Core Viewpoint - The article discusses potential investment opportunities in companies that are likely to perform well amid the uncertainty created by recent U.S. tariffs, particularly focusing on companies with limited international exposure and those providing consumer staples. Group 1: T-Mobile - T-Mobile is a major U.S. wireless carrier that has been gaining market share and is insulated from tariff impacts due to its focused business model [4][5] - The company reported free cash flow of $17 billion in 2024, up from $13.6 billion in 2023, with management forecasting $17.3 billion to $18 billion for the current year [5] - T-Mobile's strategy includes returning capital to shareholders through share repurchases and a modest dividend growth plan, providing it with flexibility compared to competitors like AT&T and Verizon [7][8] Group 2: CarMax - CarMax, the largest used-vehicle dealer in the U.S., is expected to benefit from increased demand for used cars due to a 25% tariff on auto imports, which could raise new car prices by $3,500 to $16,000 [9][10] - The company maintains a gross profit of around $2,300 per vehicle, allowing it to grow earnings if demand shifts to used vehicles [11] - CarMax's stock is currently priced at less than 20 times forward earnings, presenting a potential bargain if tariffs drive higher unit sales [13] Group 3: General Mills - General Mills is positioned to benefit from price increases on grocery items due to tariffs, as it has strong brands that are less affected by inflationary pressures [14][15] - The company has maintained a gross margin of around 35%, significantly higher than competitors, and is focused on cost savings and new product investments [16][17] - Despite a projected 2% drop in earnings per share for fiscal 2026, General Mills is seen as a stable investment option, trading at less than 15 times expected earnings [17]

Financial Performance - In Q3 fiscal 2025, net sales decreased by 5% to $4,842.2 million, with organic net sales also down by 5% compared to the same period last year[92][96][93]. - Operating profit decreased by 2% to $891 million, with an operating profit margin of 18.4%, which is an increase of 50 basis points[92][93]. - Diluted earnings per share fell by 4% to $1.12, while adjusted diluted earnings per share decreased by 15% on a constant-currency basis to $1.00[92][93]. - For the nine-month period ended February 23, 2025, net sales were $14,930.4 million, a decrease of 1% compared to the same period last year[110][111]. - Operating profit for the nine-month period increased by 6% to $2,800.8 million, with an operating profit margin of 18.8%, up 130 basis points[109][110]. - Segment operating profit decreased 20 percent to $102 million in Q3 fiscal 2025, compared to $128 million in Q3 fiscal 2024, primarily due to higher SG&A expenses and input costs[149]. - Adjusted operating profit for the quarter ended February 23, 2025, was $800.8 million, representing a margin of 16.5%[194]. - For the nine-month period ended February 23, 2025, adjusted operating profit was $2,730.1 million, with a margin of 18.3%[194]. Sales and Revenue Breakdown - North America Retail net sales decreased 7% to $3,009.1 million in the third quarter of fiscal 2025 compared to $3,242.1 million in the same period last year[125]. - International net sales decreased 4% to $651.3 million in the third quarter of fiscal 2025 compared to $680.1 million in the same period last year[135]. - North America Pet net sales were flat at $623.7 million in the third quarter of fiscal 2025 compared to $624.5 million in the same period last year[143]. - North America Foodservice net sales increased 1 percent to $555.3 million in Q3 fiscal 2025, driven by favorable net price realization, partially offset by a decrease in volume growth contributions[151]. - North America Foodservice net sales increased 3 percent to $1,721.5 million in the nine-month period ended February 23, 2025, compared to $1,669.7 million in the same period in fiscal 2024, driven by volume growth and favorable net price realization[153]. Expenses and Costs - SG&A expenses increased by $91 million to $2,552 million in the nine-month period, with SG&A as a percentage of net sales rising by 90 basis points[116]. - Cost of sales decreased by $228 million to $9,671 million in the nine-month period, primarily due to lower volume and product rate and mix[115]. - The company recorded $56 million in unallocated corporate expenses in Q3 fiscal 2025, down from $64 million in the same period in fiscal 2024, reflecting a decrease in certain compensation and benefit-related expenses[160]. Tax and Earnings - The effective tax rate for Q3 fiscal 2025 was 19.8%, up from 18.5% in the same period last year[104][105]. - After-tax earnings from joint ventures decreased to $14 million in Q3 fiscal 2025, down from $18 million in the same period last year[106]. - After-tax earnings from joint ventures decreased to $64 million in the nine-month period ended February 23, 2025, down from $66 million in the same period last year[121]. - The effective tax rate increased to 20.5% in the nine-month period ended February 23, 2025, compared to 19.5% in the same period last year[120]. - Adjusted effective income tax rate for the quarter ended February 23, 2025, was reported at 21.0%[212]. Divestitures and Gains - A divestiture gain of $96 million was recorded in Q3 fiscal 2025 related to the sale of the Canada yogurt business[101]. - Divestiture gain of $96 million related to the sale of the Canada yogurt business in the nine-month period ended February 23, 2025[117]. - The company reported a divestiture gain related to the sale of its Canada yogurt business in fiscal 2025[182]. Cash Flow and Investments - Cash provided by operations was $2,307 million in the nine-month period ended February 23, 2025, compared to $2,439 million in the same period last year, reflecting a $132 million decrease[162]. - Cash used by investing activities was $1,579 million in the nine-month period ended February 23, 2025, compared to $508 million in the same period in fiscal 2024, including the acquisition of Whitebridge Pet Brands for $1,410 million[163]. - Cash used by financing activities was $610 million in the nine-month period ended February 23, 2025, compared to $1,928 million in the same period in fiscal 2024, with $902 million spent on common stock purchases[164]. Debt and Financial Position - The company had $1,941 million of long-term debt maturing in the next 12 months, including $800 million of fixed-rate notes due April 17, 2025[168]. - As of February 23, 2025, the company had $404 million of cash and cash equivalents in foreign jurisdictions, with plans to repatriate funds without incurring further U.S. income tax liability[165]. Regulatory Changes - The FASB issued ASU 2023-09 requiring enhanced income tax disclosures effective for fiscal 2026, with early adoption permitted[176]. - ASU 2023-07 mandates enhanced segment disclosures effective for fiscal 2025 and fiscal 2026, with retrospective application required[177]. Segment Performance - International segment operating profit decreased 39% to $63 million in the nine-month period ended February 23, 2025, compared to $103 million in the same period last year[142]. - North America Retail organic net sales decreased 2% in the nine-month period ended February 23, 2025, compared to the same period in fiscal 2024[130]. - North America Retail segment's operating profit declined by 14% for the quarter ended February 23, 2025, with no impact from foreign currency exchange[210]. - North America Pet segment's operating profit dropped by 20% for the quarter ended February 23, 2025, with no foreign currency impact[210]. - North America Foodservice segment's operating profit increased by 1% for the quarter ended February 23, 2025, with no foreign currency impact[210]. - The North America Pet segment showed a 6% increase in operating profit for the nine-month period ended February 23, 2025[210].

Core Viewpoint - General Mills reported quarterly earnings of $1 per share, exceeding the Zacks Consensus Estimate of $0.95 per share, but down from $1.17 per share a year ago [1][2] Financial Performance - The earnings surprise for the quarter was 5.26%, with the company previously expected to post earnings of $1.22 per share but actually reporting $1.40, resulting in a surprise of 14.75% [2] - Revenues for the quarter were $4.84 billion, missing the Zacks Consensus Estimate by 2.28%, and down from $5.1 billion year-over-year [3] - Over the last four quarters, General Mills has surpassed consensus EPS estimates four times and topped revenue estimates twice [2][3] Stock Performance and Outlook - General Mills shares have declined approximately 5.2% since the beginning of the year, compared to a decline of 4.5% for the S&P 500 [4] - The current consensus EPS estimate for the upcoming quarter is $0.93 on revenues of $4.75 billion, and for the current fiscal year, it is $4.36 on revenues of $19.79 billion [8] Industry Context - The Zacks Industry Rank for Food - Miscellaneous, which includes General Mills, is currently in the bottom 46% of over 250 Zacks industries, indicating potential underperformance compared to higher-ranked industries [9]

Financial Performance - Third-quarter net sales decreased by 5% to $4.8 billion, with organic net sales also down 5%, primarily due to retailer inventory reductions and unfavorable foreign currency exchange[5] - Operating profit for the third quarter was $891 million, down 2%, while adjusted operating profit decreased by 13% in constant currency to $801 million[6] - Diluted earnings per share (EPS) fell by 4% to $1.12, with adjusted diluted EPS down 15% in constant currency to $1.00[6] - The company expects organic net sales to decline by 2% to 1.5%, a revision from the previous expectation of flat to up 1%[30] - Adjusted operating profit and adjusted diluted EPS are projected to decrease by 8% to 7% in constant currency, compared to earlier estimates of a 4% to 2% decline[30] - Net earnings for the nine-month period ended February 23, 2025, were $2,016.9 million, compared to $1,958.9 million for the same period in the previous year, reflecting an increase of 2.97%[40] - Net earnings attributable to General Mills for the nine-month period ended February 23, 2025, were $2,001.2 million, compared to $1,939.1 million in the same period last year, representing an increase of about 3.2%[5] - Reported diluted earnings per share (EPS) for the quarter ended February 23, 2025, was $1.12, a decrease of 4% compared to $1.17 for the same quarter last year[68] - Adjusted diluted EPS for the same quarter was $1.00, reflecting a 15% decline from $1.17 year-over-year[68] Segment Performance - The North America Retail segment reported a 7% decline in net sales to $3.0 billion, with organic net sales down 6%[13] - The North America Pet segment's net sales were flat at $624 million, with organic net sales down 5%[15] - The North America Foodservice segment saw a 1% increase in net sales to $555 million, with organic net sales also up 1%[17] - International segment net sales decreased by 4% to $651 million, impacted by unfavorable foreign currency exchange[19] - North America Retail segment net sales fell by 7% to $3,009.1 million, while operating profit decreased by 14% to $648.1 million[36] - The International segment's net sales decreased by 4% to $651.3 million, with operating profit down 1% to $18.0 million[36] - The North America Pet segment reported flat net sales at $623.7 million, but operating profit decreased by 20% to $102.2 million[36] Cost Management and Savings Initiatives - Gross margin improved by 40 basis points to 33.9% of net sales, driven by Holistic Margin Management (HMM) cost savings, despite input cost inflation[9] - The Holistic Margin Management program is anticipated to deliver at least 5% savings in cost of goods sold for fiscal 2026, equating to approximately $600 million in gross productivity savings[27] - The company is reviewing cost-saving initiatives targeting at least $100 million in savings for fiscal 2026[27] - Unallocated corporate expenses totaled $56 million in Q3 FY2025, down from $64 million in Q3 FY2024, reflecting a decrease of approximately 12.5%[4] Cash Flow and Assets - Cash provided by operating activities totaled $2.3 billion through nine months, compared to $2.4 billion a year ago[25] - Cash flows from operating activities for the nine-month period were $2,306.6 million, down from $2,438.9 million in the prior year[40] - Cash and cash equivalents at the end of the period were $521.3 million, a decrease from $588.6 million at the end of the previous year[40] - Total assets increased to $32,706.2 million as of February 23, 2025, up from $30,860.5 million a year earlier, representing a growth of 5.97%[38] - Total current liabilities increased to $7,876.2 million from $7,061.9 million, marking a rise of 11.52%[38] - Long-term debt stood at $11,839.6 million, an increase from $11,015.1 million, indicating a rise of 7.48%[38] - Stockholders' equity decreased to $9,512.6 million from $9,691.3 million, reflecting a decline of 1.85%[38] Acquisitions and Divestitures - The company completed the sale of its Canada yogurt business for a pre-tax gain of $96 million and expects to close the sale of its U.S. yogurt business for approximately $2 billion in 2025[42] - The acquisition of NX Pet Holding, Inc. was completed for $1 billion, with recorded goodwill of $1,087 million and an indefinite-lived intangible asset of $289 million[45] - Transaction costs related to the sale of North American yogurt businesses and the Whitebridge Pet Brands acquisition totaled $33 million for the nine-month period ended February 23, 2025, compared to $1 million in the same period last year[4] - Integration costs related to the Whitebridge Pet Brands acquisition amounted to $7 million for the nine-month period ended February 23, 2025[4] Tax and Earnings Adjustments - The effective tax rate for the nine-month period ended February 23, 2025, was 20.5%, up from 19.5% in the same period last year[5] - Adjusted effective income tax rate for the quarter ended February 23, 2025, is 21.0%, compared to 18.4% for the same quarter in 2024[77] - The sum of adjustments to income taxes for the nine-month period is $(5.2) million, with a significant adjustment of $45.1 million in the previous year[77] - Goodwill impairment recorded for the nine-month period ended February 23, 2025, is $117.1 million[77] Product Management Challenges - Product recall net costs for the nine-month period are $(30.7) million, reflecting ongoing challenges in product management[77]

Core Viewpoint - General Mills is expected to report a decline in quarterly earnings and revenues, with analysts predicting earnings of $0.95 per share, an 18.8% decrease year-over-year, and revenues of $4.96 billion, a 2.8% decrease compared to the same period last year [1]. Earnings Estimates - The consensus EPS estimate for the quarter has been adjusted downward by 2.4% over the past 30 days, indicating a reassessment by analysts [2]. - Changes in earnings estimates are crucial for predicting investor reactions, as empirical research shows a strong correlation between earnings estimate revisions and short-term stock performance [3]. Key Metrics Forecast - Analysts forecast 'Net Sales- North America Foodservice' to reach $576.36 million, reflecting a year-over-year increase of 4.5% [5]. - 'Net Sales- International' is expected to be $686.85 million, indicating a 1% year-over-year increase [5]. - 'Net Sales- North America Pet' is projected at $636.11 million, showing a 1.9% increase year-over-year [5]. - 'Net Sales- North America Retail' is anticipated to be $3.07 billion, representing a 5.3% decrease from the previous year [6]. Operating Profit Estimates - 'Operating Profit- North America Retail' is expected to be $671.69 million, down from $752.20 million year-over-year [6]. - 'Operating Profit- International' is projected at $20.31 million, an increase from $18.20 million in the same quarter last year [7]. - 'Operating Profit- North America Pet' is forecasted to reach $131.74 million, compared to $128.30 million in the same quarter of the previous year [7]. - 'Operating Profit- North America Foodservice' is expected to be $88.74 million, up from $81.70 million in the same quarter last year [8]. Stock Performance - General Mills shares have increased by 0.5% over the past month, contrasting with a -9.6% change in the Zacks S&P 500 composite [9]. - The company holds a Zacks Rank 3 (Hold), indicating it is expected to closely follow overall market performance in the near term [9].

Core Viewpoint - The individual expresses a strong preference for fundamental analysis over technical analysis in evaluating companies, emphasizing the importance of actual results rather than price movements [1] Group 1: Investment Focus - The individual primarily invests in stocks and ETFs, with a preference for US companies, while also analyzing European and Chinese companies [1] - Investments are approached with a long-term perspective, often taking a contrarian view [1] Group 2: Sector Interest - The banking sector is highlighted as a key area of interest, viewed as fundamental for understanding the health of an economy [1] - There is a noted interest in macroeconomics, indicating a broader perspective on economic factors influencing investments [1]

Group 1 - Stocks began the week lower due to investor concerns regarding the health of the AI trade, although four of the S&P 500's 11 sectors were rising, particularly healthcare and consumer staples, which were up more than 1% [1] - Over 50 stocks increased by more than 2%, including telecommunications shares boosted by AT&T's positive earnings report and staples companies like Kraft Heinz, JM Smucker, and General Mills [2] - The S&P's information technology sector was the largest decliner, down 5%, with significant drops in stocks such as Constellation Energy and Nvidia, both experiencing double-digit percentage declines [3] Group 2 - Major tech companies, including Apple, Microsoft, and Meta Platforms, are scheduled to report quarterly results soon, and the current market volatility may impact the questions their executives will face [4] - The CNBC's Magnificent 7 index, which includes Meta and Nvidia, was recently down about 3%, reflecting the broader market concerns [4]

Group 1: Market Overview - The new Trump administration is expected to negatively impact returns for investors who rely on index funds like the SPDR S&P 500 ETF Trust (SPY), indicating a shift towards a stock picker's market [1][2] - SPY holders are at a disadvantage as they cannot adjust their holdings in response to market changes, leading to potential losses as underperforming stocks offset gains [2] Group 2: Food Stocks - The appointment of RFK Jr. as head of the Health and Human Services department is seen as a negative for food stocks such as General Mills (GIS) and Kraft-Heinz Co. (KHC), which have already experienced declines since Election Day [4][5] - General Mills has shown a slowdown in dividend growth, with only a penny increase last year, while McDonald's (MCD) has a high dividend payout ratio of 73% of free cash flow, raising concerns about future growth [5][6] - Kraft-Heinz's high dividend yield of 5.6% is misleading due to a significant drop in stock price over the past decade, and its dividend cut in early 2019 further exemplifies the risks associated with its dividend policy [6][7] Group 3: Companies with China Exposure - Companies with significant exposure to China, such as Mattel (MAT) and Hasbro (HAS), are expected to face challenges due to impending higher tariffs and demographic shifts leading to fewer births [9][10] - Mattel has been reducing its reliance on China, but still sources about 50% of its products from there, while Hasbro aims to cut its Chinese sourcing from 40% to 20% over four years [11][12] - Hasbro's consumer-products segment, which generates 67% of its sales, has seen a 10% drop in revenue, indicating potential struggles ahead [12][13] Group 4: Vail Resorts - Vail Resorts (MTN) has a high dividend yield of 4.8%, but its payout ratio has exceeded 100% of free cash flow, raising sustainability concerns [15][16] - Management's decision to deny wage increases to ski patrollers led to negative publicity and a decline in share price, further eroding investor confidence [17][18]

Core Insights - The snacking industry is experiencing steady growth driven by lifestyle changes and consumer preferences for convenient, innovative, and health-focused options [6][11] - Companies like Mondelez, PepsiCo, and General Mills are well-positioned to capitalize on these trends and are expected to thrive in 2025 and beyond [5][12] Company Summaries - Mondelez International, Inc. (MDLZ) is innovating with products that combine indulgence and wellness, such as plant-based protein snacks and premium chocolate lines, while expanding its portfolio through acquisitions of wellness-focused brands. The Zacks Consensus Estimate for MDLZ's 2024 and 2025 sales is $36.6 billion and $38 billion, indicating year-over-year growth of 1.6% and 3.8% [3][13] - PepsiCo, Inc. (PEP) has a strong snack portfolio with brands like Lay's and Doritos, and is adapting to market trends by expanding its "Better for You" product line. The consensus estimates for PEP's 2024 and 2025 sales are $92.1 billion and $94.8 billion, suggesting year-over-year increases of approximately 7% and 5.4% [4][9] - General Mills, Inc. (GIS) is focusing on innovation and localized flavors to tap into snacking growth in emerging markets. The Zacks Consensus Estimate for GIS's fiscal 2025 sales is nearly $20 billion, reflecting a year-over-year increase of 0.8% [10][14] Industry Trends - The rise of e-commerce is transforming how snacks reach consumers, with personalized snack boxes and online-exclusive products becoming popular [2] - There is a growing demand for snacks that offer health benefits, leading to a surge in plant-based and nutrient-rich options [11] - Convenience remains a key factor, with single-serve packages and resealable multipacks becoming staples for busy consumers [7]

Financial Performance - In the second quarter of fiscal 2025, net sales increased by 2% to $5,240.1 million, while organic net sales grew by 1% compared to the same period last year [100]. - Operating profit for the second quarter rose by 33% to $1,078 million, with an operating profit margin of 20.6%, an increase of 480 basis points [100]. - Diluted earnings per share increased by 39% to $1.42, while adjusted diluted earnings per share rose by 12% on a constant-currency basis to $1.40 [100]. - For the six-month period ended November 24, 2024, net sales were flat at $10,088.2 million, with organic net sales growth also flat [114]. - Segment operating profit decreased by 3% to $1,608 million for the six-month period ended November 24, 2024, compared to $1,658 million in the same period in fiscal 2024 [132]. - The operating profit as reported for the quarter ended November 24, 2024, was $1,077.9 million, representing a 20.6% margin compared to $811.8 million and 15.8% margin for the same quarter in 2023 [187]. - Adjusted operating profit for the six-month period ended November 24, 2024, was $1,929.3 million, or 19.1% of net sales, compared to $1,888.4 million and 18.8% for the same period in 2023 [187]. - Adjusted operating profit for the same quarter was $1,064.0 million, reflecting an 8% growth compared to $989.4 million in the prior year [190]. - After-tax earnings from joint ventures increased to $30 million, a 25% rise compared to $24 million in the same period last year [111]. - After-tax earnings from joint ventures increased to $49 million for the six-month period ended November 24, 2024, compared to $48 million in the same period in fiscal 2024, reflecting a 5% increase on a constant-currency basis [124]. Expenses and Costs - SG&A expenses increased by $22 million to $852 million, primarily due to higher compensation and benefits expenses and the addition of a pet food business in Europe [106]. - Cost of sales decreased by $64 million to $3,309 million, driven by a reduction in product rate and mix [105]. - SG&A expenses increased by $37 million to $1,707 million for the six-month period ended November 24, 2024, primarily due to higher compensation and benefits expenses [119]. - Cost of sales decreased by $39 million to $6,468 million for the six-month period ended November 24, 2024, compared to the same period in fiscal 2024 [118]. - Restructuring, impairment, and other exit costs totaled $3 million for the six-month period ended November 24, 2024, a significant decrease from $125 million in the same period last year [120]. Tax and Earnings - The effective tax rate for the second quarter of fiscal 2025 was 20.1%, up from 19.0% in the same period last year [109]. - The effective tax rate for the six-month period ended November 24, 2024, was 20.9%, an increase from 20.0% in the same period last year [122]. - The effective tax rate as reported was 20.1% for the quarter, compared to 19.0% in the same quarter last year [203]. Cash Flow and Debt - Cash provided by operations was $1,775 million for the six-month period ended November 24, 2024, compared to $1,496 million in the same period last year, reflecting a $279 million increase [158]. - Cash used by investing activities was $306 million for the six-month period ended November 24, 2024, compared to $316 million in the same period last year [159]. - As of November 24, 2024, the company had $442 million of cash and cash equivalents in foreign jurisdictions [161]. - The company had $1,822 million of long-term debt maturing in the next 12 months, including $800 million of fixed-rate notes due April 17, 2025 [164]. - Total committed and uncommitted credit facilities available as of November 24, 2024, amounted to $3.4 billion [162]. Market Performance - North America Retail net sales decreased by 1% in the six-month period ended November 24, 2024, driven by a decrease in contributions from volume growth [127]. - International net sales increased by 1% in the six-month period ended November 24, 2024, driven by an increase in contributions from volume growth [135]. - North America Pet net sales increased 5% to $595.8 million in Q2 fiscal 2025 compared to $569.3 million in Q2 fiscal 2024, driven by volume growth [141]. - North America Foodservice net sales rose 8% to $630.0 million in Q2 fiscal 2025, compared to $582.0 million in Q2 fiscal 2024, driven by volume growth and favorable net price realization [148]. Strategic Focus - The company plans to focus on product innovation and brand-building investments in fiscal 2025 to drive volume performance [99]. - The company expects to generate higher levels of Holistic Margin Management (HMM) cost savings to offset input cost inflation in fiscal 2025 [99]. - The company is committed to strategic revenue management to enhance net price realization and optimize product mix [224]. - The company is actively engaged in product development and innovation to meet changing consumer demands [231]. - Future results may be influenced by supply chain disruptions, competitive dynamics, and consumer acceptance of new products [231]. Risk Management - The company emphasizes the importance of managing risks related to interest rates, foreign exchange, commodities, and equity markets [233]. - The estimated maximum potential value-at-risk for interest rate instruments is $47 million, reflecting a decrease of $6 million due to lower interest rates [234]. - The foreign currency instruments show a potential loss of $37 million, with an increase of $7 million attributed to a rise in portfolio basis [234]. - Commodity instruments have a potential loss of $4 million, with a minor change of $1 million [234]. - Equity instruments indicate a potential loss of $2 million, with no significant change reported [234].