General Mills has reported results for the fourth quarter and fiscal year that ended May 31, 2020. The company reported that net sales increased 5% to $17.6 billion, including two points of growth from an extra week of results in this year’s fourth quarter and a one-point headwind from unfavorable foreign currency exchange. Organic net sales increased 4%, reflecting positive organic pound volume and favorable organic net price realization and mix. The company estimated that changes in consumer behavior resulting from COVID-19 increased full-year net sales growth by approximately three percentage points. Operating profit of $3 billion increased 17% from the prior year.
The COVID-19 pandemic had a profound impact on consumer demand across the company’s major markets, including driving an unprecedented increase in demand for food at home and a corresponding decrease in away-from-home food demand resulting from efforts to reduce virus transmission. The company estimated that at-home food represented approximately 85% of its pre-pandemic worldwide net sales, and away-from-home food represented the remaining 15%.
In the fourth quarter of fiscal 2020, elevated at-home food demand accelerated net sales growth in the North America retail segment, where a significant share of net sales comes from categories that were most impacted by at-home eating, including meals, baking, and cereal. The impact of elevated at-home demand was less pronounced in the Europe and Australia segment, reflecting its lower proportion of net sales in those categories. The pet segment experienced increased demand early in the fourth quarter from stock-up purchasing, which partially unwound by the end of the quarter. Lower away-from-home food demand reduced growth for the Asia and Latin America and convenience stores and foodservice segments.
“I’m proud of the way our organization has remained focused on serving the needs of our consumers and communities while protecting the health and safety of our employees throughout the COVID-19 pandemic,” said Jeff Harmening, General Mills chairman and CEO, in a press release. “Amid significant challenge and change in the world around us, General Mills adapted and executed in fiscal 2020 to deliver outstanding financial results while fulfilling our purpose of making food the world loves. We’ve demonstrated extraordinary agility to meet the unprecedented increase in demand for food at home and to win across our categories.”