stock unit awards
(79.4)
(78.1)
Earned compensation
66.2
76.3
Ending balance
1,194.9
1,210.3
Retained earnings:
Beginning balance
20,971.8
19,838.6
Net earnings attributable to General Mills
2,001.2
1,939.1
Cash dividends declared ($
and $
per share)
(1,337.0)
(1,361.0)
Ending balance
21,636.0
20,416.7
Common stock in treasury:
Beginning balance
(195.5)
(10,357.9)
(168.0)
(8,410.0)
Shares purchased, including excise tax of $
and
$
million
(13.5)
(909.6)
(23.5)
(1,616.6)
Stock compensation plans
1.9
98.7
1.4
58.2
Ending balance
(207.1)
(11,168.8)
(190.1)
(9,968.4)
Accumulated other comprehensive loss:
Beginning balance
(2,519.7)
(2,276.9)
Comprehensive income (loss)
45.3
(20.4)
Ending balance
(2,474.4)
(2,297.3)
Noncontrolling interests:
Beginning balance
251.8
250.4
Comprehensive income
14.9
20.0
Distributions to noncontrolling interest holders
(17.3)
(16.6)
Change in ownership interest
0.7
Ending balance
249.4
254.5
Total equity,
ending balance
$
$
See accompanying notes to consolidated financial statements.
9
Consolidated Statements of Cash Flows
GENERAL MILLS, INC. AND SUBSIDIARIES
(Unaudited) (In Millions)
Nine-Month Period Ended
Feb. 23, 2025
Feb. 25, 2024
Cash Flows - Operating Activities
Net earnings, including earnings attributable to noncontrolling interests
$
$
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization
After-tax earnings from joint ventures
()
()
Distributions of earnings from joint ventures
Stock-based compensation
Deferred income taxes
()
()
Pension and other postretirement benefit plan contributions
()
()
Pension and other postretirement benefit plan costs
()
()
Divestiture gain
()
Restructuring, impairment, and other exit (recoveries) costs
()
Changes in current assets and liabilities, excluding the effects of
acquisitions and divestitures
()
Other, net
()
Net cash provided by operating activities
Cash Flows - Investing Activities
Purchases of land, buildings, and equipment
()
()
Acquisition, net of cash acquired
()
()
Proceeds from divestiture
Investments in affiliates, net
()
Proceeds from disposal of land, buildings, and equipment
Other, net
()
Net cash used by investing activities
()
()
Cash Flows - Financing Activities
Change in notes payable
Issuance of long-term debt
Payment of long-term debt
()
()
Proceeds from common stock issued on exercised options
Purchases of common stock for treasury
()
()
Dividends paid
()
()
Distributions to noncontrolling interest holders
()
()
Other, net
()
()
Net cash used by financing activities
()
()
Effect of exchange rate changes on cash and cash equivalents
()
()
Increase in cash and cash equivalents
Cash and cash equivalents - beginning of year
Cash and cash equivalents - end of period
$
$
Cash Flows from changes in current assets and liabilities, excluding
the effects of
acquisitions and divestitures:
Receivables
$
()
$
()
Inventories
Prepaid expenses and other current assets
Accounts payable
()
()
Other current liabilities
Changes in current assets and liabilities
$
$
()
See accompanying notes to consolidated financial statements.
10
GENERAL MILLS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(1) Background
The accompanying
Consolidated Financial
Statements of
General Mills,
Inc. (we,
us, our,
General Mills,
or the Company)
have been
prepared in
accordance with
accounting principles
generally accepted
in the
United States
(GAAP) for
interim financial
information
and with
the rules
and regulations
for reporting
on Form
10-Q. Accordingly,
they do
not include
certain information
and disclosures
required
for
comprehensive
financial
statements.
In
the
opinion
of
management,
all
adjustments
considered
necessary
for
a
fair
presentation have
been included
and are
of a
normal recurring
nature, including
the elimination
of all
intercompany transactions
and
any
noncontrolling
interests’
share
of
those
transactions.
Operating
results
for
the
fiscal
quarter
ended
February
23,
2025,
are
not
necessarily indicative of the results that may be expected for the fiscal year ending
May 25, 2025.
These
statements
should
be
read
in
conjunction
with
the
Consolidated
Financial
Statements
and
footnotes
included
in
our
Annual
Report on Form
10-K for the fiscal
year ended May
26, 2024. The
accounting policies used
in preparing these
Consolidated Financial
Statements are the same as those described in Note 2 to the Consolidated Financial
Statements in that Form 10-K.
Certain terms used throughout this report are defined in the “Glossary” section
below.
(2) Acquisitions and Divestitures
During
the
third
quarter
of
fiscal
2025,
we
acquired
NX
Pet
Holding,
Inc.,
representing
Whitebridge
Pet
Brands’
North
American
premium cat feeding
and pet treating
business, for a
purchase price of
$
1.4
billion (Whitebridge Pet
Brands acquisition). We
financed
the
transaction
with
cash
on
hand.
We
consolidated
Whitebridge
Pet
Brands
into
our
Consolidated
Balance
Sheets
and
recorded
goodwill
of
$
1,087.4
million,
an
indefinite-lived
intangible
asset
for
the
Tiki
Pets
brand
totaling
$
289.0
million,
and
a
finite-lived
customer relationship
asset of $
31.0
million. The goodwill
is included in
the North America
Pet segment and
is not deductible
for tax
purposes. The pro forma
effects of this acquisition were
not material. We
have conducted a preliminary assessment
of the fair value of
the acquired
assets and
liabilities of
the business
and we
are continuing
our review
of these
items during
the measurement
period. If
new
information
is
obtained
about
facts
and
circumstances
that
existed
at
the
acquisition
date,
the
acquisition
accounting
will
be
revised
to
reflect
the
resulting
adjustments
to
current
estimates
of
those
items.
The
consolidated
results
are
reported
in
our
North
America Pet operating segment on a one-month lag.
During
the
second
quarter
of
fiscal
2025,
we
entered
into
definitive
agreements
to
sell
our
North
American
yogurt
businesses
to
affiliates of Groupe Lactalis S.A. (Lactalis) and
Sodiaal International (Sodiaal) for approximately $
2.1
billion. During the third quarter
of
fiscal
2025,
we
completed
the
sale
of
our
Canada
yogurt
business
to
Sodiaal
and
recorded
a
pre-tax
gain
of
$
95.9
million.
We
expect
to
close
the
sale of
our
United
States yog
urt
business
to
Lactalis
in
calendar
year
2025,
subject
to
regulatory
approvals
and
other customary
closing conditions.
We
have classified
all assets
and liabilities
associated
with our
United States
yogurt business
as
held for sale in our Consolidated Balance Sheets as of February 23, 2025.
The components of assets held for sale and liabilities held for sale are as follows:
In Millions
Feb. 23, 2025
Inventories
$
52.4
Prepaid expenses and other current assets
15.1
Land, buildings, and equipment
224.3
Goodwill
252.6
Other intangible assets
160.7
Other assets
25.1
Assets held for sale
$
730.2
Other current liabilities
$
8.8
Other liabilities
11.7
Liabilities held for sale
$
20.5
During the fourth
quarter of fiscal 2024,
we acquired a pet
food business in Europe
for a purchase price
of $
434.1
million, net of
cash
acquired.
During
the
first
quarter
of
fiscal
2025,
we
paid
$
7.7
million
related
to
a
purchase
price
holdback
after
certain
closing
conditions
were
met.
We
financed
the
transaction
with
cash
on
hand.
We
consolidated
the
business
into
our
Consolidated
Balance
Sheets
and
recorded
goodwill
of
$
317.5
million,
an
indefinite-lived
brand
intangible
asset
of
$
118.4
million
and
a
finite-lived
customer
relationship
asset
of
$
14.2
million.
The
goodwill
is
included
in
the
International
segment
and
is
not
deductible
for
tax
11
purposes. The pro forma effects
of this acquisition were not
material. We
have conducted a preliminary assessment
of the fair value of
the acquired
assets and
liabilities of
the business
and we
are continuing
our review
of these
items during
the measurement
period. If
new
information
is
obtained
about
facts
and
circumstances
that
existed
at
the
acquisition
date,
the
acquisition
accounting
will
be
revised
to
reflect
the
resulting
adjustments
to
current
estimates
of
those
items.
The
consolidated
results
are
reported
in
our
International operating segment on a one-month lag beginning in
fiscal 2025.
(3) Restructuring, Impairment, and Other Exit Costs
Restructuring and impairment charges were
as follows:
Quarter Ended
Nine-Month Period Ended
In Millions
Feb. 23, 2025
Feb. 25, 2024
Feb. 23, 2025
Feb. 25, 2024
(Recoveries) charges associated with restructuring actions
previously announced
$
(0.6)
$
5.9
$
3.6
$
30.5
Goodwill impairment
Total
$
()
$
$
$
In the
nine-month period
ended February
23, 2025,
we did
not undertake
any new
restructuring actions.
We
recorded a
$
0.6
million
net
recovery
of restructuring
charges
in
the third
quarter of
fiscal
2025
and
$
3.6
million
of restructuring
charges
in
the nine-month
period
ended
February
23,
2025,
related
to
restructuring
actions
previously
announced.
We
recorded
$
5.9
million
of
restructuring
charges
in
the
third
quarter
of
fiscal
2024
and
$
30.5
million
of
restructuring
charges
in
the
nine-month
period
ended
February
25,
2024, related to restructuring actions previously announced.
We expect these
actions to be completed by the end of fiscal 2026.
We
paid
net
$
million
of
cash
in
the
nine-month
period
ended
February
23,
2025,
related
to
restructuring
actions.
We
paid
net
$
million of cash in the same period of fiscal 2024.
In the second
quarter of fiscal
2024, we recorded
a $
million non-cash goodwill
impairment charge
related to our Latin
America
reporting unit. See Note 4 for additional information.
Restructuring and
impairment (recoveries)
charges and
project-related costs
are recorded
in our
Consolidated Statements
of Earnings
as follows:
Quarter Ended
Nine-Month Period Ended
In Millions
Feb. 23, 2025
Feb. 25, 2024
Feb. 23, 2025
Feb. 25, 2024
Restructuring, impairment, and other exit (recoveries) costs
$
(0.8)
$
5.8
$
2.6
$
130.6
Cost of sales
0.2
0.1
1.0
17.0
Total restructuring
and impairment (recoveries) charges
$
()
$
$
$
Project-related costs classified in cost of sales
$
$
$
$
(4) Goodwill and Other Intangible Assets
The components of goodwill and other intangible assets are as follows:
In Millions
Feb. 23, 2025
May 26, 2024
Goodwill
$
$
Other intangible assets:
Intangible assets not subject to amortization:
Brands and other indefinite-lived intangibles
Intangible assets subject to amortization:
Customer relationships and other finite-lived intangibles
Less accumulated amortization
()
()
Intangible assets subject to amortization, net
Other intangible assets
Total
$
$
Based on the
carrying value of
finite-lived intangible assets
as of February
23, 2025, annual amortization
expense for each of
the next
five fiscal years is estimated to be approximately $
million.
12
The changes in the carrying amount of goodwill during the nine-month period
ended February 23, 2025, were as follows:
In Millions
North
America
Retail
North
America
Pet
North
America
Foodservice
International
(a)
Corporate
and Joint
Ventures
Total
Balance as of May 26, 2024
$
$
$
$
$
$
Acquisition
Divestiture
()
()
Reclassified to assets held
for sale
()
()
()
Other activity, primarily
foreign currency translation
()
()
()
()
Balance as of Feb. 23, 2025
$
$
$
$
$
$
(a)
The carrying amounts of goodwill within the International segment as of
May 26, 2024, and February 23, 2025, were net of
accumulated impairment losses of $
million. For additional information, see Note 6 to the Consolidated Financial
Statements included in our Annual Report on Form 10-K for the fiscal year
ended May 26, 2024.
The changes in the carrying amount of other intangible assets during the nine-month
period ended February 23, 2025, were as follows:
In Millions
Total
Balance as of May 26, 2024
$
Acquisition
Divestiture
()
Reclassified to assets held for sale
()
Other activity, primarily
foreign currency translation and amortization
()
Balance as of Feb. 23, 2025
$
Our
annual
goodwill
and
indefinite-lived
intangible
assets
impairment
test
was
performed
on
the
first
day
of
the
second
quarter
of
fiscal
2025,
and
we
determined
there
was
impairment
of
our
intangible
assets
as
their
related
fair
values
were
substantially
in
excess of the
carrying values,
except for
the
Uncle Toby’s
brand intangible
asset. In addition,
while having
significant coverage
as of
our
fiscal
2025
assessment
date,
the
Progresso
,
Nudges
,
True
Chews
,
and
Kitano
brand
intangible
assets
had
risk
of
decreasing
coverage. We will continue
to monitor these businesses for potential impairment.
(5) Inventories
The components of inventories were as follows:
In Millions
Feb. 23, 2025
May 26, 2024
Finished goods
$
$
Raw materials and packaging
Grain
Excess of FIFO over LIFO cost
()
()
Total
$
$
In addition, we had $
million of inventories classified as held for sale as of February 23, 2025.
(6) Risk Management Activities
Many commodities we
use in the
production and distribution
of our products
are exposed to
market price risks.
We
utilize derivatives
to manage price risk for our principal
ingredients and energy costs, including
grains (oats, wheat, and corn), oils
(principally soybean),
dairy products, natural
gas, and diesel fuel.
Our primary objective
when entering into
these derivative contracts
is to achieve
certainty
with
regard
to
the
future
price
of
commodities
purchased
for
use
in
our
supply
chain.
We
manage
our
exposures
through
a
combination of purchase orders, long-term
contracts with suppliers, exchange-traded
futures and options, and over-the-counter
options
and swaps.
We
offset
our exposures
based on
current and
projected market
conditions and
generally seek
to acquire
the inputs
at as
close as possible to or below our planned cost.
13
We
use derivatives
to manage
our exposure
to changes
in commodity
prices. We
do not
perform the
assessments required
to achieve
hedge
accounting
for
commodity
derivative
positions.
Accordingly,
the
changes
in
the
values
of
these
derivatives
are
recorded
currently in cost of sales in our Consolidated Statements of Earnings.
Although we do
not meet the
criteria for
cash flow hedge
accounting, we believe
that these instruments
are effective
in achieving our
objective of providing certainty
in the future price of commodities purchased
for use in our supply chain.
Accordingly, for
purposes of
measuring
segment
operating
performance,
these
gains
and
losses
are
reported
in
unallocated
corporate
items
outside
of
segment
operating results
until such time
that the exposure
we are managing
affects earnings.
At that time,
we reclassify
the gain or
loss from
unallocated
corporate
items
to
segment
operating
profit,
allowing
our
operating
segments
to
realize
the
economic
effects
of
the
derivative without experiencing any resulting mark-to-market volatility,
which remains in unallocated corporate items.
Unallocated corporate items for the quarters and nine-month periods ended
February 23, 2025, and February 25, 2024, included:
Quarter Ended
Nine-Month Period Ended
In Millions
Feb. 23, 2025
Feb. 25, 2024
Feb. 23, 2025
Feb. 25, 2024
Net gain (loss) on mark-to-market valuation of certain
commodity positions
$
$
()
$
()
$
()
Net loss on commodity positions reclassified from
unallocated corporate items to segment operating profit
Net mark-to-market revaluation of certain grain inventories
()
()
()
()
Net mark-to-market valuation of certain commodity
positions recognized in unallocated corporate items
$
$
()
$
$
()
As
of
February
23,
2025,
the
net
notional
value
of
commodity
derivatives
was
$
266.2
million,
of
which
$
172.2
million
related
to
agricultural inputs and
$
94.0
million related to
energy inputs. These
contracts relate to
inputs that generally
will be utilized
within the
next
12
months.
We
also have net
investments in
foreign subsidiaries
that are denominated
in euros. As
of February
23, 2025, we
hedged a portion
of
these investments with €
3,990.4
million of euro-denominated bonds.
During the
second quarter of
fiscal 2025, in
advance of planned
debt financing,
we entered into
$
350.0
million of treasury
locks. The
treasury locks were terminated during the second quarter
of fiscal 2025, in conjunction with the Company’s
issuance of $
750.0
million
of
fixed-rate
notes
due
January 30, 2035
.
Upon
termination,
a
gain
of $
0.1
million
was recognized
in AOCI
and
will be
amortized
through interest expense over the respective term of the debt.
During the
second quarter
of fiscal
2025, we
entered into
a $
750.0
million notional
amount interest
rate swap
to convert
our $
750.0
million of fixed-rate notes due
January 30, 2030
, to a floating rate.
During the second quarter of fiscal 2025, our
$
500.0
million notional amount interest rate swap to convert
our $
500.0
million of fixed-
rate notes due
November 18, 2025
to a floating
rate was called
by the counterparty
prior to the
maturity date. The
previously existing
swap was designated
as a fair value
hedge, and concurrent
with the swap
being called, we
ceased recording
market value adjustments
to the associated hedged debt.
During the
third quarter
of fiscal 2024,
in advance
of our
$
million debt
issuance, we
entered into
and settled
$
250.0
million of
treasury locks, resulting in a gain of $
0.3
million.
The
fair
values
of
the
derivative
positions
used
in
our
risk
management
activities
and
other
assets
recorded
at
fair
value
were
not
material as of February 23, 2025,
and were Level 1 or Level 2 assets and
liabilities in the fair value hierarchy.
We did
not significantly
change our valuation techniques from prior periods.
We
offer
certain
suppliers
access
to
third-party
services
that
allow
them
to
view
our
scheduled
payments
online.
The
third-party
services also
allow suppliers
to finance
advances on
our scheduled
payments at
the sole
discretion of
the supplier
and the third
party.
We
have no
economic interest
in these
financing arrangements
and no
direct relationship
with the
suppliers, the
third parties,
or any
financial institutions
concerning these
services, including
not providing
any form
of guarantee
and not
pledging assets
as security
to
the third
parties or
financial institutions.
All of
our accounts
payable remain
as obligations
to our
suppliers as
stated in
our supplier
agreements. As of February
23, 2025, $
million of our total accounts
payable were payable to
suppliers who utilize these third-
party services.
As of
May 26,
2024, $
million of
our total
accounts payable
were payable
to suppliers
who utilize
these third-
party services.
14
(7) Debt
The components of notes payable were as follows:
Feb. 23, 2025
May 26, 2024
In Millions
Notes Payable
Weighted-
Average
Interest Rate
Notes Payable
Weighted-
Average
Interest Rate
U.S. commercial paper
$
403.0
4.4
%
$
%
Financial institutions
3.7
4.3
11.8
8.8
Total
$
%
$
%
To ensure availability
of funds, we maintain bank credit lines and have commercial paper programs
available to us in the United States
and Europe.
The following table details the fee-paid committed and uncommitted credit
lines we had available as of February 23, 2025:
In Billions
Facility
Amount
Borrowed
Amount
Committed credit facility expiring October 2029
$
2.7
$
Uncommitted credit facilities
0.7
Total committed
and uncommitted credit facilities
$
$
In
the
second
quarter
of fiscal
2025,
we
entered
into
a
$
2.7
billion
fee-paid
committed
credit
facility
that
is
scheduled
to
expire
in
October 2029
. Concurrent with the execution of this credit facility,
we terminated our existing $
2.7
billion credit facility.
The
credit
facilities
contain
covenants,
including
a
requirement
to
maintain
a
fixed
charge
coverage
ratio
of
at
least
2.5
times.
We
were in compliance with all credit facility covenants as of February 23, 2025.
Long-Term
Debt
The
fair
values
and
carrying
amounts
of
long-term
debt,
including
the
current
portion,
were
$
13,233.5
and
$
13,780.6
million,
respectively,
as of
February
23,
The
fair value
of long-term
debt
was estimated
using
market quotations
and
discounted
cash
flows based
on our
current incremental
borrowing rates
for similar
types of
instruments. Long
-term debt
is a
Level 2
liability in
the
fair value hierarchy.
In the third
quarter of fiscal 2025,
we repaid $
500.0
million of
5.241
percent fixed-rate notes
due
November 18, 2025
, using proceeds
from the issuance of commercial paper.
In the second quarter of
fiscal 2025, we issued $
750.0
million of
4.875
percent fixed-rate notes due
January 30, 2030
. We
used the net
proceeds to fund the Whitebridge Pet Brands acquisition.
In the second
quarter of fiscal
2025, we issued
$
750.0
million of
5.25
percent fixed-rate notes
due
January 30, 2035
. We
used the net
proceeds to fund the Whitebridge Pet Brands acquisition.
In the
second quarter
of fiscal
2025, we
issued €
250.0
million of
floating-rate notes
due
April 22, 2026
. We
used the
net proceeds
to
repay €
250.0
million of floating-rate notes due
November 8, 2024
.
In the
second quarter
of fiscal
2025, we
issued €
500.0
million of
floating-rate notes
due
October 22, 2026
. We
used the
net proceeds
to repay €
500.0
million of floating-rate notes due
November 8, 2024
.
In the
fourth quarter
of fiscal 2024,
we issued €
500.0
million of
3.65
percent fixed-rate
notes due
October 23, 2030
. We
used the
net
proceeds for general corporate purposes.
In
the fourth
quarter
of fiscal
2024,
we issued
€
500.0
million
of
3.85
percent
fixed-rate notes
due
April 23, 2034
.
We
used
the net
proceeds for general corporate purposes.
In
the
third
quarter of
fiscal
2024,
we
issued
$
500.0
million
of
4.7
percent
fixed-rate
notes due
January 30, 2027
. We
used
the
net
proceeds to repay $
500.0
million of
3.65
percent fixed-rate notes due
February 15, 2024
.
15
In the second
quarter of fiscal 2024,
we issued €
250.0
million of floating-rate
notes due
November 8, 2024
. We
used the net proceeds
to repay €
250.0
million of floating-rate notes due
November 10, 2023
.
In the
second quarter
of fiscal
2024, we
issued $
500.0
million of
5.5
percent fixed-rate
notes due
October 17, 2028
. We
used the
net
proceeds to repay $
400.0
million of floating-rate notes due
October 17, 2023
, and for general corporate purposes.
In the first
quarter of fiscal
2024, we issued
€
500.0
million of floating-rate
notes due
November 8, 2024
. We
used the net proceeds
to
repay €
500.0
million of floating-rate notes due
July 27, 2023
.
Certain of
our long-term
debt agreements
contain restrictive
covenants.
As of February 23, 2025, we were in compliance with all of
these covenants.
(8) Noncontrolling Interests
The
third-party
holder
of
the
General
Mills
Cereals,
LLC
(GMC)
Class A
Interests
receives
quarterly
preferred
distributions
from
available net
income based
on the application
of a
floating preferred
return rate
to the
holder’s capital
account balance
established in
the
most
recent
mark-to-market
valuation
(currently
$
251.5
million).
On
June
1,
2024,
the
floating
preferred
return
rate
on
GMC’s
Class A Interests was reset to the sum of the
three-month Term SOFR
plus
261
basis points. The preferred return rate is adjusted
every
three years
through a negotiated agreement with the Class A Interest holder or through a remarketing
auction.
Our noncontrolling interests contain restrictive covenants. As of February 23, 2025, we were in compliance with all of these
covenants.
(9) Stockholders’ Equity
The following tables provide details of total comprehensive income:
Quarter Ended
Quarter Ended
Feb. 23, 2025
Feb. 25, 2024
General Mills
Noncontrolling
Interests
General Mills
Noncontrolling
Interests
In Millions
Pretax
Tax
Net
Net
Pretax
Tax
Net
Net
Net earnings, including earnings
attributable to noncontrolling interests
$
625.6
$
$
670.1
$
Other comprehensive income (loss):
Foreign currency translation
$
2.5
$
3.7
6.2
$
10.7
$
(8.1)
2.6
(0.2)
Other fair value changes:
Hedge derivatives
2.3
(1.2)
1.1
(8.8)
1.9
(6.9)
Reclassification to earnings:
Foreign currency translation (a)
33.9
33.9
Hedge derivatives (b)
(3.7)
0.7
(3.0)
(0.3)
0.2
(0.1)
Amortization of losses and
prior service costs (c)
14.1
(2.9)
11.2
11.5
(2.4)
9.1
Other comprehensive income (loss)
$
49.1
$
0.3
49.4
$
13.1
$
(8.4)
4.7
(0.2)
Total comprehensive income
$
675.0
$
5.4
$
674.8
$
6.0
(a)
Loss reclassified from AOCI into earnings is reported in divestiture gain.
(b)
Gain reclassified from AOCI into earnings is reported in interest, net for interest rate swaps and in cost of sales and SG&A expenses for foreign exchange contracts.
(c)
Loss reclassified from AOCI into earnings is reported in benefit plan non-service income.
16
Nine-Month Period Ended
Nine-Month Period Ended
Feb. 23, 2025
Feb. 25, 2024
General Mills
Noncontrolling
Interests
General Mills
Noncontrolling
Interests
In Millions
Pretax
Tax
Net
Net
Pretax
Tax
Net
Net
Net earnings, including earnings
attributable to noncontrolling interests
$
2,001.2
$
$
1,939.1
$
Other comprehensive income (loss):
Foreign currency translation
$
9.5
$
(35.6)
(26.1)
(0.8)
$
(43.7)
$
5.5
(38.2)
0.2
Other fair value changes:
Hedge derivatives
6.6
(2.3)
4.3
(9.0)
1.7
(7.3)
Reclassification to earnings:
Foreign currency translation (a)
33.9
33.9
Hedge derivatives (b)
(2.9)
1.6
(1.3)
(5.0)
2.7
(2.3)
Amortization of losses and
prior service costs (c)
43.2
(8.7)
34.5
34.5
(7.1)
27.4
Other comprehensive income (loss)
$
90.3
$
(45.0)
45.3
(0.8)
$
(23.2)
$
2.8
(20.4)
0.2
Total comprehensive income
$
2,046.5
$
14.9
$
1,918.7
$
20.0
(a)
Loss reclassified from AOCI into earnings is reported in divestiture gain.
(b)
Gain reclassified from AOCI into earnings is reported in interest, net for interest rate swaps and in cost of sales and SG&A expenses for foreign exchange contracts.
(c)
Loss reclassified from AOCI into earnings is reported in benefit plan non-service income.
Accumulated other comprehensive loss balances, net of tax effects,
were as follows:
In Millions
Feb. 23, 2025
May 26, 2024
Foreign currency translation adjustments
$
()
$
()
Unrealized gain from hedge derivatives
Pension, other postretirement, and postemployment benefits:
Net actuarial loss
()
()
Prior service credits
Accumulated other comprehensive loss
$
()
$
()
(10) Stock Plans
We
have various
stock-based compensation
programs under
which awards,
including stock
options, restricted
stock, restricted
stock
units, and performance
awards, may be granted
to employees and non-employee
directors. These programs
and related accounting
are
described in Note
12 to the
Consolidated Financial
Statements included
in our Annual
Report on Form
10-K for the
fiscal year ended
May 26, 2024.
Compensation expense related to stock-based payments recognized
in the Consolidated Statements of Earnings was as follows:
Quarter Ended
Nine-Month Period Ended
In Millions
Feb. 23, 2025
Feb. 25, 2024
Feb. 23, 2025
Feb. 25, 2024
Compensation expense related to stock-based payments
$
$
$
$
Windfall tax benefits from stock-based
payments in income tax expense in our Consolidated Statements of Earnings
were as follows:
Quarter Ended
Nine-Month Period Ended
In Millions
Feb. 23, 2025
Feb. 25, 2024
Feb. 23, 2025
Feb. 25, 2024
Windfall tax benefits from stock-based payments
$
$
$
$
As
of
February
23,
2025,
unrecognized
compensation
expense
related
to
non-vested
stock
options,
restricted
stock
units,
and
performance share units was $
million. This expense will be recognized over
22
months on average.
17
Net cash proceeds from the exercise of stock options
less shares used for withholding taxes and the intrinsic
value of options exercised
were as follows:
Nine-Month Period Ended
In Millions
Feb. 23, 2025
Feb. 25, 2024
Net cash proceeds
$
$
Intrinsic value of options exercised
$
$
We
estimate the
fair value
of each
option on
the grant
date using
a Black-Scholes
option-pricing
model, which
requires us
to make
predictive assumptions
regarding future
stock price volatility,
employee exercise
behavior, dividend
yield, and
the forfeiture
rate. We
estimate our future
stock price volatility
using the historical
volatility over
the expected term
of the option,
excluding time
periods of
volatility we believe a marketplace participant would
exclude in estimating our stock price volatility.
We also have
considered, but did
not use, implied
volatility in our estimate,
because trading activity in
options on our stock,
especially those with
tenors of greater than
6 months, is
insufficient to
provide a reliable
measure of expected
volatility.
Our method of
selecting the other
valuation assumptions
is
explained
in
Note
12
to
the
Consolidated
Financial
Statements
included
in
our
Annual
Report
on
Form
10-K
for
the
fiscal
year
ended May 26, 2024.
The
estimated
fair
values
of
stock
options
granted
and
the
assumptions
used
for
the
Black-Scholes
option-pricing
model
were
as
follows:
Nine-Month Period Ended
Feb. 23, 2025
Feb. 25, 2024
Estimated fair values of stock options granted
$
$
Assumptions:
Risk-free interest rate
%
%
Expected term
8.5
years
8.5
years
Expected volatility
%
%
Dividend yield
%
%
The total grant date fair value of restricted stock unit awards that vested during
the period was as follows:
Nine-Month Period Ended
In Millions
Feb. 23, 2025
Feb. 25, 2024
Total grant date fair
value
$
$
18
(11) Earnings Per Share
Basic and diluted earnings per share (EPS) were calculated using the following:
Quarter Ended
Nine-Month Period Ended
In Millions, Except per Share Data
Feb. 23, 2025
Feb. 25, 2024
Feb. 23, 2025
Feb. 25, 2024
Net earnings attributable to General Mills
$
$
$
$
Average number
of common shares – basic EPS
Incremental share effect from: (a)
Stock options
1.0
1.3
1.4
1.8
Restricted stock units and performance share units
1.4
2.0
1.8
2.1
Average number
of common shares – diluted EPS
Earnings per share – basic
$
$
$
$
Earnings per share – diluted
$
$
$
$
(a)
Incremental
shares
from
stock
options,
restricted
stock
units,
and
performance
share
units
are
computed
by
the
treasury
stock
method. Stock options, restricted
stock units, and performance
share units excluded from
our computation of diluted
EPS because
they were not dilutive were as follows:
Quarter Ended
Nine-Month Period Ended
In Millions
Feb. 23, 2025
Feb. 25, 2024
Feb. 23, 2025
Feb. 25, 2024
Anti-dilutive stock options, restricted stock units, and
performance share units
(12) Share Repurchases
Share repurchases were as follows:
Quarter Ended
Nine-Month Period Ended
In Millions
Feb. 23, 2025
Feb. 25, 2024
Feb. 23, 2025
Feb. 25, 2024
Shares of common stock
Aggregate purchase price
$
$
$
$
(13) Statements of Cash Flows
Our Consolidated Statements of Cash Flows include the following:
Nine-Month Period Ended
In Millions
Feb. 23, 2025
Feb. 25, 2024
Net cash interest payments
$
$
Net income tax payments
$
$
19
(14) Retirement and Postemployment Benefits
Components of net periodic benefit expense (income) are as follows:
Defined Benefit
Pension Plans
Other Postretirement
Benefit Plans
Postemployment
Benefit Plans
Quarter Ended
Quarter Ended
Quarter Ended
In Millions
Feb. 23,
2025
Feb. 25,
2024
Feb. 23,
2025
Feb. 25,
2024
Feb. 23,
2025
Feb. 25,
2024
Service cost
$
12.9
$
14.5
$
1.0
$
1.1
$
1.8
$
1.8
Interest cost
76.6
74.1
5.3
5.3
1.0
1.0
Expected return on plan assets
(104.9)
(104.5)
(9.0)
(8.6)
Amortization of losses (gains)
25.0
21.6
(5.1)
(5.1)
(0.3)
Amortization of prior service costs (credits)
0.3
0.4
(5.5)
(5.5)
(0.3)
0.1
Other adjustments
3.0
2.6
Net expense (income)
$
9.9
$
6.1
$
(13.3)
$
(12.8)
$
5.2
$
5.5
Defined Benefit
Pension Plans
Other Postretirement
Benefit Plans
Postemployment
Benefit Plans
Nine-Month
Period Ended
Nine-Month
Period Ended
Nine-Month
Period Ended
In Millions
Feb. 23,
2025
Feb. 25,
2024
Feb. 23,
2025
Feb. 25,
2024
Feb. 23,
2025
Feb. 25,
2024
Service cost
$
38.8
$
43.1
$
3.2
$
3.5
$
5.3
$
5.5
Interest cost
230.0
222.4
15.9
16.0
3.0
3.0
Expected return on plan assets
(314.9)
(313.4)
(26.9)
(26.0)
Amortization of losses (gains)
75.0
64.6
(15.4)
(15.3)
(0.1)
Amortization of prior service costs (credits)
1.0
1.3
(16.6)
(16.4)
(0.8)
0.4
Other adjustments
8.1
7.8
Curtailment gain
(3.4)
Net expense (income)
$
29.9
$
14.6
$
(39.8)
$
(38.2)
$
15.6
$
16.6
In addition, we had $
million of net plan assets classified as held for sale as of February 23, 2025.
(15) Income Taxes
In
December
2021,
the
Organization
for
Economic
Cooperation
and
Development
(OECD)
established
a
framework,
referred
to
as
Pillar
2,
designed
to
ensure
large
multinational
enterprises
pay
a
minimum
15
percent
level
of
tax
on
the
income
arising
in
each
jurisdiction
in
which
they
operate.
Numerous
countries
have
already
enacted
the
OECD
model
rules
effective
for
taxable
years
beginning
after
December
31,
2023,
which
for
us
is
fiscal
There
was
no
material
impact
on
our
consolidated
financial
statements.
Several
other
countries
have
enacted
or
drafted
legislation
that
is
not
yet
effective
for
us,
and
we
do
not
expect
this
legislation
to
have
a
material
impact
on
our
consolidated
financial
statements.
We
will
continue
to monitor
for
new
legislation
and
guidance and evaluate potential impact on our consolidated financial
statements.
During the
second quarter
of fiscal
2024, we
received a
notice of
proposed adjustment
from the
Internal Revenue
Service associated
with a capital loss
from fiscal 2019.
We
believe that we
have meritorious defenses
against this assessment
and will vigorously
defend
our
position. We
do
not
expect
the
resolution
of
the
proposed
adjustment
to
have
a
material
impact
on
our
financial
position
or
liquidity.
(16) Business Segment and Geographic Information
We
operate
in
the
packaged
foods
industry.
Our
operating
segments
are
as
follows:
North
America
Retail,
International,
North
America Pet,
and North
America Foodservice.
In the
first quarter
of fiscal
2025, we
renamed the
Pet segment
to the
North America
Pet segment to reflect that
pet food results outside
North America are recorded
in the International segment.
There were no changes to
the
composition
of
our
reportable
segments
or
information
reviewed
by
our
chief
operating
decision
maker
and
no
impact
on
our
historical segment operating results.
20
Our North America Retail
operating segment reflects business
with a wide variety of
grocery stores, mass merchandisers, membership
stores,
natural
food
chains,
drug,
dollar
and
discount
chains,
convenience
stores,
and
e-commerce
grocery
providers.
Our
product
categories
in
this
business
segment
include
ready-to-eat
cereals,
refrigerated
yogurt,
soup,
meal
kits,
refrigerated
and
frozen
dough
products,
dessert
and
baking
mixes,
frozen
pizza
and
pizza
snacks,
snack
bars,
fruit
snacks,
savory
snacks,
and
a
wide
variety
of
organic products including ready-to-eat cereal, frozen
and shelf-stable vegetables, meal kits, fruit snacks, and snack bars.
Our
International
operating
segment
consists
of
retail
and
foodservice
businesses
outside
of
the
United
States
and
Canada.
Our
product categories include super-premium
ice cream and frozen desserts, meal kits, salty snacks,
snack bars, dessert and baking mixes,
shelf-stable
vegetables,
and
pet
food
products.
We
also
sell
super-premium
ice
cream
and
frozen
desserts
directly
to
consumers
through owned
retail shops. Our
International segment
also includes products
manufactured in
the United States
for export, mainly
to
Caribbean and Latin American markets, as well as products we
manufacture for sale to our international joint ventures. Revenues
from
export activities are reported in the region or country where the end customer
is located.
Our North
America Pet
operating segment
includes pet
food products
sold primarily
in the
United States
and Canada
in national
pet
superstore
chains,
e-commerce
retailers,
grocery
stores,
regional
pet
store
chains,
mass
merchandisers,
and
veterinary
clinics
and
hospitals.
Our
product
categories
include
dog
and
cat
food
(dry
foods,
wet
foods,
and
treats)
made
with
whole
meats,
fruits,
vegetables,
and other
high-quality
natural
ingredients.
Our tailored
pet product
offerings
address
specific dietary,
lifestyle,
and
life-
stage needs
and span
different product
types, diet
types, breed
sizes for
dogs, life-stages,
flavors, product
functions,
and textures
and
cuts for wet foods.
Our
North
America
Foodservice
segment
consists
of
foodservice
businesses
in
the
United
States
and
Canada.
Our
major
product
categories
in
our
North
America
Foodservice
operating
segment
are
ready-to-eat
cereals,
snacks,
refrigerated
yogurt,
frozen
meals,
unbaked and
fully baked
frozen dough products,
baking mixes,
and bakery
flour.
Many products we
sell are branded
to the consumer
and nearly
all are
branded to
our customers.
We
sell to
distributors and
operators in
many customer
channels including
foodservice,
vending, and supermarket bakeries.
Operating profit
for these
segments excludes
unallocated corporate
items, gain
or loss
on divestitures,
and restructuring,
impairment,
and other
exit costs.
Results from
certain businesses
managed by
our Gold
Medal Ventures
entity are
included within
corporate and
other net
sales and
unallocated corporate
items within
operating
profit. Unallocated
corporate items
also include
corporate overhead
expenses,
variances
to
planned
North
American
employee
benefits
and
incentives,
certain
charitable
contributions,
restructuring
initiative
project-related
costs,
gains
and
losses
on
corporate
investments,
and
other
items
that
are
not
part
of
our
measurement
of
segment operating performance.
These include gains and
losses arising from the
revaluation of certain grain
inventories and gains
and
losses
from
mark-to-market
valuation
of
certain
commodity
positions
until
passed
back
to
our
operating
segments.
These
items
affecting
operating
profit
are
centrally
managed
at
the
corporate
level
and
are
excluded
from
the
measure
of
segment
profitability
reviewed
by executive
management.
Under our
supply chain
organization,
our manufacturing,
warehouse,
and distribution
activities
are
substantially
integrated
across
our
operations
in
order
to
maximize
efficiency
and
productivity.
As
a
result,
fixed
assets
and
depreciation and amortization expenses are neither maintained nor available
by operating segment.
21
Our operating segment results were as follows:
Quarter Ended
Nine-Month Period Ended
In Millions
Feb. 23, 2025
Feb. 25, 2024
Feb. 23, 2025
Feb. 25, 2024
Net sales:
North America Retail
$
$
$
$
International
North America Pet
North America Foodservice
Total segment net
sales
$
4,839.4
$
5,098.4
$
14,923.2
$
15,142.5
Corporate and other
Total net sales
$
$
$
$
Operating profit:
North America Retail
$
$
$
$
International
North America Pet
North America Foodservice
Total segment operating
profit
$
850.6
$
980.4
$
2,952.0
$
3,091.4
Unallocated corporate items
55.9
63.9
244.5
308.3
Divestiture gain
()
()
Restructuring, impairment, and other exit (recoveries) costs
()
Operating profit
$
$
$
$
Net sales for our North America Retail operating units were as follows:
Quarter Ended
Nine-Month Period Ended
In Millions
Feb. 23, 2025
Feb. 25, 2024
Feb. 23, 2025
Feb. 25, 2024
U.S. Meals & Baking Solutions
$
$
$
$
U.S. Morning Foods
U.S. Snacks
Canada
Total
$
$
$
$
Net sales by class of similar products were as follows:
Quarter Ended
Nine-Month Period Ended
In Millions
Feb. 23, 2025
Feb. 25, 2024
Feb. 23, 2025
Feb. 25, 2024
Snacks
$
$
$
$
Cereal
Convenient meals
Dough
Pet
Baking mixes and ingredients
Yogurt
Super-premium ice cream
Other
Total
$
$
$
$
22
Item 2.
Management’s Discussion and Analysis
of Financial Condition and Results of Operations.
INTRODUCTION
This
Management’s
Discussion
and
Analysis
of
Financial
Condition
and
Results
of
Operations
(MD&A)
should
be
read
in
conjunction
with
the
MD&A
included
in
our
Annual
Report
on
Form
10-K
for
the
fiscal
year
ended
May
26,
2024,
for
important
background
regarding,
among other
things, our
key business
drivers.
Significant
trademarks and
service marks
used in
our business
are set forth in
italics
herein. Certain terms used throughout this report are defined in the
“Glossary” section below.
The
impact
that
the
imposition
of
tariffs
and
changes
to
global
trade
policies
will have
on
our
consolidated
results
of operations
is
uncertain. We
expect tariffs on
goods imported into
the U.S. from
Canada, Mexico, and
China, and other
countries upon which
tariffs
may
be imposed,
to continue
to be
met with
retaliatory
tariffs
from
those countries
which
would
impact
our consolidated
results of
operations as we import
inputs required for our
manufacturing processes and
export our finished products.
The extent and duration
of
tariffs
and the
resulting impact
on macroeconomic
conditions and
on our
business are
uncertain and
may depend
on various
factors,
including
negotiations
between
the
U.S.
and
affected
countries,
retaliation
imposed
by
other
countries,
tariff
exemptions,
negative
sentiment
toward
U.S.
companies
and
products,
and
availability
of
lower
cost
inputs
that
may
be
sourced
domestically.
We
will
continue to evaluate the nature and extent of the impact to our business and
consolidated results of operations.
CONSOLIDATED
RESULTS
OF OPERATIONS
Third Quarter Results
In the third quarter of fiscal 2025,
net sales and organic net sales decreased
5 percent compared to the same period
last year. Operating
profit decreased
2 percent
to $891
million, primarily
driven by
unfavorable net
price realization
and mix,
a decrease
in contributions
from volume growth, net recoveries recorded in fiscal 2024 from
the fiscal 2023 voluntary recall on certain international
Häagen-Dazs
ice cream
products,
and transaction
costs primarily
related to
the definitive
agreements to
sell our
North American
yogurt businesses
and the Whitebridge
Pet Brands acquisition.
These impacts were partially
offset by a
divestiture gain related
to the sale of
our Canada
yogurt
business
and
a
favorable
change
in
the
mark-to-market
valuation
of
certain
commodity
positions
and
grain
inventories.
Operating profit margin
of 18.4 percent increased 50
basis points. Adjusted operating profit
of $801 million decreased
13 percent on a
constant-currency
basis, primarily
driven
by unfavorable
net price
realization
and
mix and
a decrease
in contributions
from
volume
growth. Adjusted
operating profit
margin decreased
140 basis points
to 16.5 percent.
Diluted earnings
per share
of $1.12
decreased 4
percent in
the third
quarter of
fiscal 2025.
Adjusted diluted
earnings per
share of
$1.00 decreased
15 percent
on a
constant-currency
basis
compared
to
the
third
quarter
of
fiscal
See
the
“Non-GAAP
Measures”
section
below
for
a
description
of
our
use
of
measures not defined by GAAP.
A summary of our consolidated financial results for the third quarter of
fiscal 2025 follows:
Quarter Ended Feb. 23, 2025
In millions,
except per share
Quarter Ended
Feb. 23, 2025 vs.
Feb. 25, 2024
Percent
of Net
Sales
Constant-
Currency
Growth (a)
Net sales
$
4,842.2
(5)
%
Operating profit
891.4
(2)
%
18.4
%
Net earnings attributable to General Mills
625.6
(7)
%
Diluted earnings per share
$
1.12
(4)
%
Organic net sales growth rate (a)
(5)
%
Adjusted operating profit (a)
800.8
(12)
%
16.5
%
(13)
%
Adjusted diluted earnings per share (a)
$
1.00
(15)
%
(15)
%
(a)
See the “Non-GAAP Measures” section below for our use of measures not defined by
GAAP.
23
Consolidated
net sales
were as follows:
Quarter Ended
Feb. 23, 2025
Feb. 23, 2025 vs.
Feb. 25, 2024
Feb. 25, 2024
Net sales (in millions)
$
4,842.2
(5)
%
$
5,099.2
Contributions from volume growth (a)
(4)
pts
Net price realization and mix
Flat
Foreign currency exchange
(1)
pt
Note: Table may
not foot due to rounding.
(a)
Measured in tons based on the stated weight of our product shipments.
Net sales
in the
third quarter
of fiscal
2025 decreased
5 percent
compared to
the same
period in
fiscal 2024,
driven by
a decrease
in
contributions from volume growth and unfavorable foreign currency
exchange.
Components of organic net sales growth are shown in the following
table:
Quarter Ended Feb. 23, 2025 vs.
Quarter Ended Feb. 25, 2024
Contributions from organic volume growth (a)
(4)
pts
Organic net price realization and mix
(1)
pt
Organic net sales growth
(5)
pts
Foreign currency exchange
(1)
pt
Acquisitions and divestiture
1
pt
Net sales growth
(5)
pts
Note: Table may
not foot due to rounding.
(a)
Measured in tons based on the stated weight of our product shipments.
Organic
net
sales
decreased
5
percent
in
the
third
quarter
of
fiscal
2025
compared
to
the
same
period
in
fiscal
2024,
driven
by
a
decrease in contributions from organic volume growth
and unfavorable organic net price realization and mix.
Cost of sales
decreased $189 million
to $3,203 million
in the third
quarter of fiscal
2025 compared to
the same period
in fiscal 2024.
The decrease was primarily
driven by a $122 million decrease
attributable to lower volume
and a $18 million net
decrease attributable
to
product
rate
and
mix.
We
recorded
a
$23 million
net
decrease
in
cost
of
sales
related
to
the
mark-to-market
valuation
of
certain
commodity
positions
and
grain
inventories
in
the
third
quarter
of
fiscal
2025,
compared
to
a
$26 million
net
increase
in
the
third
quarter of fiscal 2024.
Selling,
general
and
administrative
(SG&A)
expenses
increased
$54 million
to
$844 million
in
the
third
quarter
of
fiscal
2025,
compared to
the same period
in fiscal 2024,
primarily driven
by net recoveries
recorded in fiscal
2024 from
the fiscal 2023
voluntary
recall on
certain
international
Häagen-Dazs
ice cream
products and
transaction
costs related
to the
definitive agreements
to sell
our
North American
yogurt businesses
and the
Whitebridge Pet
Brands acquisition.
SG&A expenses
as a
percent of
net sales
in the
third
quarter of fiscal 2025 increased 190 basis points compared to the third quarter
of fiscal 2024.
Divestiture
gain
of $96
million in
the third
quarter of
fiscal 2025,
related to
the sale
of our
Canada yogurt
business (please
refer to
Note 2 to the Consolidated Financial Statements in Part I, Item 1 of this report).
Restructuring, impairment,
and other exit
(recoveries) costs
totaled $1
million of net
recoveries in
the third quarter
of fiscal 2025
related to actions
previously announced,
compared to $6
million of net
restructuring costs in
the same period
last year (please
refer to
Note 3 to the Consolidated Financial Statements in Part I, Item 1 of this report).
Benefit plan
non-service income
totaled $14 million
in the
third quarter
of fiscal
2025,
compared to
$19 million in
the same
period
last year, primarily reflecting higher
amortization of losses and interest costs.
Interest,
net
for the
third quarter
of fiscal
2025 totaled
$136 million, up
$15 million from
the third
quarter of
fiscal 2024,
primarily
driven by higher average long-term debt levels.
The
effective
tax
rate
for
the third
quarter
of fiscal
2025
was 19.8
percent
compared
to 18.5
percent
for
the
third
quarter
of fiscal
- The
1.3 percentage
point increase
was primarily
due to
certain nonrecurring
discrete tax
benefits in fiscal
2024, partially
offset
by
favorable
earnings
mix
by jurisdiction
in
fiscal
Our effective
tax rate
excluding
certain
items
affecting
comparability
was
24
21.0 percent in the
third quarter of fiscal
2025,
compared to 18.4 percent
in the same period
last year (see the “Non-GAAP
Measures”
section below for
a description of
our use of measures
not defined by
GAAP). The 2.6 percentage
point increase was
primarily due to
certain nonrecurring discrete tax benefits in fiscal 2024, partially offset
by favorable earnings mix by jurisdiction in fiscal 2025.
After-tax earnings
from joint
ventures
for the
third quarter
of fiscal
2025
decreased to
$14 million compared
to $18 million
in the
same
period
in
fiscal
2024,
primarily
driven
by
our
share
of
asset
impairment
charges
at
Cereal
Partners
Worldwide
(CPW)
in
the
third
quarter
of
fiscal
2025,
partially
offset
by
lower
SG&A
expenses
and
higher
volume
at
Häagen-Dazs
Japan,
Inc.
(HDJ).
On
a
constant-currency
basis,
after-tax
earnings
from
joint ventures
decreased
16 percent
(see the
“Non-GAAP
Measures”
section
below
for a description of our use of measures not defined by GAAP).
The components of our joint ventures’ net sales growth are shown in the following
table:
Quarter Ended Feb. 23, 2025 vs.
Quarter Ended Feb. 25, 2024
CPW
HDJ
Total
Contributions from volume growth (a)
(4)
pts
8
pts
Net price realization and mix
3
pts
2
pts
Net sales growth in constant currency
(1)
pt
10
pts
1
pt
Foreign currency exchange
(7)
pts
(5)
pts
(7)
pts
Net sales growth
(8)
pts
5
pts
(6)
pts
Note: Table may
not foot due to rounding.
(a)
Measured in tons based on the stated weight of our product shipments.
Average
diluted
shares
outstanding
decreased
by
18
million
in
the
third
quarter
of
fiscal
2025
from
the
same
period
a
year
ago
primarily due to share repurchases, partially offset by option
exercises.
Nine-Month Results
In the
nine-month period
ended February
23, 2025,
net sales
and organic
net sales
decreased 1
percent compared
to the
same period
last year.
Operating profit
increased 6 percent
to $2,801
million, primarily
driven by
a goodwill impairment
charge recorded
in fiscal
2024 and lower restructuring charges
,
lower input costs, and a divestiture gain
related to the sale of our Canada yogurt
business.
These
impacts
were
partially
offset
by
unfavorable
net
price
realization
and
mix,
an
increase
in
SG&A
expenses,
and
transaction
costs
primarily
related
to
the
definitive
agreements
to
sell
our
North
American
yogurt
businesses
and
the
Whitebridge
Pet
Brands
acquisition.
Operating
profit
margin
of
18.8
percent
increased
130
basis
points
compared
to
the
same
period
last
year.
Adjusted
operating
profit
of
$2,730
million
decreased
3
percent
on
a
constant-currency
basis,
primarily
driven
by
unfavorable
net
price
realization
and
mix
and
an
increase
in
SG&A
expenses,
partially
offset
by
lower
input
costs.
Adjusted
operating
profit
margin
decreased
20
basis
points
to
18.3
percent.
Diluted
earnings
per
share
of
$3.57
increased
7
percent
in
the
nine-month
period
ended
February 23, 2025,
and adjusted diluted
earnings per share
of $3.47 decreased
1 percent on
a constant-currency basis
compared to the
same period last year (see the “Non-GAAP Measures” section below for
a description of our use of measures not defined by GAAP).
A summary of our consolidated financial results for the nine-month period
ended February 23, 2025, follows:
Nine-Month Period Ended Feb. 23, 2025
In millions,
except per share
Nine-Month
Period Ended
Feb. 23, 2025 vs.
Feb. 25, 2024
Percent of Net
Sales
Constant-
Currency
Growth (a)
Net sales
$
14,930.4
(1)
%
Operating profit
2,800.8
6
%
18.8
%
Net earnings attributable to General Mills
2,001.2
3
%
Diluted earnings per share
$
3.57
7
%
Organic net sales growth rate (a)
(1)
%
Adjusted operating profit (a)
2,730.1
(3)
%
18.3
%
(3)
%
Adjusted diluted earnings per share (a)
$
3.47
(1)
%
(1)
%
(a)
See the “Non-GAAP Measures” section below for our use of measures not defined by GAAP.
25
Consolidated
net sales
were as follows:
Nine-Month Period Ended
Feb. 23, 2025
Feb. 23, 2025 vs.
Feb. 25, 2024
Feb. 25, 2024
Net sales (in millions)
$
14,930.4
(1)
%
$
15,143.3
Contributions from volume growth (a)
Flat
Net price realization and mix
(1)
pt
Foreign currency exchange
Flat
Note: Table may not foot due to rounding.
(a)
Measured in tons based on the stated weight of our product shipments.
The
1
percent
decrease
in
net
sales
for
the
nine-month
period
ended
February
23,
2025,
was
driven
by
unfavorable
net
price
realization and mix.
Components of organic net sales growth are shown in the following
table:
Nine-Month Period Ended Feb. 23, 2025 vs.
Nine-Month Period Ended Feb. 25, 2024
Contributions from organic volume growth (a)
Flat
Organic net price realization and mix
(1)
pt
Organic net sales growth
(1)
pt
Foreign currency exchange
Flat
Acquisitions and divestiture
1
pt
Net sales growth
(1)
pt
Note: Table may not foot due to rounding.
(a)
Measured in tons based on the stated weight of our product shipments.
Organic
net
sales
decreased
1
percent
in
the
nine-month
period
ended
February
23,
2025,
driven
by
unfavorable
organic
net
price
realization and mix.
Cost
of
sales
decreased
$228 million
to
$9,671
million
in
the
nine-month
period
ended
February
23,
2025,
compared
to
the
same
period
in fiscal
- The
decrease was
primarily
driven by
a $152
million
decrease attributable
to product
rate and
mix
and
a $30
million decrease
attributable to
lower volume.
We
recorded a
$24 million net
decrease in
cost of
sales related
to the
mark-to-market
valuation
of
certain
commodity
positions
and
grain
inventories
in
the
nine-month
period
ended
February
23,
2025,
compared
to
a
$6 million net increase in the nine-month period ended February
25, 2024. In addition, we recorded $1 million of restructuring
charges
in
the
nine-month
period
ended
February
23,
2025,
compared
to
$17
million
of
restructuring
charges
in
the
same
period
last
year
(please refer to Note 3 to the Consolidated Financial Statements in Part I, Item 1 of
this report).
SG&A expenses
increased $91
million to
$2,552 million
in the
nine-month
period ended
February
23, 2025,
compared to
the same
period
in
fiscal
2024,
primarily
driven
by
transaction
costs
related
to
the
definitive
agreements
to
sell
our
North
American
yogurt
businesses and the
Whitebridge Pet Brands
acquisition,
net recoveries recorded
in fiscal 2024
from the fiscal 2023
voluntary recall on
certain international
Häagen-Dazs
ice cream products,
and the addition of a pet
food business in Europe. SG&A
expenses as a percent
of net sales increased 90 basis points in the nine-month period ended February
23, 2025, compared to the same period of fiscal 2024.
Divestiture gain
of $96
million in the
nine-month period
ended February
23, 2025, related
to the sale
of our
Canada yogurt
business
(please refer to Note 2 to the Consolidated Financial Statements in Part I, Item 1
of this report).
Restructuring, impairment,
and other exit
costs
totaled $3 million in
the nine-month period
ended February 23,
2025, compared to
$131 million
of net
restructuring and
impairment costs
in the
same period
last year.
In fiscal
2024, we
recorded a
$117 million
non-
cash
goodwill
impairment
charge
related
to
our
Latin
America
reporting
unit
(please
refer
to
Note
3
to
the
Consolidated
Financial
Statements in Part I, Item 1 of this report).
Benefit plan non-service
income
totaled $42 million
in the nine-month
period ended February
23, 2025, compared
to $56 million
in
the same period last year, primarily reflecting
higher amortization of losses and interest costs.
Interest, net
for the nine-month
period ended February
23, 2025,
increased $28 million
to $384 million
compared to the
same period
of fiscal 2024, primarily driven by higher average long-term debt levels.
26
The
effective
tax rate
for
the nine-month
period ended
February
23,
2025, was
20.5
percent compared
to 19.5
percent in
the same
period
last
year.
The
1.0
percentage
point
increase
was
primarily
due
to
certain
nonrecurring
discrete
tax
benefits
in
fiscal
2024,
partially
offset
by
favorable
earnings
mix
by
jurisdiction
in
fiscal
Our
effective
tax
rate
excluding
certain
items
affecting
comparability was
20.9
percent in
the nine-month
period ended
February 23,
2025, compared
to 20.1
percent in
the same
period last
year
(see
the
“Non-GAAP
Measures”
section
below
for
a
description
of
our
use
of
measures
not
defined
by
GAAP).
The
0.8
percentage
point
increase
is
primarily
due
to
certain
nonrecurring
discrete
tax
benefits
in
fiscal
2024,
partially
offset
by
favorable
earnings mix by jurisdiction in fiscal 2025.
After-tax earnings
from
joint ventures
for the
nine-month
period ended
February 23,
2025,
decreased to
$64 million compared
to
$66 million
in
the
same
period
in
fiscal
2024,
primarily
driven
by
our
share
of
asset
impairment
charges
at
CPW
in
fiscal
2025,
partially offset
by lower input costs
at CPW and lower
SG&A expenses at
HDJ. On a constant-currency
basis, after-tax earnings
from
joint ventures decreased
1 percent (see the
“Non-GAAP Measures” section
below for a description
of our use of
measures not defined
by GAAP).
Nine-Month Period Ended Feb. 23, 2025 vs.
Nine-Month Period Ended Feb. 25, 2024
CPW
HDJ
Total
Contributions from volume growth (a)
(3)
pts
3
pts
Net price realization and mix
3
pts
Flat
Net sales growth in constant currency
Flat
3
pts
1
pt
Foreign currency exchange
(4)
pts
(4)
pts
(4)
pts
Net sales growth
(3)
pts
Flat
(3)
pts
Note: Table may not foot due to rounding.
(a)
Measured in tons based on the stated weight of our product shipments.
Average
diluted
shares
outstanding
decreased
by
23 million
in
the
nine-month
period
ended
February
23,
2025,
from
the
same
period a year ago primarily due to share repurchases, partially offset
by option exercises.
SEGMENT OPERATING
RESULTS
Our
businesses
are
organized
into
four
operating
segments:
North
America
Retail,
International,
North
America
Pet,
and
North
America Foodservice. Please refer
to Note 16 of the
Consolidated Financial Statements in
Part I, Item 1 of
this report for a description
of our operating segments.
North America Retail Segment Results
North America Retail net sales were as follows:
Quarter Ended
Nine-Month Period Ended
Feb. 23,
2025
Feb. 23, 2025 vs
Feb. 25, 2024
Feb. 25,
2024
Feb. 23,
2025
Feb. 23, 2025 vs
Feb. 25, 2024
Feb. 25,
2024
Net sales (in millions)
$
3,009.1
(7)
%
$
3,242.1
$
9,347.2
(3)
%
$
9,620.1
Contributions from volume growth (a)
(6)
pts
(3)
pts
Net price realization and mix
(1)
pt
1
pt
Foreign currency exchange
Flat
Flat
Note: Table may
not foot due to rounding.
(a)
Measured in tons based on the stated weight of our product shipments.
North
America
Retail net
sales decreased
7 percent
in the
third
quarter
of fiscal
2025,
compared
to
the same
period in
fiscal
2024,
driven by a decrease in contributions from volume growth and unfavorable
net price realization and mix.
North America Retail net sales decreased 3 percent in
the nine-month period ended February 23, 2025, compared
to the same period in
fiscal 2024, driven by a decrease in contributions from volume growth,
partially offset by favorable net price realization and mix.
27
The components of North America Retail organic net
sales growth are shown in the following table:
Quarter Ended
Nine-Month Period Ended
Feb. 23, 2025
Feb. 23, 2025
Contributions from organic volume growth (a)
(5)
pts
(3)
pts
Organic net price realization and mix
(1)
pt
Flat
Organic net sales growth
(6)
pts
(2)
pts
Foreign currency exchange
Flat
Flat
Divestiture (b)
(1)
pt
Flat
Net sales growth
(7)
pts
(3)
pts
Note: Table may
not foot due to rounding.
(a) Measured in tons based on the stated weight of our product shipments.
(b) Divestiture of Canada yogurt business in the third quarter of fiscal 2025. Please refer
to Note 2 to the Consolidated Financial
Statements in Part I, Item 1 of this report.
North America
Retail organic
net sales
decreased 6
percent in
the third
quarter of
fiscal 2025,
compared to
the same
period in
fiscal
2024, driven by a decrease in contributions from organic
volume growth and unfavorable organic net price realization
and mix.
North America Retail
organic net
sales decreased 2
percent in the
nine-month period
ended February 23,
2025, compared to
the same
period in fiscal 2024, driven by a decrease in contributions from organic
volume growth.
North America Retail net sales percentage change by operating unit are shown
in the following table:
Quarter Ended
Nine-Month Period Ended
Feb. 23, 2025
Feb. 23, 2025
U.S. Snacks
(6)
%
(3)
%
U.S. Morning Foods
(10)
%
(3)
%
Canada (a)
(19)
%
(7)
%
U.S. Meals & Baking Solutions
(3)
%
(1)
%
Total
(7)
%
(3)
%
(a)
On a constant-currency
basis, Canada net
sales decreased 14
percent in the
third quarter of fiscal
2025 and decreased
4 percent in
the nine
-month period
ended February
23, 2025,
compared to
the same
periods in
fiscal 2024.
See the
“Non-GAAP Measures”
section below for our use of this measure not defined by GAAP.
Segment
operating
profit
decreased
14
percent
to
$648 million
in
the
third
quarter
of
fiscal
2025,
compared
to
$752
million
in
the
same period
in fiscal 2024
,
primarily driven
by a decrease
in contributions
from volume
growth and
unfavorable net
price realization
and mix.
Segment operating
profit decreased
14 percent
on a
constant-currency basis
in the
third quarter
of fiscal
2025, compared
to
the same period in fiscal 2024 (see the “Non-GAAP Measures” section below
for our use of this measure not defined by GAAP).
Segment
operating
profit
decreased
6
percent
to
$2,256 million
in
the
nine-month
period
ended
February
23,
2025,
compared
to
$2,410 million in the same
period in fiscal 2024, primarily
driven by a decrease in
contributions from volume growth
and higher input
costs, partially offset
by favorable net
price realization
and mix. Segment
operating profit decreased
6 percent on
a constant-currency
basis in the nine
-month period ended
February 23, 2025,
compared to the
same period in fiscal
2024 (see the
“Non-GAAP Measures”
section below for our use of this measure not defined by GAAP).
28
International Segment Results
International net sales were as follows:
Quarter Ended
Nine-Month Period Ended
Feb. 23,
2025
Feb. 23, 2025 vs
Feb. 25, 2024
Feb. 25,
2024
Feb. 23,
2025
Feb. 23, 2025 vs
Feb. 25, 2024
Feb. 25,
2024
Net sales (in millions)
$
651.3
(4)
%
$
680.1
$
2,058.9
(1)
%
$
2,079.0
Contributions from volume growth (a)
(1)
pt
4
pts
Net price realization and mix
2
pts
(2)
pts
Foreign currency exchange
(5)
pts
(2)
pts
Note: Table may
not foot due to rounding.
(a)
Measured in tons based on the stated weight of our product shipments.
International net
sales decreased
4 percent
in the
third quarter
of fiscal
2025, compared
to the
same period
in fiscal
2024, driven
by
unfavorable
foreign
currency
exchange
and
a
decrease
in
contributions
from
volume
growth,
partially
offset
by
favorable
net
price
realization and mix.
International net
sales decreased
1 percent
in the
nine-month period
ended February
23, 2025,
compared to
the same
period in
fiscal
2024, driven
by unfavorable
net price
realization and
mix and
unfavorable foreign
currency exchange,
partially offset
by an
increase
in contributions from volume growth.
The components of International organic net sales growth
are shown in the following table:
Quarter Ended
Nine-Month Period Ended
Feb. 23, 2025
Feb. 23, 2025
Contributions from organic volume growth (a)
(4)
pts
2
pts
Organic net price realization and mix
Flat
(4)
pts
Organic net sales growth
(3)
pts
(2)
pts
Foreign currency exchange
(5)
pts
(2)
pts
Acquisition (b)
4
pts
4
pts
Net sales growth
(4)
pts
(1)
pt
Note: Table may
not foot due to rounding.
(a) Measured in tons based on the stated weight of our product shipments.
(b) Acquisition of a pet food business in Europe in fiscal 2024. Please refer
to Note 2 to the Consolidated Financial Statements in
Part I, Item 1 of this report.
International
organic
net
sales
decreased
3
percent
in
the
third
quarter
of
fiscal
2025,
compared
to
the
same
period
in
fiscal
2024,
driven by a decrease in contributions from organic volume
growth.
International organic net
sales decreased 2 percent
in the nine-month period
ended February 23, 2025,
compared to the same period
in
fiscal 2024,
driven by
unfavorable organic
net price
realization and
mix, partially
offset by
an increase
in contributions
from organic
volume growth.
Segment operating
profit decreased
1 percent
to $18
million in
the third
quarter of
fiscal 2025,
compared to
the same period
in fiscal
2024,
primarily driven
by unfavorable net
price realization and
mix and higher
SG&A expenses, partially
offset by
lower input costs.
Segment operating
profit decreased
20 percent
on a
constant-currency basis
in the
third quarter
of fiscal
2025, compared
to the
same
period in fiscal 2024 (see the “Non-GAAP Measures” section below
for our use of this measure not defined by GAAP).
Segment
operating
profit
decreased
39
percent
to
$63 million
in
the
nine-month
period
ended
February
23,
2025,
compared
to
$103 million
in
the
same
period
in
fiscal
2024,
primarily
driven
by
unfavorable
net
price
realization
and
mix
and
higher
SG&A
expenses,
partially
offset
by
lower
input
costs
and
an
increase
in
contributions
from
volume
growth.
Segment
operating
profit
decreased 50 percent
on a constant-currency
basis in the nine-month
period ended February
23, 2025, compared
to the same period
in
fiscal 2024 (see the “Non-GAAP Measures” section below for our use of this measure
not defined by GAAP).
29
North America Pet Segment Results
North America Pet net sales were as follows:
Quarter Ended
Nine-Month Period Ended
Feb. 23,
2025
Feb. 23, 2025 vs
Feb. 25, 2024
Feb. 25,
2024
Feb. 23,
2025
Feb. 23, 2025 vs
Feb. 25, 2024
Feb. 25,
2024
Net sales (in millions)
$
623.7
Flat
$
624.5
$
1,795.6
1
%
$
1,773.7
Contributions from volume growth (a)
(1)
pt
3
pts
Net price realization and mix
1
pt
(2)
pts
Foreign currency exchange
Flat
Flat
Note: Table may
not foot due to rounding.
(a)
Measured in tons based on the stated weight of our product shipments.
North America Pet net sales in the third quarter of fiscal 2025, essentially matched
the same period in fiscal 2024.
North America
Pet net
sales increased
1 percent
in the
nine-month period
ended February
23, 2025,
compared to
the same
period in
fiscal 2024, driven by an increase in contributions from volume growth,
partially offset by unfavorable net price realization and mix.
The components of North America Pet organic net sales growth are
shown in the following table:
Quarter Ended
Nine-Month Period Ended
Feb. 23, 2025
Feb. 23, 2025
Contributions from organic volume growth (a)
(3)
pts
3
pts
Organic net price realization and mix
(1)
pt
(3)
pts
Organic net sales growth
(5)
pts
Flat
Foreign currency exchange
Flat
Flat
Acquisition (b)
5
pts
2
pts
Net sales growth
Flat
1
pt
Note: Table may
not foot due to rounding.
(a) Measured in tons based on the stated weight of our product shipments.
(b) Acquisition of Whitebridge Pet Brands business in fiscal 2025.
Please refer to Note 2 to the Consolidated Financial Statements in
Part I, Item 1 of this report.
North
America
Pet
organic
net
sales
decreased
5
percent
in
the
third
quarter
of
fiscal
2025,
compared
to
the
same
period
in
fiscal
2024, driven by a decrease in contributions from organic volume
growth and unfavorable organic net price realization and mix.
North America
Pet organic
net sales in
the nine-month
period ended February
23, 2025, essentially
matched the
same period
in fiscal
Segment
operating
profit
decreased
20
percent
to
$102
million
in
the
third
quarter
of
fiscal
2025,
compared
to
$128 million
in
the
same
period
in
fiscal
2024,
primarily
driven
by
higher
SG&A
expenses,
including
increased
media
and
advertising
expenses,
and
higher
input
costs.
Segment
operating
profit
decreased
20
percent
on
a
constant-currency
basis
in
the
third
quarter
of
fiscal
2025,
compared to the
same period in
fiscal 2024 (see
the “Non-GAAP Measures”
section below for
our use of
this measure not
defined by
GAAP).
Segment
operating
profit
increased
6
percent
to
$361 million
in
the
nine-month
period
ended
February
23,
2025,
compared
to
$342 million
in the
same period
in fiscal
2024,
primarily
driven by
lower input
costs and
an increase
in contributions
from
volume
growth,
partially
offset
by
unfavorable
net
price
realization
and
mix
and
higher
SG&A
expenses,
including
increased
media
and
advertising
expenses.
Segment
operating
profit
increased
6
percent
on
a
constant-currency
basis
in
the
nine-month
period
ended
February
23,
2025,
compared
to
the
same
period
in
fiscal
2024
(see
the
“Non-GAAP
Measures”
section
below
for
our
use
of
this
measure not defined by GAAP).
30
North America Foodservice Segment Results
North America Foodservice net sales were as follows:
Quarter Ended
Nine-Month Period Ended
Feb. 23,
2025
Feb. 23, 2025 vs
Feb. 25, 2024
Feb. 25,
2024
Feb. 23,
2025
Feb. 23, 2025 vs
Feb. 25, 2024
Feb. 25,
2024
Net sales (in millions)
$
555.3
1
%
$
551.7
$
1,721.5
3
%
$
1,669.7
Contributions from volume growth (a)
(1)
pt
2
pts
Net price realization and mix
2
pts
2
pts
Foreign currency exchange
Flat
Flat
Note: Table may
not foot due to rounding.
(a)
Measured in tons based on the stated weight of our product shipments.
North
America
Foodservice
net
sales
increased
1
percent
in
the
third
quarter
of
fiscal
2025,
compared
to
the
same
period
in
fiscal
2024,
driven by favorable net price realization and mix, partially offset by
a decrease in contributions from volume growth.
North
America
Foodservice net
sales increased
3 percent
in the
nine-month
period ended
February 23,
2025,
compared to
the same
period in fiscal 2024, driven by an increase in contributions from volume growth
and favorable net price realization and mix.
The components of North America Foodservice organic
net sales growth are shown in the following table:
Quarter Ended
Nine-Month Period Ended
Feb. 23, 2025
Feb. 23, 2025
Contributions from organic volume growth (a)
(1)
pt
2
pts
Organic net price realization and mix
2
pts
2
pts
Organic net sales growth
1
pt
3
pts
Foreign currency exchange
Flat
Flat
Net sales growth
1
pt
3
pts
Note: Table may
not foot due to rounding.
(a) Measured in tons based on the stated weight of our product shipments.
North America
Foodservice organic
net sales
increased 1
percent in
the third
quarter of
fiscal 2025,
compared to
the same
period in
fiscal
2024,
driven
by
favorable
organic
net
price
realization
and
mix,
partially
offset
by
a
decrease
in
contributions
from
organic
volume growth.
North America Foodservice
organic net
sales increased 3
percent in the
nine-month period
ended February 23,
2025, compared
to the
same
period
in
fiscal
2024,
driven
by
an
increase
in
contributions
from
organic
volume
growth
and
favorable
organic
net
price
realization and mix.
Segment operating
profit increased
1 percent
to $82
million in
the third
quarter of
fiscal 2025,
compared to
the same
period in
fiscal
2024,
primarily
driven
by
favorable
net
price
realization
and
mix,
partially
offset
by
higher
input
costs.
Segment
operating
profit
increased 1 percent on a constant-currency basis in
the third quarter of fiscal 2025, compared to
the same period in fiscal 2024 (see the
“Non-GAAP Measures” section below for our use of this measure not
defined by GAAP).
Segment
operating
profit
increased
15
percent
to
$272 million
in
the
nine-month
period
ended
February
23,
2025,
compared
to
$236 million in
the same
period in
fiscal 2024,
primarily driven
by favorable
net price
realization and
mix. Segment
operating profit
increased 15
percent on a
constant-currency basis in
the nine-month period
ended February 23,
2025, compared
to the same
period in
fiscal 2024 (see the “Non-GAAP Measures” section below for our use of this measure
not defined by GAAP).
31
UNALLOCATED
CORPORATE
ITEMS
Unallocated corporate
expenses totaled
$56 million
in the third
quarter of
fiscal 2025,
compared to
$64 million
in the same
period in
fiscal
In
the
third
quarter
of
fiscal
2025,
we
recorded
a
$23
million
net
decrease
in
expense
related
to
the
mark-to-market
valuation of
certain commodity
positions and grain
inventories, compared
to a $26
million net increase
in expense in
the same period
last year.
In the third quarter
of fiscal 2024, we
recorded $31 million of
net recoveries related
to a voluntary recall
on certain
Häagen-
Dazs
ice cream
products in
fiscal 2023.
In addition,
we recorded
$24 million
of transaction
costs related
to the
definitive agreements
to sell our North American
yogurt businesses in the third quarter of fiscal 2025.
We also recorded
$3 million of integration costs in the
third quarter
of fiscal
2025, related
to the
fiscal 2025
acquisition of
Whitebridge
Pet Brands
and the
fiscal 2024
acquisition of
a pet
food business in
Europe.
Certain compensation and
benefit related expenses decreased
in the third quarter
of fiscal 2025,
compared to
the same period
in fiscal 2024.
In addition,
we recorded
$2 million of
net losses related
to valuation
adjustments on
certain corporate
investments in the third quarter of fiscal 2025, compared to $3
million of net losses in the same quarter of fiscal 2024.
Unallocated corporate
expenses totaled $244
million in the
nine-month period
ended February 23,
2025, compared
to $308 million
in
the same period
in fiscal 2024. In
the nine-month period
ended February 23, 2025,
we recorded a
$24 million net
decrease in expense
related to the mark-to-market
valuation of certain commodity
positions and grain inventories, compared
to a $6 million net
increase in
expense in
the same
period last year.
In addition,
we recorded
$33 million
of transaction
costs related
to the
definitive agreements
to
sell our
North American
yogurt businesses
and the
Whitebridge Pet
Brands acquisition
in the
nine-month period
ended February
23,
2025, compared to $1 million of
transaction costs in the same period
last year.
We
also recorded $7 million of integration
costs related
to the
fiscal 2025
acquisition of
Whitebridge Pet
Brands and
the fiscal
2024 acquisition
of a
pet food
business in
Europe in
the nine-
month period ended
February 23, 2025.
In the nine-month
period ended February
25, 2024, we recorded
$31 million of net
recoveries
related to a voluntary
recall on certain
Häagen-Dazs
ice cream products in fiscal
- We
recorded $5 million of
net losses related to
valuation adjustments on certain corporate
investments in the nine-month period
ended February 23, 2025, compared to
$25 million of
net
losses
in
the
same
period
of
fiscal
In
addition,
certain
compensation
and
benefit
related
expenses
decreased
in
the
nine-
month period
ended February
23, 2025,
compared to
the same period
in fiscal
- We
recorded $1
million of
restructuring charges
and an immaterial
amount of restructuring
initiative project-related
costs in cost
of sales in
the nine-month period
ended February 23,
2025, compared to $17 million of restructuring charges
and $2 million of restructuring initiative project-related
costs in cost of sales in
the same period last year.
LIQUIDITY
AND CAPITAL
RESOURCES
During the
nine-month period
ended February
23, 2025,
cash provided
by operations
was $2,307 million
compared to
$2,439 million
in the
same period
last year.
The $132
million decrease
was primarily
driven by
a $123
million change
in restructuring,
impairment,
and other exit (recoveries) costs and a $38 million decrease in net earnings
excluding the impact of the divestiture in fiscal 2025.
Cash
used
by
investing
activities
during
the
nine-month
period
ended
February
23,
2025,
was
$1,579 million
compared
to
$508 million
for the
same period
in fiscal
- In
the third
quarter of
fiscal 2025
,
we acquired
Whitebridge
Pet Brands
for
$1,410
million cash,
net of
cash acquired.
During the
third quarter
of fiscal
2025, we
completed the
sale of
our Canada
yogurt business
for
$242 million cash.
In addition, we
spent $405 million
on purchases of
land, buildings, and
equipment in the
nine-month period ended
February 23, 2025, compared to $486 million in the same period last year.
Cash
used
by
financing
activities
during
the
nine-month
period
ended
February
23,
2025,
was
$610
million
compared
to
$1,928 million in the
same period in
fiscal 2024. We
paid $902 million for
purchases of common
stock for treasury
in the nine-month
period
ended
February
23,
2025,
compared
to $1,602
million
in the
same period
in fiscal
We
had
$1,397 million
of
net debt
issuances in the nine-month period ended
February 23, 2025, compared to $754 million of net debt
issuances in the same period a year
ago. In
addition, we paid
$1,008 million of
dividends in the
nine-month period
ended February 23,
2025, compared
to $1,028 million
in the same period last year.
As
of
February
23,
2025,
we
had
$404 million
of
cash
and
cash
equivalents
in
foreign
jurisdictions. In
anticipation
of
repatriating
funds
from
foreign
jurisdictions,
we
record
local
country
withholding
taxes
on
our
international
earnings,
as
applicable.
We
may
repatriate our
cash and
cash equivalents
held by
our foreign
subsidiaries without
such funds
being subject
to further
U.S. income
tax
liability. Earnings
prior to fiscal 2018 from our foreign subsidiaries remain permanently reinvested in
those jurisdictions.
32
The following table details the fee-paid committed and uncommitted credit
lines we had available as of February 23, 2025:
In Billions
Facility
Amount
Borrowed
Amount
Committed credit facility expiring October 2029
$
2.7
$
Uncommitted credit facilities
0.7
Total committed
and uncommitted credit facilities
$
3.4
$
To ensure availability
of funds, we maintain bank credit lines and have commercial paper programs
available to us in the United States
and Europe.
Certain
of
our
long-term
debt
agreements,
our
credit
facilities,
and
our
noncontrolling
interests
contain
restrictive
covenants.
As
of
February 23, 2025, we were in compliance with all of these covenants.
We
have $1,941
million of
long-term debt
maturing in
the next
12 months
that is
classified as
current, including
$800 million
of 4.0
percent fixed-rate notes
due April 17,
2025, €500 million
of 0.125 percent
fixed-rate notes due
November 15,
2025, and €600
million
of 0.45
percent fixed-rate
notes due
January 15, 2026.
We
believe that
cash flows
from operations,
together with
available short-
and
long-term debt financing, will be adequate to meet our liquidity and capital needs
for at least the next 12 months.
The
third-party
holder
of
the
General
Mills
Cereals,
LLC
(GMC)
Class A
Interests
receives
quarterly
preferred
distributions
from
available net
income based
on the application
of a
floating preferred
return rate
to the
holder’s capital
account balance
established in
the most recent mark-to-market valuation
(currently $252 million). On June 1, 2024,
the floating preferred return rate on GMC’s
Class
A Interests was reset to the
sum of the three-month Term
SOFR plus 261 basis points.
The preferred return rate is adjusted
every three
years through a negotiated agreement with the Class A Interest holder
or through a remarketing auction.
We
have an option
to purchase the
Class A Interests for
consideration equal to
the then current
capital account value,
plus any unpaid
preferred return
and the
prescribed make-whole
amount. If
we purchase
these interests,
any change
in the
third-party holder’s
capital
account
from
its
original
value
will
be
charged
directly
to
retained
earnings
and
will
increase
or
decrease
the
net
earnings
used
to
calculate EPS in that period.
CRITICAL ACCOUNTING ESTIMATES
Our significant accounting policies are described in Note 2
to the Consolidated Financial Statements included in
our Annual Report on
Form
10-K for
the fiscal
year ended
May 26,
- The
accounting policies
used in
preparing our
interim fiscal
2025 Consolidated
Financial
Statements
are
the
same
as
those
described
in
our
Form
10-K.
Please
refer
to
Note
1
to
the
Consolidated
Financial
Statements in Part I, Item 1 of this report for additional information.
Our
critical
accounting
estimates
are
those
that
have
meaningful
impact
on
the
reporting
of
our
financial
condition
and
results
of
operations.
These estimates
include
our accounting
for revenue
recognition,
valuation of
long-lived
assets, intangible
assets, income
taxes,
and
defined
benefit
pension,
other
postretirement
benefit,
and
postemployment
benefit
plans.
The
assumptions
and
methodologies
used in
the determination
of those
estimates as
of February
23, 2025,
are the
same as
those described
in our
Annual
Report on Form 10-K for the fiscal year ended May 26, 2024.
Our
annual
goodwill
and
indefinite-lived
intangible
assets
impairment
test
was
performed
on
the
first
day
of
the
second
quarter
of
fiscal
2025,
and
we
determined
there
was
no
impairment
of
our
intangible
assets
as
their
related
fair
values
were
substantially
in
excess of the
carrying values,
except for
the
Uncle Toby’s
brand intangible
asset. In addition,
while having
significant coverage
as of
our
fiscal
2025
assessment
date,
the
Progresso
,
Nudges,
True
Chews,
and
Kitano
brand
intangible
assets
had
risk
of
decreasing
coverage. We will continue
to monitor these businesses for potential impairment.
RECENTLY
ISSUED ACCOUNTING PRONOUNCEMENTS
In November 2024, the Financial Accounting
Standards Board (FASB
)
issued Accounting Standards Update (ASU)
2024-03 requiring
additional income
statement disclosures.
The ASU
requires the
disaggregation
of specific
categories of
expenses underlying
the line
items presented
on the
income statement.
Additionally,
the ASU
requires enhanced
disclosure of
selling expenses.
The requirements
of the ASU are effective for annual periods beginning
after December 15, 2026, and interim periods within fiscal years
beginning after
December
15,
For
us,
annual
reporting
requirements
will
be
effective
for
our
fiscal
2028
Form
10-K
and
interim
reporting
requirements will be
effective beginning
with our first
quarter of fiscal
- Early adoption
is permitted and
the amendments
should
be applied on a prospective
basis. Retrospective application is permitted.
We are
in the process of analyzing
the impact of the ASU on
our related disclosures.
33
In March 2024,
the Securities and
Exchange Commission
(SEC) issued final
rules on the
enhancement and standardization
of climate
related disclosures. The rules require
disclosure of, among other things:
material climate-related risks; activities
to mitigate or adapt
to
such
risks;
governance
and
management
of
such
risks;
and
material
greenhouse
gas
(GHG)
emissions
from
operations
owned
or
controlled
(Scope
and/or
indirect
emissions
from
purchased
energy
consumed
in
operations
(Scope
2).
Additionally,
the
rules
require disclosure
in the
notes to
the financial
statements of
the effects
of severe
weather events
and other
natural conditions,
subject
to
certain
materiality
thresholds.
The
SEC
has
issued
a
stay
on
the
final
rules
due
to
litigation
and
the
effective
date
is
delayed
indefinitely. We
are in the process of analyzing the impact of the rules on our disclosures.
In
December
2023,
the
FASB
issued
ASU
2023-09
requiring
enhanced
income
tax
disclosures.
The
ASU
requires
disclosure
of
specific
categories
and
disaggregation
of
information
in
the
rate
reconciliation
table.
The
ASU
also
requires
disclosure
of
disaggregated
information
related
to
income
taxes
paid,
income
or
loss
from
continuing
operations
before
income
tax
expense
or
benefit, and
income tax
expense or benefit
from continuing
operations. The
requirements of
the ASU are
effective for
annual periods
beginning after December 15, 2024,
which for us is fiscal 2026.
Early adoption is permitted
and the amendments should be
applied on
a prospective
basis. Retrospective
application is
permitted. We
are in
the process
of analyzing
the impact
of the
ASU on
our related
disclosures.
In
November
2023,
the
FASB
issued
ASU
2023-07
requiring
enhanced
segment
disclosures.
The
ASU
requires
disclosure
of
significant
segment
expenses
regularly
provided
to
the
chief
operating
decision
maker
(CODM)
included
within
segment
operating
profit
or
loss.
Additionally,
the
ASU
requires
a
description
of
how
the
CODM
utilizes
segment
operating
profit
or
loss
to
assess
segment performance.
The requirements
of the
ASU are effective
for annual
periods beginning
after December
15, 2023,
and interim
periods within
fiscal years
beginning after
December 15,
- For
us, annual
reporting requirements
will be
effective for
our fiscal
2025 Form 10-K
and interim reporting requirements
will be effective
beginning with our first
quarter of fiscal
- Early adoption
is
permitted and retrospective application
is required for all
periods presented. We
are in the process
of analyzing the impact
of the ASU
on our related disclosures.
NON-GAAP MEASURES
We
have
included
in
this
report
measures
of
financial
performance
that
are not
defined
by
GAAP.
We
believe
that
these
measures
provide useful information to investors, and include these measures in
other communications to investors.
For each
of these
non-GAAP financial
measures, we
are providing
below a
reconciliation of
the differences
between the
non-GAAP
measure and the most
directly comparable GAAP measure,
an explanation of why
we believe the non-GAAP
measure provides useful
information to
investors, and
any additional
material purposes
for which
our management
or Board
of Directors
uses the
non-GAAP
measure. These non-GAAP measures should be viewed in addition to, and not
in lieu of, the comparable GAAP measure.
Significant Items Impacting Comparability
Several
measures
below
are
presented
on
an
adjusted
basis.
The
adjustments
are
either
items
resulting
from
infrequently
occurring
events or items that, in management’s
judgment, significantly affect the year-to-year
assessment of operating results.
The following are descriptions of significant items impacting comparability
of our results.
Divestiture gain
Divestiture gain
related to
the sale of
our Canada
yogurt business
in fiscal
- Please
refer to
Note 2
to the
Consolidated Financial
Statements in Part I, Item 1 of this report.
Transaction costs
Fiscal 2025
transaction costs
related to
the definitive
agreements to
sell our
North American
yogurt businesses
and the
Whitebridge
Pet
Brands
acquisition.
Immaterial
transaction
costs
incurred
in
fiscal
Please
refer
to
Note
2
to
the
Consolidated
Financial
Statements in Part I, Item 1 of this report.
Mark-to-market effects
Net mark-to-market
valuation of
certain commodity
positions recognized
in unallocated
corporate items.
Please refer to
Note 6 to
the
Consolidated Financial Statements in Part I, Item 1 of this report.
Acquisition integration costs
Integration
costs related
to the
Whitebridge
Pet Brands
acquisition and
the acquisition
of a
pet food
business in
Europe
recorded
in
fiscal 2025. In addition,
integration costs primarily resulting
from the acquisition of
TNT Crust recorded in fiscal 2024.
Please refer to
Note 2 to the Consolidated Financial Statements in Part I, Item 1 of this report.
34
Investment activity, net
Valuation
adjustments of certain corporate investments in fiscal 2025 and fiscal 2024.
Restructuring (recoveries) charges and project-related
costs
Restructuring
(recoveries)
charges
and
project-related
costs related
to
previously
announced
restructuring
actions
recorded
in
fiscal
2025 and fiscal 2024. Please refer to Note 3 to the Consolidated Financial
Statements in Part I, Item 1 of this report.
Goodwill impairment
Non-cash
goodwill
impairment
charge
related
to
our
Latin
America
reporting
unit
in
fiscal
Please
refer
to
Note
4
to
the
Consolidated Financial Statements in Part I, Item 1 of this report.
Product recall, net
Costs related to the fiscal 2023 voluntary recall of certain international
Häagen-Dazs
ice cream products,
net of recoveries.
CPW asset impairment
Our share of impairment charges related to certain long-lived
assets recorded in fiscal 2025.
Organic Net Sales Growth Rates
We
provide organic
net sales
growth rates
for our
consolidated net
sales and
segment net
sales. This
measure is
used in
reporting to
our
Board
of
Directors
and
executive
management
and
as
a
component
of
the
measurement
of
our
performance
for
incentive
compensation purposes.
We
believe that
organic net
sales growth
rates provide
useful information
to investors
because they
provide
transparency
to
underlying
performance
in
our
net
sales
by
excluding
the
effect
that
foreign
currency
exchange
rate
fluctuations,
acquisitions, divestitures,
and a 53
rd
week, when applicable,
have on year-to-year comparability.
A reconciliation of
these measures to
reported net
sales growth
rates, the
relevant GAAP
measures, are
included in
our Consolidated
Results of
Operations and
Results of
Segment Operations discussions in the MD&A above.
35
Adjusted Operating Profit as a Percent of Net Sales (Adjusted Operating
Profit Margin)
We believe
this measure provides useful information
to investors because it is important
for assessing our operating profit margin
on a
comparable basis.
Our adjusted operating profit margins are calculated as follows:
Quarter Ended
Feb. 23, 2025
Feb. 25, 2024
In Millions
Value
Percent of
Net Sales
Value
Percent of
Net Sales
Operating profit as reported
$
891.4
18.4
%
$
910.7
17.9
%
Divestiture gain
(95.9)
(2.0)
%
%
Transaction costs
24.0
0.5
%
%
Mark-to-market effects
(23.2)
(0.5)
%
25.7
0.5
%
Acquisition integration costs
3.3
0.1
%
%
Investment activity, net
1.7
%
2.7
0.1
%
Restructuring (recoveries) charges
(0.6)
%
5.9
0.1
%
Project-related costs
0.2
%
0.5
%
Product recall, net
%
(31.1)
(0.6)
%
Adjusted operating profit
$
800.8
16.5
%
$
914.5
17.9
%
Nine-Month Period Ended
Feb. 23, 2025
Feb. 25, 2024
In Millions
Value
Percent of
Net Sales
Value
Percent of
Net Sales
Operating profit as reported
$
2,800.8
18.8
%
$
2,652.5
17.5
%
Divestiture gain
(95.9)
(0.6)
%
%
Transaction costs
32.9
0.2
%
0.6
%
Mark-to-market effects
(23.8)
(0.2)
%
5.9
%
Acquisition integration costs
7.2
%
0.2
%
Investment activity, net
4.9
%
25.2
0.2
%
Restructuring charges
3.6
%
30.5
0.2
%
Project-related costs
0.4
%
1.6
%
Goodwill impairment
%
117.1
0.8
%
Product recall, net
%
(30.7)
(0.2)
%
Adjusted operating profit
$
2,730.1
18.3
%
$
2,802.9
18.5
%
Note: Tables
may not foot due to rounding.
For more information on the reconciling items, see the Significant Items Impacting Comparability section above.
36
Adjusted Operating Profit and Related Constant-currency Growth Rate
This measure is used in reporting
to our Board of Directors and
executive management and as a
component of the measurement of
our
performance for
incentive compensation purposes.
We
believe that
this measure provides
useful information
to investors because
it is
the
operating
profit
measure
we
use
to
evaluate
operating
profit
performance
on
a
comparable
year-to-year
basis.
Additionally,
the
measure
is
evaluated
on
a
constant-currency
basis
by
excluding
the
effect
that
foreign
currency
exchange
rate
fluctuations
have
on
year-to-year comparability given the volatility in foreign
currency exchange rates.
Our adjusted operating profit growth on a constant-currency basis is calculated
as follows:
Quarter Ended
Nine-Month Period Ended
Feb. 23, 2025
Feb. 25, 2024
Change
Feb. 23, 2025
Feb. 25, 2024
Change
Operating profit as reported
$
891.4
$
910.7
(2)
%
$
2,800.8
$
2,652.5
6
%
Divestiture gain
(95.9)
(95.9)
Transaction costs
24.0
32.9
0.6
Mark-to-market effects
(23.2)
25.7
(23.8)
5.9
Acquisition integration costs
3.3
7.2
0.2
Investment activity, net
1.7
2.7
4.9
25.2
Restructuring (recoveries) charges
(0.6)
5.9
3.6
30.5
Project-related costs
0.2
0.5
0.4
1.6
Goodwill impairment
117.1
Product recall, net
(31.1)
(30.7)
Adjusted operating profit
$
800.8
$
914.5
(12)
%
$
2,730.1
$
2,802.9
(3)
%
Foreign currency exchange impact
Flat
Flat
Adjusted operating profit growth,
on a constant-currency basis
(13)
%
(3)
%
Note: Table may not foot due to rounding.
For more information on the reconciling items, see the Significant Items Impacting Comparability section above.
Adjusted Diluted EPS and Related Constant-currency Growth Rate
This measure
is used in
reporting to
our Board of
Directors and executive
management. We
believe that
this measure provides
useful
information to
investors because it
is the profitability
measure we use
to evaluate earnings
performance on
a comparable year-to-year
basis.
The reconciliation of our GAAP measure, diluted EPS, to adjusted diluted
EPS and the related constant-currency growth rates follows:
Quarter Ended
Nine-Month Period Ended
Per Share Data
Feb. 23, 2025
Feb. 25, 2024
Change
Feb. 23, 2025
Feb. 25, 2024
Change
Diluted earnings per share, as reported
$
1.12
$
1.17
(4)
%
$
3.57
$
3.33
7
%
Divestiture gain
(0.15)
(0.15)
Transaction costs
0.03
0.04
Mark-to-market effects
(0.03)
0.04
(0.03)
0.01
Acquisition integration costs
0.01
Investment activity, net
0.01
0.01
0.03
CPW asset impairment
0.01
0.01
Restructuring charges
0.01
0.01
0.04
Goodwill impairment
0.14
Product recall, net
(0.04)
(0.04)
Adjusted diluted earnings per share
$
1.00
$
1.17
(15)
%
$
3.47
$
3.51
(1)
%
Foreign currency exchange impact
1
pt
Flat
Adjusted diluted earnings per share
growth, on a constant-currency basis
(15)
%
(1)
%
Note: Table may not foot due to rounding.
For more information on the reconciling items, see the Significant Items Impacting Comparability section above.
37
See our reconciliation
below of the effective
income tax rate as
reported to the adjusted
effective income tax
rate for the tax
impact of
each item affecting comparability.
Constant-currency After-tax Earnings from Joint Ventures
Growth Rates
We
believe that
this measure
provides useful
information to
investors because
it provides
transparency to
underlying performance
of
our joint
ventures by
excluding the
effect
that foreign
currency exchange
rate fluctuations
have on
year-to-year
comparability given
volatility in foreign currency exchange markets.
After-tax earnings from joint ventures growth rates on a constant-currency
basis are calculated as follows:
Percentage Change in
After-Tax
Earnings from Joint
Ventures
as Reported
Impact of Foreign
Currency
Exchange
Percentage Change in After-Tax
Earnings from Joint Ventures
on Constant-Currency Basis
Quarter Ended Feb. 23, 2025
(20)
%
(4)
pts
(16)
%
Nine-Month Period Ended Feb. 23, 2025
(3)
%
(2)
pts
(1)
%
Note: Table may not foot due to rounding.
Net Sales Growth Rates for Our Canada Operating Unit on Constant-currency
Basis
We
believe
that
this
measure
of
our
Canada
operating
unit
net
sales
provides
useful
information
to
investors
because
it
provides
transparency to
the underlying
performance for
the Canada operating
unit within our
North America
Retail segment
by excluding
the
effect
that
foreign
currency
exchange
rate
fluctuations
have
on
year-to-year
comparability
given
volatility
in
foreign
currency
exchange markets.
Net sales growth rates for our Canada operating unit on a constant-currency
basis are calculated as follows:
Percentage Change in
Net Sales
as Reported
Impact of Foreign
Currency
Exchange
Percentage Change in
Net Sales on Constant-
Currency Basis
Quarter Ended Feb. 23, 2025
(19)
%
(5)
pts
(14)
%
Nine-Month Period Ended Feb. 23, 2025
(7)
%
(3)
pts
(4)
%
Note: Table may not foot due to rounding.
Constant-currency Segment Operating Profit Growth Rates
We
believe that
this measure
provides useful
information to
investors because
it provides
transparency to
underlying performance
of
our
segments
by
excluding
the
effect
that
foreign
currency
exchange
rate
fluctuations
have
on
year-to-year
comparability
given
volatility in foreign currency exchange markets.
38
Our segments’ operating profit growth rates on a constant-currency
basis are calculated as follows:
Quarter Ended Feb. 23, 2025
Percentage Change in
Operating Profit
as Reported
Impact of Foreign
Currency
Exchange
Percentage Change in Operating
Profit on Constant-Currency
Basis
North America Retail
(14)
%
Flat
(14)
%
International
(1)
%
19
pts
(20)
%
North America Pet
(20)
%
Flat
(20)
%
North America Foodservice
1
%
Flat
1
%
Nine-Month Period Ended Feb. 23, 2025
Percentage Change in
Operating Profit
as Reported
Impact of Foreign
Currency
Exchange
Percentage Change in Operating
Profit on Constant-Currency
Basis
North America Retail
(6)
%
Flat
(6)
%
International
(39)
%
11
pts
(50)
%
North America Pet
6
%
Flat
6
%
North America Foodservice
15
%
Flat
15
%
Note: Tables may not foot due to rounding.
Adjusted Effective Income Tax
Rates
We
believe
this
measure
provides
useful
information
to
investors
because
it
presents
the
adjusted
effective
income
tax
rate
on
a
comparable year-to-year basis.
Adjusted effective income tax rates are calculated as follows:
Quarter Ended
Nine-Month Period Ended
Feb. 23, 2025
Feb. 25, 2024
Feb. 23, 2025
Feb. 25, 2024
In Millions
(Except Per Share Data)
Pretax
Earnings
(a)
Income
Taxes
Pretax
Earnings
(a)
Income
Taxes
Pretax
Earnings
(a)
Income
Taxes
Pretax
Earnings
(a)
Income
Taxes
As reported
$
769.0
$
152.4
$
807.6
$
149.3
$
2,457.9
$
504.6
$
2,351.7
$
458.5
Divestiture gain
(95.9)
(11.1)
(95.9)
(11.1)
Transaction costs
24.0
5.6
32.9
7.6
0.6
Mark-to-market effects
(23.2)
(5.4)
25.7
6.0
(23.8)
(5.5)
5.9
1.4
Acquisition integration costs
3.3
0.7
7.2
1.6
0.2
0.1
Investment activity, net
1.7
0.4
2.7
2.2
4.9
1.1
25.2
7.4
Restructuring (recoveries) charges
(0.6)
(0.1)
5.9
(1.2)
3.6
0.9
30.5
8.0
Project-related costs
0.2
0.5
0.1
0.4
0.1
1.6
0.5
Goodwill impairment
117.1
34.7
Product recall, net
(31.1)
(7.2)
(30.7)
(7.1)
As adjusted
$
678.4
$
142.5
$
811.3
$
149.4
$
2,387.2
$
499.4
$
2,502.1
$
503.6
Effective tax rate:
As reported
19.8%
18.5%
20.5%
19.5%
As adjusted
21.0%
18.4%
20.9%
20.1%
Sum of adjustments to income taxes
$
(9.9)
$
0.1
$
(5.2)
$
45.1
Average number
of common
shares - diluted EPS
555.0
572.8
559.8
582.5
Impact of income tax adjustments
on adjusted diluted EPS
$
0.02
$
$
0.01
$
(0.08)
Note: Table may not foot due to rounding.
(a)
Earnings before income taxes and after-tax earnings from joint ventures.
For more information on the reconciling items, please see the Significant Items Impacting Comparability section above.
39
Glossary
AOCI
. Accumulated other comprehensive income (loss).
Adjusted diluted EPS.
Diluted EPS adjusted for certain items affecting year-to-year
comparability.
Adjusted operating profit.
Operating profit adjusted for certain items affecting year-to-year
comparability.
Adjusted operating profit
margin.
Operating profit adjusted
for certain items
affecting year-over-year
comparability,
divided by net
sales.
Constant currency.
Financial results
translated to
United States
dollars using
constant foreign
currency exchange
rates based
on the
rates
in
effect
for
the
comparable
prior-year
period.
To
present
this
information,
current
period
results
for
entities
reporting
in
currencies other
than United
States dollars
are translated
into United
States dollars
at the
average exchange
rates in
effect during
the
corresponding
period
of
the
prior
fiscal
year,
rather
than
the
actual
average
exchange
rates
in
effect
during
the
current
fiscal
year.
Therefore,
the
foreign
currency
impact
is
equal
to
current
year
results
in
local
currencies
multiplied
by
the
change
in
the
average
foreign currency exchange rate between the current fiscal period and the corresponding
period of the prior fiscal year.
Core working capital.
Accounts receivable plus inventories less accounts payable.
Derivatives.
Financial instruments such
as futures, swaps,
options, and forward
contracts that we
use to manage
our risk arising
from
changes in commodity prices, interest rates, foreign exchange rates, and stock
prices.
Euribor.
Euro Interbank Offered Rate.
Fair value
hierarchy.
For purposes
of fair
value measurement,
we categorize
assets and
liabilities into
one of
three levels
based on
the assumptions
(inputs) used
in valuing
the asset or
liability.
Level 1 provides
the most reliable
measure of
fair value, while
Level 3
generally requires significant management judgment. The three levels are
defined as follows:
Level 1:
Unadjusted quoted prices in active markets for identical assets or liabilities.
Level 2:
Observable inputs other than quoted prices included in
Level 1, such as quoted prices for similar assets or liabilities in
active markets or quoted prices for identical assets or liabilities in inactive markets.
Level 3:
Unobservable inputs reflecting management’s
assumptions about the inputs used in pricing the asset or liability.
Free cash flow.
Net cash provided by operating activities less purchases of land, buildings, and equipment.
Generally Accepted
Accounting Principles
(GAAP).
Guidelines, procedures,
and practices
that we
are required
to use in
recording
and reporting accounting information in our financial statements.
Goodwill.
The difference
between the purchase
price of acquired
companies plus the fair
value of any noncontrolling
and redeemable
interests and the related fair values of net assets acquired.
Gross margin.
Net sales less cost of sales.
Hedge accounting.
Accounting for qualifying
hedges that allows changes in
a hedging instrument’s
fair value to offset
corresponding
changes in
the hedged
item in
the same
reporting period.
Hedge accounting
is permitted
for certain
hedging instruments
and hedged
items
only
if
the
hedging
relationship
is
highly
effective,
and
only
prospectively
from
the
date
a
hedging
relationship
is
formally
documented.
Holistic Margin Management
(HMM).
Company-wide initiative to
use productivity savings, mix
management, and price realization
to offset input cost inflation, protect margins,
and generate funds to reinvest in sales-generating activities.
Interest
bearing
instruments.
Notes
payable,
long-term
debt,
including
current
portion,
cash
and
cash
equivalents,
and
certain
interest bearing investments classified within prepaid expenses and other
current assets and other assets.
Mark-to-market.
The act of determining a value for
financial instruments, commodity contracts, and
related assets or liabilities based
on the current market price for that item.
40
Net
mark-to-market
valuation of
certain
commodity
positions.
Realized
and
unrealized
gains
and
losses on
derivative
contracts
that will be allocated to segment operating profit when the exposure we are hedging
affects earnings.
Net price realization.
The impact of list and promoted price changes, net of trade and other price
promotion costs.
Net realizable
value.
The estimated
selling price
in the
ordinary course
of business,
less reasonably
predictable costs
of completion,
disposal, and transportation.
Noncontrolling interests.
Interests of subsidiaries held by third parties.
Notional
amount.
The
amount
of
a
position
or
an
agreed
upon
amount
in
a
derivative
contract
on
which
the
value
of
financial
instruments are calculated.
OCI.
Other Comprehensive Income (Loss).
Organic net sales growth
. Net sales growth adjusted
for foreign currency translation,
acquisitions, divestitures and a
53
rd
fiscal week,
when applicable.
Project-related costs.
Costs incurred related to our restructuring initiatives not included in restructuring
charges.
Reporting unit
. An operating segment or a business one level below an operating
segment.
SOFR.
Secured Overnight Financing Rate.
Strategic
Revenue
Management
(SRM).
A
company-wide
capability
focused
on
generating
sustainable
benefits
from
net
price
realization
and
mix
by
identifying
and
executing
against
specific
opportunities
to
apply
tools
including
pricing,
sizing,
mix
management, and promotion optimization across each of our businesses.
Supply chain
input costs.
Costs incurred
to produce
and deliver
product,
including costs
for
ingredients
and
conversion, inventory
management, logistics, and warehousing.
Translation
adjustments.
The impact
of the conversion
of our foreign
affiliates’ financial
statements to United
States dollars
for the
purpose of consolidating our financial statements.
Working capital
. Current assets and current liabilities, all as of the last day of our fiscal year.
41
RELEVANT
TO FORWARD
-LOOKING INFORMATION
FOR THE PURPOSE OF “SAFE
HARBOR” PROVISIONS OF THE PRIVATE
SECURITIES LITIGATION
REFORM ACT OF 1995
This report
contains or
incorporates by
reference
Form 10-K for
Item 3.
Quantitative and Qualitative Disclosures About Market Risk.
The
estimated
maximum
potential
value-at-risk
arising
from
a
one-day
loss
in
fair
value
for
our
interest
rate,
foreign
exchange,
commodity, and equity
market-risk-sensitive instruments outstanding as of February 23, 2025,
was as follows:
In Millions
One-day Risk
of Loss
Change During
Nine-Month
Period Ended
Feb. 23, 2025
Analysis of Change
Interest rate instruments
$
43
$
(11)
Decrease in interest rates
Foreign currency instruments
39
9
Increase in portfolio basis
Commodity instruments
4
(1)
Immaterial
Equity instruments
2
Immaterial
For additional information, see Item 7A of Part II of our Annual Report on Form 10-K
for the fiscal year ended May 26, 2024.
42
Item 4.
Controls and Procedures.
We,
under the
supervision and
with the
participation of
our management,
including our
Chief Executive
Officer and
Chief Financial
Officer,
have
evaluated
the
effectiveness
of
the design
and
operation
of
our
disclosure
controls
and
procedures
(as
defined
in
Rule
13a-15(e)
under
the
Securities
Exchange
Act
of
1934).
Based
on
our
evaluation,
our
Chief
Executive
Officer
and
Chief
Financial
Officer have concluded
that, as of February
23, 2025, our disclosure
controls and procedures were
effective to ensure
that information
required to
be disclosed
by us
in reports
that we file
or submit
under the
Securities Exchange
Act of
1934 is (1)
recorded, processed,
summarized,
and
reported
within
the
time
periods
specified
in
Securities
and
Exchange
Commission
rules
and
forms,
and
(2)
accumulated and
communicated to
our management,
including our
Chief Executive
Officer and
Chief Financial
Officer,
in a
manner
that allows timely decisions regarding required disclosure.
There were no changes in our internal
control over financial reporting (as defined
in Rule 13a-15(f) under the Securities Exchange
Act
of 1934) during the quarter
ended February 23, 2025, that
materially affected, or are
reasonably likely to materially
affect, our internal
control over financial reporting.
PART
II.
OTHER INFORMATION
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds.
The
following
table
sets forth
information
with
respect
to
shares
of
our
common
stock
that we
purchased
during
the quarter
ended
February 23, 2025:
Period
Total
Number
of Shares
Purchased (a)
Average
Price Paid
Per Share
Total
Number of Shares
Purchased as Part of a Publicly
Announced Program (b)
Maximum Number of Shares
that may yet be Purchased
Under the Program (b)
November 25, 2024 -
December 29, 2024
1,910,552
$
66.25
1,910,552
45,034,753
December 30, 2024 -
January 26, 2025
2,254,605
61.24
2,254,605
42,780,148
January 27, 2025 -
February 23, 2025
644,987
61.64
644,987
42,135,161
Total
4,810,144
$
63.28
4,810,144
42,135,161
(a)
The total number
of shares purchased
includes shares of
common stock withheld
for the payment
of withholding taxes
upon the distribution
of
deferred option units.
(b)
On June
27, 2022,
our Board
of Directors approved
an authorization
for the
repurchase of
up to
100,000,000 shares of
our common stock
and
terminated the
prior authorization.
Purchases can
be made
in the
open market
or in
privately negotiated
transactions, including
the use
of call
options
and
other
derivative
instruments,
Rule
10b5-1
trading
plans,
and
accelerated
repurchase
programs.
The
Board
did
not
specify
an
expiration date for the authorization.
Item 5.
Other Information.
During
the
fiscal
quarter
ended
February
23,
2025,
no
director
or
officer
of
the
Company
adopted
or
terminated
a
“Rule
10b5-1
trading arrangement” or “
non-Rule
10b5-1
trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.
43
PART
II. OTHER INFORMATION
Item 6.
Exhibits.
31.1
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1
Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2
Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101
Financial Statements
from the
Quarterly Report
on Form
10-Q of
the Company
for the
quarter ended
February 23,
2025,
formatted
in
Inline
Extensible
Business
Reporting
Language:
(i)
Consolidated
Statements
of
Earnings;
(ii)
Consolidated
Statements
of
Comprehensive
Income,
(iii)
Consolidated
Balance
Sheets;
(iv)
Consolidated
Statements of
Total
Equity; (v)
Consolidated Statements
of Cash
Flows; and
(vi) Notes
to Consolidated
Financial
Statements.
104
Cover Page, formatted in Inline Extensible Business Reporting Language
and contained in Exhibit 101.
44