General Mills Faces Mixed Q1 Results: Earnings Win, Sales Drop, And Big Bets On 2025 Rebound

General Mills, Inc. GIS shares are trading marginally lower on Wednesday.

The company reported first-quarter adjusted earnings per share of $1.07 (down 2%), beating the street view of $1.06. Quarterly revenues of $4.85 billion outpaced the analyst consensus estimate of $4.801 billion.

The quarterly earnings were affected by lower adjusted operating profit, higher net interest expense, and a higher adjusted effective tax rate.

Net sales fell by 1%, while organic net sales also decreased by 1%, driven by unfavorable organic net price realization and mix.

“We strengthened our core by delivering more remarkable experiences to consumers, which translated into improved volume, net sales, and market share trends versus the previous quarter,” said General Mills Chairman and Chief Executive Officer Jeff Harmening.

Also Read: General Mills Offloads US, Canadian Yogurt Divisions In $2.1B Deal Amid Competition And Market Challenges: Details

Operating profit fell to $832 million, representing an 11% decrease, and adjusted operating profit was $865 million, down 4% when measured in constant currency.

Adjusted gross margin of 35.4% of net sales essentially matched year-ago results, with benefits from HMM cost savings offset by input cost inflation and unfavorable net price realization and mix.

General Mills recently announced that it has entered into definitive agreements to sell its North American Yogurt business to Lactalis and Sodiaal, two leading French dairy companies, in cash transactions valued at an aggregate $2.1 billion. 

Outlook: General Mills has reaffirmed its financial targets for fiscal 2025, expecting organic net sales to range from flat to an increase of 1%, while adjusted diluted EPS is anticipated to fluctuate between a decrease of 1% and an increase of 1% in constant currency.

General Mills expects volume trends in its categories will gradually improve in fiscal 2025, though full-year category dollar growth is expected to be below the company’s long-term growth projections.

The company said it expects to reinvest potential margin flexibility back into the business, including plans for a significant increase in brand-building investment in fiscal 2025 to drive improved volume performance.

Price Action: GIS shares are trading lower by 1.34% to $73.50 premarket at last check Wednesday.

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