Market Overview

General Mills CEO Says Q4 Beat 'Built On The Back Of Three Good Quarters'

General Mills CEO Says Q4 Beat 'Built On The Back Of Three Good Quarters'

Food maker General Mills, Inc. (NYSE: GIS) CEO Jeff Harmening was on the receiving end of praise from CNBC's Jim Cramer after the company's earnings report showed it held or gained market share across key categories in the U.S. and accelerated organic sales — all without experiencing any supply chain disruptions.

Continuation Of Momentum: General Mills reported fiscal fourth quarter and full-year results Wednesday, and the company's momentum can be traced back prior to the start of the COVID-19 pandemic, Harmening told Cramer Wednesday evening on "Mad Money.

In the fourth quarter, General Mills' business accelerated globally, the CEO said. In Europe, it held or gained ground in market share in every category, he said. 

"It was a really good quarter built on the back of three good quarters before that."

Underappreciated Balance Sheet: General Mills set out a target of achieving a net debt to EBITDA ratio of 3.5 times by the end 2020, and the company outperformed by lowering net debt to EBITDA to 3.2 times, Harmening said.

This brings the company much closer to returning to normalizing capital allocation and when the ratio drops to three times, the company will prioritize a dividend increase, he said. 

"Yes, our earnings were good but our cash flow was even better than our earnings and we are really proud of that."

Blue Buffalo Update: General Mills' 2018 acquisition of pet food company Blue Buffalo is "everything we thought it to be," Harmening said.

The division has now shown double-digit growth two straight years, highlighted by 18% organic sales growth in the most recent year.

The momentum can be attributed to "people treating their pets like family," and General Mills has expertise in providing food to families for 150 years, Harmening said.

GIS Price Action: General Mills shares were up 1.97% at $61.61 at the time of publication. 

Related Links:

Consumers Demand More Savings As Food Prices Skyrocket

Jim Cramer Recommends Buying Albertsons IPO Below $25


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