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General Mills (NYSE:GIS) fell back in early trading on Wednesday after the food manufacturer’s organic sales trends disappointed investors.
Net sales were down 6.4% to $4.71 billion, reflecting unfavorable net price realization/mix and lower pound volume. Those results included a three-point headwind from a comparison against favorable trade expense timing in the prior year, which impacted net price realization and mix. Organic net sales were down 6% to miss the consensus estimate of -3.3%, and slowed from the FQ3 trend. The decline in organic sales was driven by the trade expense timing comparison, a reduction in retailer inventory, and a headwind in international segment results. Volume was 2% lower during the quarter, led by a 6% drop in the North America Retail segment and 7% decline in the Pet segment. Price/mix fell 4% during the quarter, driven lower by a 10% decline in the International segment.
Adjusted gross margin was down 10 basis points in FQ4 to 34.9% of sales. Adjusted operating profit of $800 million was down 10% in constant currency, driven primarily by lower adjusted gross profit dollars, partially offset by lower SG&A expenses. Adjusted operating profit margin was down 70 basis points to 17.0%. Adjusted EPS was reported at $1.01 vs. $1.12 a year ago, driven primarily by lower adjusted operating profit, higher net interest expense, and a higher adjusted effective tax rate, partially offset by lower net shares outstanding. The EPS mark was $0.02 better than the consensus estimate.
The General Mills (GIS) board of directors declared a quarterly dividend of $0.60 per share, payable August 1 to shareholders of record July 10.
“As we move into fiscal 2025, our top priority is to accelerate our organic net sales growth, and specifically our volume growth, by delivering remarkable experiences across our portfolio of leading brands,” stated CEO Jeff Harmening. “We plan to drive another year of strong HMM cost savings, allowing us to reinvest in exciting growth ideas that meet evolving consumer needs,” he added.
General Mills (GIS) expects 2025 organic sales to be 0% to +1% vs. the consensus estimate of +1.2%.
Shares of General Mills (GIS) were down 4.18% premarket to $64.45.