Latest news with #GeneralMills'
Miami Herald
02-07-2025
- Miami Herald
Ex-General Mills employee alleges retaliation after he objected to ‘fun facts' Black history flyers
A Black former General Mills employee is suing the company for discrimination and retaliation, alleging he was fired after objecting to Black History Month flyers that referred to racist atrocities as "fun facts." According to the lawsuit filed in Hennepin County (Minnesota) District Court, L. Lee Tyus Jr., who worked at a General Mills facility in St. Paul for more than five years, said he raised concerns in February after the company posted flyers in the employee breakroom as part of its Black History Month recognition. The flyers, decorated in red, black, and green - colors associated with the Pan-African flag - included brief descriptions of historic injustices, such as the 1921 Tulsa Race Massacre (also known as the Black Wall Street Massacre) and the Black Codes that preceded Jim Crow. They were titled: "Fun Facts About Black History," according to photos included in Tyus' complaint. Tyus found the phrasing offensive, according to the lawsuit, and asked the plant's human resources manager whether similar language would be used to describe atrocities involving white Americans. The HR manager allegedly responded: "No, it would just be labeled 'American Tragedies.' " Days later, Tyus said he raised the issue with the plant manager and his team lead, "explaining that the situation caused him to use his paid time off and exert time and energy to deal with General Mills' response, stating: 'Much like the massacre(,) I wish this didn't happen and I could put energy into something actually 'Fun' or doing the work as I have for years before now.'" When told no apology would be issued, he filed a formal complaint through the company's internal ethics platform. He was placed on leave the same day and instructed to submit medical documentation if he wished to return. "After learning he was being placed on an involuntary leave, Tyus Jr. responded that he was 'being retaliated against for my beliefs and aren't being allowed back to work which feels again like an injustice,'" the lawsuit said. When his leave ended, Tyus found his building access deactivated, the complaint says. Soon after, General Mills' Senior Employee Relations Lead, Tracey Hatchew, contacted him to discuss the allegations. She encouraged him to share her contact information with others who might also have been offended by the flyers. With his supervisor's approval, Tyus printed flyers listing Hatchew's contact information and placed them on the same breakroom tables where the original posters had appeared. On March 19, General Mills had Tyus escorted from the building and terminated his employment, citing "multiple violations of General Mills' standards of conduct and policies," according to the complaint. "General Mills has a national brand and a deep Minnesota footprint," Tyus' attorney, Naomi Martin, wrote in a statement. "That kind of presence comes with responsibility and a company of this size should be modeling what it means to support employees who speak up - not firing them." A spokesperson from General Mills wrote that while they cannot comment on pending litigation, "General Mills does not tolerate discrimination or retaliation." Tyus is seeking at least $50,000 in damages for each of three counts named in the complaint. Copyright (C) 2025, Tribune Content Agency, LLC. Portions copyrighted by the respective providers.
Business Insider
28-06-2025
- Business
- Business Insider
General Mills (GIS) Slashes Revenue Forecast as Trump Tariffs Squeeze Margins
Of late, General Mills (GIS) can't catch a break. Despite this week's fiscal fourth quarter 2025 earnings report featuring a beat on earnings per share (EPS), its stock dropped due to concerns over the company's strategic reinvestments and the growing impact of U.S. trade policies. Indeed, the consumer food company expects flat-to-negative organic sales and a drop in adjusted operating profit for the upcoming fiscal year. As price data shows, investors have reacted negatively to this week's earnings news, causing GIS stock to decline by almost 6%. Confident Investing Starts Here: I believe that investors have every right to feel uneasy due to a combination of internal (volume loss in its key market) and external (Trump's tariffs) threats, making me cautiously Neutral on GIS stock. General Mills' Latest Financials In its fiscal fourth quarter, General Mills reported earnings per share of $0.74, surpassing analyst expectations of $0.71, while revenue met forecasts at $4.6 billion, a 3% year-over-year decline. Despite the earnings beat, shares of General Mills have declined and are now trading near 52-week lows. This reaction reflects a broader market trend: investor attention is typically more focused on forward-looking guidance than on backward-looking results, which is reasonable given that future performance carries more weight in valuation models. In that context, General Mills' cautious outlook for fiscal year 2026 has unsettled investors. The company expects organic sales growth to remain flat, with a range of -1% to 1%. However, the more significant concern was its guidance for adjusted operating profit, which is projected to decline by 10% to 15% in constant currency from the fiscal 2025 baseline of $3.4 billion. This anticipated drop is a result of a combination of internal and external challenges. Some of these pressures were already evident in the latest quarter. As TipRanks data shows, in its largest segment—North American Retail—net sales declined by 3%, despite volume remaining flat, indicating underlying pricing or mix issues that may persist. This dynamic signals a deliberate reduction in the average price per unit and aligns with the company's strategic focus on 'returning to volume growth.' However, slashing prices doesn't always translate into higher sales volumes, particularly when underlying brand challenges remain. To address this, General Mills is ramping up its advertising investments, a strategy that will likely support the company's upcoming expansion into the fresh pet food category under its Blue Buffalo brand. Trump Tariffs Stir Trouble for General Mills Increased Selling, General, & Administrative (SG&A) costs aren't alone to blame for General Mills' profitability woes. Donald Trump's infamous tariffs continue to be a significant external operating headwind for General Mills. In fact, much of the 10% to 15% operating profit can be associated with tariffs, given that many ingredients and packaging materials are imported from China, Canada, and Mexico. General Mills' Mitigation Strategy Founded in 1928, General Mills is well-equipped to navigate challenging environments and has several strategies in place to help manage current headwinds. One key initiative is its 'Holistic Margin Management' program, which targets cost savings of 4%–5% as a percentage of cost of goods sold (COGS). This effort could yield up to $100 million in savings by fiscal year 2026, helping to offset inflationary pressures on input costs. The company is also shifting focus toward higher-margin, higher-growth categories. A notable move in this direction is the recent divestiture of its yogurt brands, including Yoplait and Go-Gurt, to Lactalis and Sodiaal for $2.1 billion—a clear example of strategic portfolio realignment. This transaction not only simplifies operations but also provides additional capital to reinvest in innovation and brand development. As a result, the coming year is expected to emphasize product innovation and brand building, although these efforts may weigh on short-term profit margins. According to TipRanks data, GIS maintains a profit margin of ~13%. From a valuation perspective, General Mills' stock appears reasonably priced, trading at a forward P/E of 12.74 —approximately 32% below the Consumer Staples sector average. For comparison, The Hershey Company (HSY) trades at a P/E of 30.27, supported by more substantial EBITDA margins of 25.84% versus General Mills' 19.91%. Is GIS Stock Worth Buying? On Wall Street, General Mills carries a Hold consensus rating based on two Buy, nine Hold, and two Sell ratings over the past three months. GIS' average price target of $56 implies an 11% upside potential over the next twelve months. Earlier this month, Morgan Stanley analyst Megan Alexander assigned a Sell rating to GIS stock with a price target of $51. The analyst expressed caution due to the company's 'decelerating scanner data trends' and a 'decline in retail takeaway.' She also expects a 'high single-digit percentage decline in earnings per share (…), driven by several headwinds, including profit dilution from the yogurt divestiture, operating profit headwinds from resetting incentive compensation, and potential cost inflation impacts.' On the other side of the aisle, Bank of America Securities analyst Peter Galbo is more bullish on General Mills, issuing a Buy rating on its stock with a price target of $63. He highlighted operational improvements, including improved gross margins, and believes the company's guidance for FY26, which calls for a decline in operating profit and EPS, is 'manageable.' General Mills Faces Tough Choices with Strong Brands In conclusion, General Mills' strategy of prioritizing volume growth over near-term profitability has drawn mixed reactions, and with good reason. The company operates in a mature, highly competitive market, faces flat growth, and has limited flexibility in terms of margins. While its planned entry into the fresh pet food category is an encouraging step toward diversification, it's still unclear when—or if—the necessary investments to build and scale that brand will yield meaningful returns. Ultimately, this situation underscores a broader reality: even a legacy player like General Mills cannot rely solely on established brands. Continued relevance in the food industry requires ongoing innovation and investment. For income-focused investors, t he stock does offer a compelling 4.49% dividend yield. However, this alone may not justify the risk, particularly given that 10-Year Treasury Notes are offering comparable yields with far less volatility. At this point, General Mills' products may be more appealing on store shelves than its shares are in a portfolio.
Yahoo
26-06-2025
- Business
- Yahoo
GIS Q2 Deep Dive: Investment in Value and Innovation Amid Volume and Margin Pressures
Packaged foods company General Mills (NYSE:GIS) fell short of the market's revenue expectations in Q2 CY2025, with sales falling 3.3% year on year to $4.56 billion. Its non-GAAP profit of $0.74 per share was 4.1% above analysts' consensus estimates. Is now the time to buy GIS? Find out in our full research report (it's free). Revenue: $4.56 billion vs analyst estimates of $4.58 billion (3.3% year-on-year decline, 0.5% miss) Adjusted EPS: $0.74 vs analyst estimates of $0.71 (4.1% beat) Adjusted EBITDA: $758.1 million vs analyst estimates of $749.6 million (16.6% margin, 1.1% beat) Operating Margin: 11.1%, down from 16.5% in the same quarter last year Organic Revenue fell 3% year on year (-6% in the same quarter last year) Sales Volumes fell 2% year on year, in line with the same quarter last year Market Capitalization: $27.49 billion General Mills' second quarter results did not meet Wall Street's sales expectations, with revenue declining year over year—a trend that prompted a significant negative market reaction. Management attributed the underperformance to ongoing volume declines and competitive pressures in core categories, especially within North America Retail. CEO Jeffrey Harmening noted the company's increased focus on value investments in key brands such as Pillsbury and Totino's and expanded efforts in soup, cereal, and fruit snacks. Harmening acknowledged, 'We know that it's an investment year, but we are very confident these investments will pay off given what we've seen over the last couple of quarters.' Looking ahead, General Mills' strategy centers on driving volume growth through increased marketing, new product launches, and targeted price adjustments, particularly in North America Retail and the pet food segment. Management expects these investments to pressure margins in the near term, but CFO Kofi Bruce explained that some impacts, such as stranded costs from divestitures and tariff-related expenses, are temporary. Harmening emphasized the importance of aligning pricing with competition to enable effective marketing, stating, 'It's about investment and making sure that we get trial on all of our good marketing initiatives.' The company is also betting on innovation, including a national launch of fresh pet food, to return the business to growth. Management pointed to targeted value investments, stepped-up advertising, and product innovation as central to both recent performance and their plans to restore growth, while acknowledging persistent volume and margin challenges. Value Investments Expanded: The company increased value-oriented promotions in categories like cereal, soup, and fruit snacks, aiming to improve volume trends. These investments were supported by enhanced advertising, particularly for brands such as Pillsbury and Totino's, which management believes can help regain share lost to competitors. Fresh Pet Food Launch: General Mills announced a national rollout of Blue Buffalo's refrigerated pet food, building on positive test market results. Management expressed confidence in the brand's ability to scale profitably over time, but cautioned that initial investments to drive consumer trial will weigh on margins for several quarters. Core Brand Renovations: The company undertook significant product updates and new product introductions, with Harmening describing the 'core renovation news' as the strongest in his tenure. Protein innovation and new seasonal offerings in snacks and cereals are intended to meet evolving consumer preferences. International and Non-Retail Strength: While North America Retail remains challenged, General Mills reported share gains in international businesses, foodservice, and healthcare channels. These areas provided some offset to domestic headwinds, though management emphasized the need for further growth in its largest categories. Margin Management and Productivity: Facing input cost pressures and increased reinvestment, management highlighted record levels of holistic margin management (cost-saving initiatives) and ongoing productivity efforts. However, they acknowledged that some margin reductions are temporary, linked to tariffs and stranded costs from divestitures, and expect improvement once these factors abate. General Mills' outlook is shaped by continued investment in marketing, innovation, and selective pricing actions, with management expecting near-term margin pressure but aiming for volume recovery. Stepped-Up Marketing and Innovation: Increased advertising spend and the rollout of new products, especially in protein-forward and seasonal segments, are expected to drive trial and brand engagement. Management believes these moves will support volume gains, even if dollar sales lag initially due to price reductions and trade investments. Margin Headwinds and Recovery: The company anticipates that higher short-term expenses from marketing, tariffs, and stranded costs (such as those related to the Yoplait divestiture) will pressure margins. CFO Kofi Bruce described some of these as 'more temporary in nature,' with expectations for margin improvement as investments scale and cost-saving measures take hold. Category and Competitive Dynamics: Management does not expect a significant rebound in category growth, instead focusing on competitiveness within core categories. Leadership cited the need to balance volume and pricing, leveraging strategic revenue management tools to navigate inflation, tariffs, and evolving consumer sentiment. In the next few quarters, our team will be monitoring (1) the volume response to expanded value investments and new product launches, (2) the pace at which margin pressures from tariffs and one-time costs begin to abate, and (3) the national rollout and consumer adoption of Blue Buffalo's fresh pet food line. Execution in core North America Retail categories and the effectiveness of marketing investments will be critical to tracking the company's progress. General Mills currently trades at $50.72, down from $53.37 just before the earnings. Is the company at an inflection point that warrants a buy or sell? See for yourself in our full research report (it's free). Donald Trump's victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs. While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like our Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025). Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today.
CNBC
26-06-2025
- Business
- CNBC
RBC upgrades this packaged foods stock, sees rebound from year-to-date losses
RBC Capital Markets sees a bright outlook ahead for General Mills . The bank upgraded shares of the packaged foods company to an outperform rating from sector perform. Analyst Nik Modi did lower his price target to $63 per share from $67, but that still implies upside of 24%. General Mills on Wednesday reported mixed results for its fiscal fourth quarter, but RBC pointed to General Mills' forecast for next year as a bright spot for the report. Importantly, this guidance bakes in the level of reinvestment needed to direct the company back towards topline growth, while still giving it enough wiggle room to beat its earnings target, Modi said. GIS YTD mountain GIS YTD chart "While we acknowledge investor sentiment around packaged food remains poor and fundamentals have yet to fully turn, we believe GIS's FY'26 EPS guidance embeds enough cushion for it to deliver, despite an ongoing sluggish environment," Modi wrote. "We are also encouraged by management's acknowledgment that prices need to come down further." General Mills' valuation also looks attractive, the analyst added. "GIS has been a relative underperformer this year within consumer staples, trailing the XLP by ~23% YTD and the S & P500 by ~24% YTD," he said. "In 2025 YTD, GIS's discount to its peer group has continued to widen and has reached the widest level seen in the past 5 years." Shares of General Mills have plunged 21% in 2025. Most analysts covering the stock are on the sidelines. Of the 22 who cover it, 17 rate it a hold, LSEG data shows.
CNBC
25-06-2025
- Business
- CNBC
General Mills forecasts weak annual profit as economic uncertainty weighs
General Mills forecast annual profit below expectations on Wednesday, as weak demand for its refrigerated baked goods and snacks in the U.S. in a tariff-driven, uncertain macroeconomic background weighed on the Pillsbury owner. Economic uncertainty arising from President Donald Trump's shifting tariff policies has weighed on consumer spending in the U.S., challenging General Mills' efforts to drum up sales. "We expect the operating environment will remain volatile, with consumers pressured by widespread uncertainty from tariffs, global conflicts, and changing regulations," CEO Jeff Harmening said. "Amid this uncertainty, we expect consumers to remain cautious and continue seeking value." Shares of the Cheerios-maker were down 2% in early trading. The company has been trying to boost demand through new products, such as a fresh version of its Blue Buffalo pet food, betting on a rise in demand for the minimally processed fresh pet food market. But analysts expect investments in marketing and acquisitions to take a toll on its margins. "While increased investments will pressure profitability, returning to volume growth, especially in North America Retail, is the first step to return to on-algorithm delivery, and might be a necessary pill to swallow," said Consumer Edge analyst Connor Rattigan. The company expects full-year adjusted profit to decline between 10% and 15%, compared to analysts' estimates of a 4.8% decline, according to data compiled by LSEG. For the fourth quarter ended May 25, General Mills posted sales of $4.56 billion, narrowly missing expectations of $4.59 billion. Net sales at its North America retail segment, a major revenue contributor, were down 10%, offsetting gains from a 12% rise in General Mills' pet segment sales in the region. The company, however, posted an adjusted profit per share of 74 cents for the reported quarter, above analysts' estimates of 71 cents.
