Overview
US packaged foods maker's fiscal Q4 sales slightly beat analyst expectations
Adjusted EPS for fiscal Q4 beat consensus, rising 27% in constant currency
Company posted operating loss on non-cash charges tied to goodwill and Brazil divestiture
Outlook
General Mills expects fiscal 2027 organic net sales to range from down 1.5% to up 0.5%
Company targets adjusted diluted EPS of $3.00 to $3.20 for fiscal 2027
General Mills expects at least $750 mln in cost savings in fiscal 2027
Result Drivers
MARGIN IMPROVEMENT - Higher adjusted gross margin driven by favorable net price realization and mix, and trade expense timing, partially offset by higher input costs
COST MANAGEMENT - Lower selling, general, and administrative expenses supported profit growth, especially in North America Retail
SEGMENT VARIATION - International and Pet segments saw profit growth from price/mix and lower input costs, while Retail and Foodservice faced volume and cost pressures
Company press release:
Key Details
Metric Beat/Miss Actual Consensus Estimate | Q4 Sales Slight Beat* $4.61 bln $4.59 bln (15 Analysts) | Q4 Adjusted EPS Beat $0.95 $0.80 (16 Analysts) | Q4 EPS -$3.74 | Q4 Gross Margin 34.80% | Q4 Adjusted Gross Margin 34.20% | Q4 Operating profit -$2.09 bln |
*Applies to a deviation of less than 1%; not applicable for per-share numbers.
Analyst Coverage
The current average analyst rating on the shares is "hold" and the breakdown of recommendations is 4 "strong buy" or "buy", 12 "hold" and 4 "sell" or "strong sell"
The average consensus recommendation for the food processing peer group is "buy."
Wall Street's median 12-month price target for General Mills Inc is $36.00, about 3.4% above its June 30 closing price of $34.80
The stock recently traded at 11 times the next 12-month earnings vs. a P/E of 11 three months ago
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