General Mills, Inc. (GIS), headquartered in Minneapolis, Minnesota, manufactures and markets branded consumer foods sold through retail stores. Valued at $37.98 billion by market cap, the company also serves the foodservice and commercial baking industries. Its product categories include ready-to-eat cereals, convenient meals, snacks, yogurt, super-premium ice creams, baking mixes, and ingredients. The global food giant is expected to announce its fiscal first-quarter earnings for 2025 on Wednesday, Sep. 18.
Ahead of the event, analysts expect GIS to report a profit of $1.04 per share on a diluted basis, down 4.6% from $1.09 per share in the year-ago quarter. The company has consistently surpassed Wall Street’s EPS estimates in its last four quarterly reports.
For the full year, analysts expect GIS to report EPS of $4.49, down marginally from $4.52 in fiscal 2024.
GIS stock has underperformed the S&P 500’s ($SPX) 15.6% gains on a YTD basis, with shares up 4.2% during this period. Similarly, it underperformed the S&P 500 Cons Staples Sector SPDR’s (XLP) 7.8% gains over the same time frame.
GIS’s overall performance can be attributed to the adverse net price realization and mix and the challenges posed by high inflation. Elevated prices have caused value buyers to shift to cheaper alternatives, thus affecting the company's bottom line.
On Jun. 26, GIS shares closed down more than 4% after reporting soft Q4 and full-year results. In Q4, its net sales of $4.71 billion were below the consensus of $4.87 billion, and its forecast for fiscal 2025 organic net sales of 0% to 1% was weaker than the consensus estimates of 1.18%. The company’s adjusted EPS of $1.01 was also down 10% in constant currency. During fiscal 2024, GIS’ net sales of $19.90 billion declined 1% from the prior year, and organic net sales were 1% below year-ago results that grew double digits. Its adjusted operating profit of $3.6 billion was up 4% in constant currency, and its adjusted EPS of $4.52 was up 6% in constant currency.
For fiscal 2025, the company expects adjusted EPS is expected to be between down 1% and up 1% in constant currency from the base of $4.52 earned in fiscal 2024. Moreover, its free cash flow conversion is expected to be at least 95% of adjusted after-tax earnings.
Analysts’ consensus opinion on GIS stock is neutral, with a “Hold” rating overall. Out of 17 analysts covering the stock, three advise a “Strong Buy” rating, and 14 give a “Hold.” The average analyst price target for GIS is $67.70, indicating a marginal potential downside from the current levels.
On the date of publication, Neha Panjwani did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
