GIS Beats Q2 Earnings Estimates, Updates View on Higher Investments

Core Insights - General Mills, Inc. (GIS) reported strong second-quarter fiscal 2025 results, with both top and bottom lines exceeding Zacks Consensus Estimates [1][3][4] Financial Performance - Adjusted earnings per share (EPS) reached $1.40, surpassing the Zacks Consensus Estimate of$1.22, reflecting a 12% year-over-year growth on a constant-currency basis [3] - Net sales amounted to $5,240.1 million, exceeding the Zacks Consensus Estimate of$5,157 million, with a 2% year-over-year increase driven by higher pound volume [4] - Adjusted gross margin expanded by 130 basis points to 36.3%, supported by cost savings from Holistic Margin Management, despite input cost inflation [5] - Adjusted operating profit was $1,064 million, a 7$3,321.5 million, with organic net sales rising 1% [6] - International segment revenues increased by 1% to $690.6 million, but organic net sales fell by 3$595.8 million, with a 36% increase in operating profit [8] - North America Foodservice segment revenues advanced by 8% to $630 million, with organic net sales also jumping 8$1,774.7 million in cash from operating activities in the first half of fiscal 2025, with capital investments of $301 million [11] - The company paid out$676 million in dividends and repurchased nearly 9 million shares for $600 million during the same period [12] Future Outlook - For fiscal 2025, organic net sales are expected to range from flat to a 1% increase, with management adjusting guidance due to higher promotional investments [15] - Adjusted operating profit is anticipated to decline by 4-2% at constant currency, with adjusted EPS expected to decline by 3-1% [16] - The company aims for a free cash flow conversion of at least 95% of adjusted after-tax earnings [16]