GIS - Saporu is 'part of the bears' on General Mills after its Q2 earnings
2023-12-20 10:49:53 ET
General Mills Inc (NYSE: GIS) opened in the red this morning after reporting weaker-than-expected revenue for its second financial quarter.
General Mills stock down on lowered guidance
The stock is trending down at writing also because the processed consumer foods company trimmed its sales outlook for the full year citing lacklustre recovery in volumes.
General Mills now forecasts its organic sales to remain flat or be down 1.0% in fiscal 2024. Its previous guidance was for up to 4.0% growth. Delano Saporu of New Street Advisors recently said on CNBC’s “ The Exchange ”:
I’m part of the bears on this one. For them, consumer is weakening. Price increases are not going to be able to make up for [decline in volume].
The multinational expects increase in its adjusted per-share earnings to now be capped at 5.0% this year versus 6.0% it had guided for earlier. General Mills stock is currently down close to 30% versus its year-to-date high.
Watch here: https://www.youtube.com/embed/yQzatjblD3Y?feature=oembedNotable figures in General Mills Q2 earnings
- Earned $595.5 million versus the year-ago $605.9 million
- Per-share earnings still inched up to $1.02 from $1.01
- Adjusted EPS printed at $1.25 as per the press release
- Sales declined 1.6% year-over-year to $5.14 billion
- Consensus was $1.16 a share on $5.35 billion in sales
- Volume fell 4.0% while prices gained 3.0% in Q2
Other notable figures in the earnings report include a 2.0% decline in retail sales (North America) and a 4.0% decline in pet sales. Nik Modi – an RBC Capital Markets analyst also reiterated his “hold” rating on General Mills stock ahead of the earnings and said:
Expectations are low given tough operating environment for packaged food players. While pricing benefit is decreasing, volumes are only marginally improving in scanner data for General Mills.
General Mills is known as a consumer staple company, they make cereal, frozen foods, and pet food.
— Frog Capital (@FrogNews) December 20, 2023
Their only source of revenue gains came from price increases.
This is a very common theme in #bidenomics . pic.twitter.com/5bGmI9nWWr
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