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General Mills (0R1X) Risk Analysis

Public companies are required to disclose risks that can affect the business and impact the stock. These disclosures are known as “Risk Factors”. Companies disclose these risks in their yearly (Form 10-K), quarterly earnings (Form 10-Q), or “foreign private issuer” reports (Form 20-F). Risk factors show the challenges a company faces. Investors can consider the worst-case scenarios before making an investment. TipRanks’ Risk Analysis categorizes risks based on proprietary classification algorithms and machine learning. General Mills disclosed 22 risk factors in its most recent earnings report. General Mills reported the most risks in the “Finance & Corporate” category.

Risk Overview Q1, 2023

Source: the company's latest filing for the period ended Feb 26, 2023, filed Mar 23, 2023

Risk Distribution
22Risks
Sector Avg.Finance & CorporateTech & InnovationLegal & RegulatoryProductionAbility to SellMacro & Political
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Risk Change Over Time

General Mills disclosed risks per quarterNo. of Risks22Q3Q4Q12023Showing: Q1, 2023
Risks removedRisks addedRisks changedGeneral Mills Risk Factors
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Risk Highlights Q1, 2023

Main Risk Category
Finance & Corporate
With 6 Risks
Number of Disclosed Risks
22
No changes from last report
S&P 500 Average: 32
Recent Changes
0Risks added
0Risks removed
0Risks changed
Since Feb 2023
Number of Risk Changed
0
No changes from last report
S&P 500 Average: 1

Risk Word Cloud

we have a substantial amount of indebtedness, which could limit financing and other options and in some cases adversely affect our ability to pay dividends.substantial amount of indebtednessour failure to successfully integrate acquisitions into our existing operations could adversely affect our financial results.adversely affect our financial resultsvolatility in the market value of derivatives we use to manage exposures to fluctuations in commodity prices will cause volatility in our gross margins and net earnings.to manage exposures to fluctuationsdisruption of our supply chain could adversely affect our business.disruption of our supply chainour results may be negatively impacted if consumers do not maintain their favorable perception of our brands.favorable perception of our brandsvolatility in the securities markets, interest rates, and other factors could substantially increase our defined benefitpension,other postretirement benefit, and postemployment benefit costs.substantially increase our defined benefitpensiona change in the assumptions regarding the future performance of our businesses or a different weighted-average cost ofcapital used to value our reporting units or our indefinite-lived intangible assets could negatively affect our consolidated results of operations and net worth.our indefinite-lived intangible assetsa change in the assumptions regarding the future performance of our businesses or a different weighted-average cost ofcapital used to value our reporting units or our indefinite-lived intangible assets could negatively affect our consolidated results of operations and net worth.future performance of our businessesglobal capital and credit market issues could negatively affect our liquidity,increase our costs of borrowing, and disrupt the operations of our suppliers and customers.increase our costs of borrowinga change in the assumptions regarding the future performance of our businesses or a different weighted-average cost ofcapital used to value our reporting units or our indefinite-lived intangible assets could negatively affect our consolidated results of operations and net worth.weighted-average cost ofcapital

Risk Factors Full Breakdown - Total Risks 22

Accounting & Financial Operations2 | 9.1%
  • Accounting & Financial Operations - Risk 1
    We may be unable to maintain our profit margins in the face of a consolidating retail environment.

    There has been significant consolidation in the grocery industry, resulting in customers with increased purchasing power. In addition,large retail customers may seek to use their position to improve their profitability through improved efficiency, lower pricing,increased reliance on their own brand name products, increased emphasis on generic and other economy brands, and increasedpromotional programs. If we are unable to use our scale, marketing expertise, product innovation, knowledge of consumers’ needs,and category leadership positions to respond to these demands, our profitability and volume growth could be negatively impacted. Inaddition, the loss of any large customer could adversely affect our sales and profits. In fiscal 2022, Walmart accounted for 20 percentof our consolidated net sales and 28 percent of net sales of our North America Retail segment. For more information on significantcustomers, please see Note 8 to the Consolidated Financial Statements in Item 8 of this report.

  • Accounting & Financial Operations - Risk 2
    A change in the assumptions regarding the future performance of our businesses or a different weighted-average cost ofcapital used to value our reporting units or our indefinite-lived intangible assets could negatively affect our consolidated results of operations and net worth.

    As of May 29, 2022, we had $21.4 billion of goodwill and indefinite-lived intangible assets. Goodwill for each of our reporting unitsis tested for impairment annually and whenever events or changes in circumstances indicate that impairment may have occurred. Wecompare the carrying value of the reporting unit, including goodwill, to the fair value of the reporting unit. If the fair value of the reporting unit is less than the carrying value of the reporting unit, including goodwill, impairment has occurred. Our estimates of fairvalue are determined based on a discounted cash flow model. Growth rates for sales and profits are determined using inputs from ourlong-range planning process. We also make estimates of discount rates, perpetuity growth assumptions, market comparables, and otherfactors. If current expectations for growth rates for sales and profits are not met, or other market factors and macroeconomicconditions were to change, then our reporting units could become significantly impaired. While we currently believe that our goodwillis not impaired, different assumptions regarding the future performance of our businesses could result in significant impairment losses. We evaluate the useful lives of our intangible assets, primarily intangible assets associated with theBlue Buffalo,Pillsbury,Totino’s,Progresso,Old El Paso,Yoki,Häagen-Dazs, andAnnie’s brands, to determine if they are finite or indefinite-lived.Reaching a determination on useful life requires significant judgments and assumptions regarding the future effects of obsolescence,demand, competition, other economic factors (such as the stability of the industry, known technological advances, legislative actionthat results in an uncertain or changing regulatory environment, and expected changes in distribution channels), the level of requiredmaintenance expenditures, and the expected lives of other related groups of assets. Our indefinite-lived intangible assets are also tested for impairment annually and whenever events or changes in circumstancesindicate that impairment may have occurred. Our estimate of the fair value of the brands is based on a discounted cash flow modelusing inputs including projected revenues from our long-range plan, assumed royalty rates which could be payable if we did not ownthe brands, and a discount rate. If current expectations for growth rates for sales and margins are not met, or other market factors andmacroeconomic conditions were to change, then our indefinite-lived intangible assets could become significantly impaired.OurProgresso,Green Giant,EPIC, andUncle Toby’s brands had experienced declining business performance, and we continue tomonitor these businesses. For further information on goodwill and intangible assets, please refer to Note 6 to the Consolidated Financial Statements in Item 8 of this report.

Debt & Financing3 | 13.6%
Corporate Activity and Growth1 | 4.5%

See a full breakdown of risk according to category and subcategory. The list starts with the category with the most risk. Click on subcategories to read relevant extracts from the most recent report.

FAQ

What are “Risk Factors”?
Risk factors are any situations or occurrences that could make investing in a company risky. The Securities and Exchange Commission (SEC) requires that publicly traded companies disclose their most significant risk factors. This is so that potential investors can consider any risks before they make an investment. They also offer companies protection, as a company can use risk factors as liability protection. This could happen if a company underperforms and investors take legal action as a result. It is worth noting that smaller companies, that is those with a public float of under $75 million on the last business day, do not have to include risk factors in their 10-K and 10-Q forms, although some may choose to do so.
How do companies disclose their risk factors?
Publicly traded companies initially disclose their risk factors to the SEC through their S-1 filings as part of the IPO process. Additionally, companies must provide a complete list of risk factors in their Annual Reports (Form 10-K) or (Form 20-F) for “foreign private issuers”. Quarterly Reports also include a section on risk factors (Form 10-Q) where companies are only required to update any changes since the previous report. According to the SEC, risk factors should be reported concisely, logically and in “plain English” so investors can understand them.
How can I use TipRanks risk factors in my stock research?
Use the Risk Factors tab to get data about the risk factors of any company in which you are considering investing. You can easily see the most significant risks a company is facing. Additionally, you can find out which risk factors a company has added, removed or adjusted since its previous disclosure. You can also see how a company’s risk factors compare to others in its sector. Without reading company reports or participating in conference calls, you would most likely not have access to this sort of information, which is usually not included in press releases or other public announcements. A simplified analysis of risk factors is unique to TipRanks.
What are all the risk factor categories?
TipRanks has identified 6 major categories of risk factors and a number of subcategories for each. You can see how these categories are broken down in the list below. 1. Financial & Corporate Accounting & Financial Operations - risks related to accounting loss, value of intangible assets, financial statements, value of intangible assets, financial reporting, estimates, guidance, company profitability, dividends, fluctuating results. Share Price & Shareholder Rights – risks related to things that impact share prices and the rights of shareholders, including analyst ratings, major shareholder activity, trade volatility, liquidity of shares, anti-takeover provisions, international listing, dual listing. Debt & Financing – risks related to debt, funding, financing and interest rates, financial investments. Corporate Activity and Growth – risks related to restructuring, M&As, joint ventures, execution of corporate strategy, strategic alliances. 2. Legal & Regulatory Litigation and Legal Liabilities – risks related to litigation/ lawsuits against the company. Regulation – risks related to compliance, GDPR, and new legislation. Environmental / Social – risks related to environmental regulation and to data privacy. Taxation & Government Incentives – risks related to taxation and changes in government incentives. 3. Production Costs – risks related to costs of production including commodity prices, future contracts, inventory. Supply Chain – risks related to the company’s suppliers. Manufacturing – risks related to the company’s manufacturing process including product quality and product recalls. Human Capital – risks related to recruitment, training and retention of key employees, employee relationships & unions labor disputes, pension, and post retirement benefits, medical, health and welfare benefits, employee misconduct, employee litigation. 4. Technology & Innovation Innovation / R&D – risks related to innovation and new product development. Technology – risks related to the company’s reliance on technology. Cyber Security – risks related to securing the company’s digital assets and from cyber attacks. Trade Secrets & Patents – risks related to the company’s ability to protect its intellectual property and to infringement claims against the company as well as piracy and unlicensed copying. 5. Ability to Sell Demand – risks related to the demand of the company’s goods and services including seasonality, reliance on key customers. Competition – risks related to the company’s competition including substitutes. Sales & Marketing – risks related to sales, marketing, and distribution channels, pricing, and market penetration. Brand & Reputation – risks related to the company’s brand and reputation. 6. Macro & Political Economy & Political Environment – risks related to changes in economic and political conditions. Natural and Human Disruptions – risks related to catastrophes, floods, storms, terror, earthquakes, coronavirus pandemic/COVID-19. International Operations – risks related to the global nature of the company. Capital Markets – risks related to exchange rates and trade, cryptocurrency.