Revenue during the quarter dropped 7.07 percent to $4,112.10 million from $4,424.90 million in the previous year period. Gross margin for the quarter expanded 214 basis points over the previous year period to 36.95 percent. Total expenses were 81.30 percent of quarterly revenues, up from 79.53 percent for the same period last year. That has resulted in a contraction of 177 basis points in operating margin to 18.70 percent.

Operating income for the quarter was $768.90 million, compared with $905.70 million in the previous year period.

However, the adjusted operating income for the quarter stood at $806.20 million compared to $798.20 million in the prior year period. At the same time, adjusted operating margin improved 157 basis points in the quarter to 19.61 percent from 18.04 percent in the last year period.

“Although we posted disappointing net sales performance in the second quarter, we delivered good growth in adjusted diluted EPS, driven by significant expansion in our adjusted operating profit margin,” said General Mills Chairman and Chief Executive Officer Ken Powell. “Our organic sales declines reflect the actions we’ve taken to optimize our spending and prioritize profitable volume, as well as weakening food-industry trends in the U.S. We’re making targeted adjustments to our plans in the second half to improve our topline performance while still delivering our margin expansion and EPS growth commitments. We remain confident that our strategy of investing behind Consumer First ideas - while driving strong margin expansion - will generate long-term sustainable growth, robust cash flow, and top-tier returns for our shareholders.”

The company has spent $280 million cash to meet investing activities during the first half as against cash inflow of $523 million in the last year period It has incurred net capital expenditure of $317.90 million on net basis during the first six months, up 8.76 percent or $25.60 million from year ago period.

The company has spent $628.90 million cash to carry out financing activities during the first six months as against cash outgo of $1,341.80 million in the last year period.

Cash and cash equivalents stood at $809.70 million as on Nov. 27, 2016, up 24.61 percent or $159.90 million from $649.80 million on Nov. 29, 2015.

Working capital remains negative
Working capital of General Mills was negative $2,132.90 million on Nov. 27, 2016 compared with negative $921.80 million on Nov. 29, 2015. Current ratio was at 0.66 as on Nov. 27, 2016, down from 0.81 on Nov. 29, 2015.

Cash conversion cycle (CCC) has decreased to 6 days for the quarter from 27 days for the last year period. Days sales outstanding went up to 32 days for the quarter compared with 31 days for the same period last year.

Days inventory outstanding has decreased to 27 days for the quarter compared with 51 days for the previous year period. At the same time, days payable outstanding went up to 65 days for the quarter from 55 for the same period last year.