General Mills Scoops Up Gains As Earnings Beat Expectations - General Mills (NYSE:GIS)

Core Viewpoint - General Mills, Inc. reported fiscal 2026 first-quarter results that exceeded Wall Street expectations, with adjusted earnings per share of 86 cents and revenue of $4.52 billion, slightly above projections [1]. Financial Performance - Adjusted earnings per share of 86 cents surpassed analyst estimates of 81 cents per share [1]. - Revenue for the quarter was $4.52 billion, edging past projections of $4.51 billion [1]. Fiscal Outlook - The company reaffirmed its fiscal 2026 outlook, forecasting a decline in adjusted operating profit and adjusted EPS by 10% to 15% in constant currency [2]. Analyst Insights - RBC Capital Markets analyst Nik Modi maintained an Outperform rating on General Mills with a price target of $63, indicating confidence in the company's ability to navigate a sluggish environment [3]. - Modi noted that the EPS guidance for FY26 provides a cushion for the company despite ongoing price investments [3]. Pricing Strategy - General Mills is adjusting price/value across approximately two-thirds of its portfolio to address price cliffs and gaps, with over half of the adjustments completed in the first quarter [4]. - The management is committed to further pricing moves, which is seen as a positive sign [4]. Growth Drivers - Growth was primarily driven by markets in India, North Asia, and Europe, with improvements noted in China due to minimal impact from closing underperforming Häagen-Dazs stores [4]. Segment Performance - Segment margins benefited from the closure of underperforming stores, while Häagen-Dazs at retail and Wanchi Ferry showed solid growth [5]. Future Initiatives - The management reiterated a target of approximately 5,000 coolers for the fresh pet food rollout by the end of the second quarter, with about 1,000 coolers expected to be in place by the end of September [5]. Sales Projections - Analyst projections for full-year organic sales have been adjusted to a decline of 0.4%, down from a previous estimate of -0.1%, reflecting slightly reduced growth assumptions for the second half of the year [5]. Earnings Growth - The analyst maintains an EPS growth estimate of -14.2%, suggesting that the first-quarter upside may be offset over the remainder of the year [6].