General Mills Reports Better Than Expected Q1 Earnings Results

General Mills (NYSE:GIS) experienced a more than 2% decline in its shares intra-day today after the company revised its full-year forecast downwards.

In its fiscal second quarter, General Mills reported an adjusted earnings per share (EPS) of $1.25, an improvement from $1.10 in the same period last year and higher than the anticipated $1.15. However, net sales decreased by 1.6% year-over-year to $5.14 billion, falling short of the expected $5.35 billion.

The company now anticipates a slower volume recovery in fiscal 2024. This updated outlook is based on a more conservative consumer economic forecast and a quicker return to normal competitive availability on store shelves.

Consequently, organic net sales projections have been adjusted to a range between -1% and flat, a significant change from the previously estimated growth of 3-4%. This adjustment reflects the expected slower volume recovery in the upcoming fiscal year.

Additionally, General Mills now forecasts adjusted operating profit and adjusted diluted EPS to grow by 4-5% in constant currency, a slight decrease from the previously projected growth range of 4-6% in constant currency.

General Mills (NYSE:GIS) reported a decline in adjusted earnings for the first quarter, but it still exceeded expectations. This achievement can be attributed to the stabilization of supply chains and the resilience of consumers in the face of inflationary pressures.

In the first quarter, General Mills reported earnings per share (EPS) of $1.09, surpassing the analyst estimate of $1.08. The company's revenue for the quarter reached $4.9 billion, slightly ahead of the Street estimate of $4.89 billion.

Furthermore, General Mills has reaffirmed its outlook for the fiscal year 2024, expressing confidence in driving organic net sales growth through robust marketing, innovation, in-store support, and effective pricing strategies. The company also expects a moderation in the rate of input cost inflation, along with a reduction in disruptions within its supply chains.

General Mills anticipates organic net sales growth of 3 to 4 percent and projects a 4 to 6 percent increase in both adjusted operating profit and adjusted diluted EPS in constant currency.

Argus analysts raised their rating of General Mills (NYSE:GIS) from Hold to Buy, setting a price target of $90.00.

General Mills holds a prominent position within the packaged food industry and possesses a wide range of established brands. The company is capitalizing on its major brands through promotional activities and the introduction of new products. Additionally, General Mills is expanding its business through strategic acquisitions, such as the recent purchase of TNT Crust, a manufacturer specializing in frozen pizza crusts.

The company's management is actively focused on cost control and margin enhancement, implementing a comprehensive margin management program. The analysts highlighted the management's initiatives to develop a unique portfolio of brands catering to health-conscious consumers and increase revenue from innovative products. General Mills maintains a robust balance sheet, and management has demonstrated confidence in the company's future prospects by announcing a substantial 9% increase in the dividend, resulting in a current yield of approximately 3.1%.

Overall, the analysts believe that General Mills is well-positioned to leverage its brand strength and enhance its profit margins.

General Mills (NYSE:GIS) shares plunged around 5% intra-day today after the company reported its Q4 earnings results, with revenue of $5 billion missing the Street estimate of $5.17 billion. EPS was $1.12, compared to the Street estimate of $1.07.

General Mills has outlined its financial targets for fiscal 2024. The company expects organic net sales to grow between 3% and 4%. General Mills also anticipates a 4% to 6% increase in adjusted diluted EPS in constant currency, relative to the base value of $4.30 earned in fiscal 2023. The company also hiked its quarterly dividend by 9.3% to $0.59 per share, or $2.36 annualized, for an annual yield of 2.9%.

General Mills (NYSE:GIS) shares plunged around 5% intra-day today after the company reported its Q4 earnings results, with revenue of $5 billion missing the Street estimate of $5.17 billion. EPS was $1.12, compared to the Street estimate of $1.07.

General Mills has outlined its financial targets for fiscal 2024. The company expects organic net sales to grow between 3% and 4%. General Mills also anticipates a 4% to 6% increase in adjusted diluted EPS in constant currency, relative to the base value of $4.30 earned in fiscal 2023. The company also hiked its quarterly dividend by 9.3% to $0.59 per share, or $2.36 annualized, for an annual yield of 2.9%.

Analysts at RBC Capital provided their outlook on General Mills, Inc. (NYSE:GIS) ahead of tomorrow’s Q3 earnings announcement, expecting adjusted EPS of $0.93 (vs Street estimate of $0.92) and organic growth of 11.5% (vs. Street estimate 11.7%).

The analysts expect pricing to continue offsetting comparatively mild volume softness, given the trends in scanner data. According to the analysts, ongoing stabilization in the pet food business should support the modest gross margin expansion that the company expects in 2023.

The company raised its 2023 guidance in late February (after raising the guide on the Q2 call), calling for organic sales growth of 10% (vs. prior 8-9%), and adjusted EPS growth of 7-8% (vs. prior 4-6%).

Given the intra-quarter update, the analysts expect the company to reiterate its outlook for the remainder of the year.