General Mills, Inc. recently released its fourth-quarter earnings, which were met with mixed reactions from investors. While the company exceeded Wall Street’s earnings per share expectations by a cent, it fell short on revenue targets. The food giant reported adjusted earnings per share of $1.01, slightly higher than the analyst consensus of $1.00. However, revenue for the quarter came in at $4.71 billion, missing the consensus estimate of $4.86 billion. This discrepancy led to a 4% decline in the company’s shares, as investors reacted to the revenue miss and a cautious sales outlook for fiscal 2025.
Challenges Amid an Uncertain Economic Environment
General Mills is facing challenges in navigating an uncertain economic environment, with the anticipation of gradual improvements in volume trends. The company expects organic net sales to be flat to up 1 percent as it aims to drive growth through innovation and increased brand-building investment. Despite these efforts, General Mills projects that adjusted operating profit will be down 2 percent to flat in constant currency from the $3.6 billion reported in fiscal 2024. CEO Jeff Harmening emphasized the company’s resilience and efficiency in overcoming these challenges in fiscal 2024, highlighting the need to pivot plans and enhance efficiency to meet updated guidance.
Fourth Quarter Performance and Future Outlook
In the reported fourth quarter, General Mills experienced a 6 percent decline in net sales to $4.7 billion, with organic net sales also down by the same percentage. The company’s adjusted operating profit of $800 million was down 10 percent in constant currency, mainly due to lower adjusted gross profit dollars. Looking ahead, General Mills outlined its fiscal 2025 financial targets, expecting organic net sales to range between flat and up 1 percent. Adjusted diluted EPS is projected to range between down 1 percent and up 1 percent in constant currency from the base of $4.52 earned in fiscal 2024. The company also anticipates a free cash flow conversion of at least 95 percent of adjusted after-tax earnings.
General Mills’ Q4 earnings report reflects a challenging operating environment and the need for continued innovation and efficiency to drive growth in the future. The company’s mixed performance in exceeding earnings expectations but falling short on revenue highlights the importance of adapting to evolving economic conditions and consumer preferences. As General Mills looks ahead to fiscal 2025, it will need to focus on executing its strategic initiatives to deliver sustainable growth and value to its shareholders.