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General Mills Inc. (NYSE:GIS)

This company has been moved to the archive! The financial data has not been updated since December 18, 2019.

Common-Size Income Statement

General Mills Inc., common-size consolidated income statement

Microsoft Excel
12 months ended: May 26, 2019 May 27, 2018 May 28, 2017 May 29, 2016 May 31, 2015 May 25, 2014
Net sales 100.00 100.00 100.00 100.00 100.00 100.00
Cost of sales -65.87 -65.52 -64.38 -64.80 -66.26 -64.43
Gross margin 34.13% 34.48% 35.62% 35.20% 33.74% 35.57%
Selling, general, and administrative expenses -17.41 -17.49 -17.93 -18.83 -18.88 -19.40
Divestitures gain (loss) -0.18 0.00 -0.09 0.89 0.00 0.37
Restructuring, impairment, and other exit costs -1.63 -1.05 -1.17 -0.91 -3.09 -0.02
Operating profit 14.92% 15.94% 16.43% 16.35% 11.78% 16.51%
Benefit plan non-service income 0.52 0.00 0.00 0.00 0.00 0.00
Interest expense, net of capitalized interest -3.13 -2.45 -1.93 -1.88 -1.86 -1.78
Interest income 0.03 0.07 0.04 0.05 0.07 0.09
Interest, net -3.09% -2.37% -1.89% -1.83% -1.79% -1.69%
Earnings before income taxes and after-tax earnings from joint ventures 12.34% 13.57% 14.54% 14.51% 9.99% 14.82%
Income taxes -2.18 -0.36 -4.19 -4.56 -3.33 -4.93
After-tax earnings from joint ventures 0.43 0.54 0.54 0.53 0.48 0.50
Net earnings, including earnings attributable to redeemable and noncontrolling interests 10.59% 13.74% 10.89% 10.49% 7.14% 10.39%
Net earnings attributable to redeemable and noncontrolling interests -0.20 -0.20 -0.28 -0.24 -0.22 -0.21
Net earnings attributable to General Mills 10.39% 13.54% 10.61% 10.25% 6.93% 10.19%

Based on: 10-K (reporting date: 2019-05-26), 10-K (reporting date: 2018-05-27), 10-K (reporting date: 2017-05-28), 10-K (reporting date: 2016-05-29), 10-K (reporting date: 2015-05-31), 10-K (reporting date: 2014-05-25).

The financial performance between 2014 and 2019 is characterized by relative stability in gross margins coupled with a consistent improvement in operational efficiency, though net profitability was influenced by volatile restructuring costs and fluctuating tax obligations.

Gross Profitability and Cost of Sales
Gross margins remained largely stable, fluctuating within a narrow range between 33.74% and 35.62%. A temporary contraction occurred in 2015, where the cost of sales rose to 66.26% of net sales, but margins recovered to 35.20% by 2016. The period ended with a slight downward trend in gross margin, settling at 34.13% in 2019.
Operating Expenses and Efficiency
A consistent downward trend is observed in selling, general, and administrative expenses, which decreased from 19.40% of net sales in 2014 to 17.41% in 2019. This suggests a steady improvement in operational leverage and cost management. However, operating profit was periodically impacted by restructuring, impairment, and other exit costs, which peaked at 3.09% of net sales in 2015 and remained a recurring expense throughout the period.
Operating Profit Trends
Operating profit experienced a significant dip in 2015, falling to 11.78% of net sales, primarily due to elevated restructuring costs. While profitability rebounded to a peak of 16.43% in 2017, a gradual decline followed, resulting in an operating profit of 14.92% by 2019.
Financial Costs and Interest
Net interest expenses as a percentage of net sales showed a steady increase over the analyzed period. The net interest cost rose from 1.69% in 2014 to 3.09% in 2019, indicating an increasing burden of debt service relative to the revenue generated.
Net Earnings and Tax Impact
Net earnings attributable to General Mills exhibited volatility, ranging from a low of 6.93% in 2015 to a high of 13.54% in 2018. The spike in 2018 is notably linked to a sharp reduction in income taxes, which dropped to 0.36% of net sales that year. By 2019, net earnings normalized to 10.39%, returning to levels consistent with the 2014-2017 average.

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