General Mills reported results for the fourth quarter and full fiscal year ended May 29, 2016.
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Fiscal 2016 net sales decreased 6 percent to $16.6 billion. Pound volume reduced net sales growth by 3 percentage points, and net price realization and mix contributed 1 point of net sales growth. Foreign currency exchange effects reduced net sales growth by 4 points.
On a constant-currency basis, net sales decreased 2 percent. The impact of one less week compared to fiscal 2015 and the net impact of acquisitions and divestitures subtracted 2 points of growth. Gross margin increased 150 basis points, reflecting the benefit of cost savings initiatives more than offsetting 2 percent input cost inflation.
Adjusted gross margin, which excludes mark-to-market effects and certain other items affecting comparability, increased 90 basis points.
Selling, general, and administrative expenses decreased 6 percent due to an 8 percent decrease in advertising and media expense and savings from our cost-reduction initiatives. Total segment operating profit declined 1 percent to $3.0 billion. On a constant-currency basis, total segment operating profit increased 1 percent.
Adjusted operating profit margin increased 90 basis points to 16.8 percent of net sales. Restructuring and project-related charges totaled $287 million, including $136 million recorded in cost of sales.
The company recorded a gain of $148 million from divestitures, reflecting the divestiture of the Green Giant business in November 2015.
Fiscal 2016 net earnings attributable to General Mills totaled $1.7 billion and diluted EPS totaled $2.77. Adjusted diluted EPS totaled $2.92 in fiscal 2016, up 2 percent from $2.86 earned last year. On a constant-currency basis, adjusted diluted EPS increased 5 percent.
Fourth quarter results
Fourth-quarter net sales declined 9 percent to $3.9 billion. Pound volume reduced net sales growth by 7 percentage points, and net price realization and mix reduced net sales growth by 1 point. Foreign currency exchange effects reduced net sales growth by 1 point.
On a constant-currency basis, net sales decreased 8 percent. The impact of one less week and the net impact of acquisitions and divestitures subtracted 9 points of growth. Gross margin declined 20 basis points, reflecting higher input cost inflation in the quarter.
Adjusted gross margin declined 130 basis points. Operating profit increased 26 percent to $532 million. Total segment operating profit decreased 18 percent to $654 million.
Net earnings attributable to General Mills totaled $380 million and diluted EPS totaled 62 cents compared to 30 cents a year ago.
Adjusted diluted EPS totaled 66 cents for the fourth quarter, down 12 percent from 75 cents a year ago. On a constant-currency basis, fourth-quarter adjusted diluted EPS declined 11 percent. ■