Benzinga | Jun 30, 2021 08:32AM EDT

General Mills Shares Drop Premarket After Company Flags Inflation Worries For FY22

* General Mills Inc (NYSE:GIS) reported fourth-quarter FY21 sales of $4.5 billion, down 10% year-on-year, beating the consensus estimate of $4.36 billion.

* Sales in the North American retail segment decreased 17% to $2.64 billion, primarily reflecting the comparison against the surge in at-home food demand at the outset of the pandemic as well as a 6-point headwind from an extra week of results in last year's fourth quarter.

* Sales for the Europe & Australia segment increased 2% to $539 million.

* The gross margin was 35% of net sales, down 20 basis points Y/Y, driven by higher input costs.

* Operating profit of $548 million was down 34% Y/Y.

* The operating margin was 12.1%, down 440 basis points Y/Y.

* Adjusted EPS of $0.91 was down 17.3% Y/Y, beating the consensus of $0.84.

* Cash and equivalents totaled $1.5 billion at the end of the fourth quarter.

* Guidance: General Mills sees organic net sales for FY22 to decline 1 to 3%.

* It expects FY22 EPS to range between flat and down 2% from the base of $3.79 earned in FY21, versus a consensus of $3.71.

* General Mills expects the largest factors impacting its performance in fiscal 2022 of a relative balance of at-home versus away-from-home consumer food demand and the inflationary cost environment.

* Price action: GIS shares are trading lower by 1.33% at $59.23 premarket on the last check Wednesday.