Latest news with #Pillsbury
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. 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Yahoo
25-06-2025
- Business
- Yahoo
Cheerios maker General Mills forecasts weak annual profit
STORY: Economic uncertainty has hit the Pillsbury Doughboy. Pillsbury parent General Mills forecast annual profit below expectations on Wednesday, due to weak demand for its snacks and cereals. U.S. President Donald Trump's shifting tariff policies have weighed on consumer spending, challenging General Mills' efforts to drum up sales. The company - which also owns Cheerios, Haagen-Daas and Betty Crocker - has been trying to boost demand through new products. Those include a fresh version of its Blue Buffalo pet food, as consumer demand rises for minimally processed pet food and treats. But analysts expect investments in marketing and acquisitions to take a toll on margins. Meanwhile, the company's CEO said the economic backdrop is likely to remain "volatile," with consumers pressured by "widespread uncertainty from tariffs, global conflicts, and changing regulations." Shares of General Mills shed roughly 4% in Wednesday morning trading.
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.
Yahoo
25-06-2025
- Business
- Yahoo
General Mills Stock Slips as Cereal Maker Sees Larger-Than-Expected Profit Drop
General Mills shares fell in premarket trading Wednesday as the cereal maker projected a larger fiscal 2026 profit drop than analysts expected. Fiscal 2025 fourth-quarter sales fell just short of estimates, while profit topped them. CEO Jeff Harmening said the company's "number one goal in fiscal 2026 is to restore volume-driven organic sales growth."General Mills (GIS) shares fell in premarket trading Wednesday after the cereal maker's fiscal 2025 fourth-quarter sales fell short of estimates and it projected a bigger-than-expected profit decline for the new fiscal year. The maker of Lucky Charms, Betty Crocker, and Pillsbury reported $4.56 billion in Q4 sales, down 3% year-over-year and just below the $4.58 billion Visible Alpha consensus. Adjusted earnings per share (EPS) of $0.74 topped analysts' expected $0.71. North America Pet sales grew 12% and International sales rose 11%, but they fell 10% in its North America Retail and 2% in North America Foodservice. Last quarter, the company said it expected "macroeconomic uncertainty to continue to impact consumers" in the fourth quarter. For fiscal 2026, General Mills expects adjusted EPS down 10% to 15% from fiscal 2025's $4.21, with the entire ranging coming in below the $3.90 Visible Alpha expectation. Organic net sales are seen declining 1% to growing 1%, while analysts expect 0.1% growth. CEO Jeff Harmening said the company's "number one goal in fiscal 2026 is to restore volume-driven organic sales growth." General Mills shares, which entered Wednesday down about 16% since the start of the year, fell 4% less than an hour before the opening bell. Read the original article on Investopedia
CTV News
25-06-2025
- Business
- CTV News
General Mills forecasts weak annual profit as economic uncertainty weighs
In this Aug 8, 2018, file photo boxes of General Mills Cinnamon Toast Crunch cereal sit on display in a market in Pittsburgh. (AP Photo/Gene J. Puskar, File) 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 U.S. President Donald Trump's shifting tariff policies has weighed on consumer spending in the U.S., challenging General Mills' efforts to drum up sales. The company has been trying to boost demand through new products, such as a fresh version of its Blue Buffalo pet food for dogs, but investments in marketing and acquisitions are seen taking a toll on its margins. '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 nearly two per cent before the bell. The company expects full-year adjusted profit to be in the range of down ten per cent to down 15 per cent, compared to analysts' estimates of a 4.8 per cent decline, as per data compiled by LSEG. For the fourth quarter ended May 25, General Mills posted sales of US$4.56 billion, narrowly missing analysts' estimates of US$4.59 billion, as per data compiled by LSEG. Net sales at its North America retail segment, a major revenue contributor, were down ten per cent, offsetting gains from a 12 per cent rise in General Mills' pet segment sales in the region. The two segments had recorded declines of seven and eight per cent, respectively, a year ago. The company, however, posted an adjusted profit of 74 cents per share for the reported quarter, above analysts' estimate of 71 cents per share. --- Reporting by Neil J Kanatt in Bengaluru; Editing by Leroy Leo
