Why Is General Mills (GIS) Up 3.3% Since Last Earnings Report?

Core Viewpoint - General Mills reported mixed results in its Q4 fiscal 2024 earnings, with adjusted earnings per share beating estimates but showing a year-over-year decline, raising questions about future performance as the company faces challenges in sales and margins [2][5]. Financial Performance - Adjusted earnings per share for Q4 fiscal 2024 were $1.10, exceeding the Zacks Consensus Estimate of $0.99, but down 10% year-over-year on a constant-currency basis [2]. - Net sales totaled $4,713.9 million, falling short of the Zacks Consensus Estimate of $4,873 million, and decreased by 6% due to adverse net price realization and reduced pound volume [2]. - Organic net sales declined by 6%, attributed to lower retailer inventory and international unit hurdles [2]. Margin Analysis - Adjusted gross margin contracted by 10 basis points to 34.9%, influenced by input cost inflation and supply chain issues, partially offset by cost savings [3]. - Adjusted operating profit was $800 million, down 10% year-over-year, with the operating profit margin contracting by 70 basis points to 17% [3]. Segment Performance - North America Retail revenues were $2,853.3 million, down 7% year-over-year, with organic net sales also declining by 7% [3]. - International segment revenues decreased by 10% to $667.5 million, with organic net sales also falling by 10% due to challenges in China and Brazil [4]. - Pet segment revenues were $602.1 million, down 8% year-over-year, while North America Foodservice revenues increased by 4% to $589 million, driven by growth in specific product categories [4]. Shareholder Returns and Guidance - The company paid out $1.4 billion in dividends and repurchased nearly 29 million shares for $2 billion in fiscal 2024, with a 2% increase in quarterly dividends announced [5]. - For fiscal 2025, General Mills anticipates organic net sales growth between flat and 1%, with adjusted operating profit growth expected to decline by 2% or remain flat [6]. Market Outlook - Estimates for General Mills have trended downward, with a consensus estimate shift of -7.92% [7]. - The stock currently holds a Zacks Rank 4 (Sell), indicating expectations of below-average returns in the coming months [9].