Profits, sales slump and big bets on 2025 rebound

General Mills faces mixed Q1 results: earnings, sales declines and big bets on 2025 rebound

General Mills, Inc. The company’s shares (NYSE:GIS) were trading slightly lower on Wednesday.

The company reported first-quarter adjusted earnings per share of $1.07, down 2%, beating the consensus estimate of $1.06. Quarterly revenue of $4.85 billion topped analysts’ consensus estimates of $4.801 billion.

Quarterly earnings were impacted by lower adjusted operating profit, higher net interest expense and a higher adjusted effective tax rate.

Net sales decreased by 1%, while organic net sales also decreased by 1%, due to unfavorable organic net price realization and an unfavorable sales mix.

“We strengthened our core businesses by delivering more exceptional customer experiences, which resulted in improved volume, net sales and market share trends compared to the prior quarter,” said Jeff Harmening, chairman and CEO of General Mills.

Also read: General Mills sells U.S. and Canadian yogurt businesses in $2.1 billion deal amid competition, market challenges: Details

Operating income declined to $832 million, down 11%, and adjusted operating income was $865 million, down 4% in constant currency.

Adjusted gross margin of 35.4% on net sales was broadly in line with prior-year results, with the benefits of HMM cost savings offset by input cost inflation and unfavorable net price realization and product mix.

General Mills recently announced that it has entered into definitive agreements to sell its North American yogurt business to Lactalis and Sodiaal, two leading French dairy companies, for a total cash value of $2.1 billion.

Perspectives: General Mills reaffirmed its fiscal 2025 financial guidance, expecting organic net sales to range from zero to 1% growth, while adjusted diluted earnings per share are expected to range from a decline of 1% to an increase of 1% in constant currency.

General Mills expects category volume trends to gradually improve in fiscal 2025, although full-year category value growth is expected to be lower than the company’s long-term growth forecasts.

The company said it expects to reinvest potential margin flexibility in the business, including planning a significant increase in brand-building investments in fiscal 2025 to improve volume performance.

Price action: GIS shares are trading 1.34% lower at $73.50 in pre-market trading, last checked on Wednesday.

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This article General Mills Faces Mixed Q1 Results: Earnings Rise, Sales Drop, Big Bets on 2025 Rebound originally appeared on Benzinga.com