General Mills, Inc.
On Wednesday, the company reported a third-quarter sales decrease of 5% year-on-year to $4.84 billion, missing the analyst consensus estimate of $4.96 billion. Organic net sales were down 5%.
North America Retail segment sales declined 7% to $3 billion. North America Pet segment sales remained flat Y/Y at $624 million, while International segment sales decreased 4% to $651 million.
Adjusted EPS of $1.00 beat the consensus estimate of $0.96.
Gross margin expanded 40 basis points Y/Y to 33.9%. Adjusted gross margin down 60 basis points to 33.4%.
Operating margin expanded 50 basis points to 18.4%, and operating income for the quarter decreased 2% to $891 million.
General Mills held $521.3 million in cash and equivalents as of February 23, 2025. Operating cash flow for nine months totaled $2.3 billion.
General Mills repurchased about 14 million shares of common stock through nine months of fiscal 2025 for a total of $902 million.
"Our third-quarter organic net sales finished below our expectations, driven largely by greater-than-expected retailer inventory headwinds and a slowdown in snacking categories," said Chairman and CEO Jeff Harmening.
Outlook: General Mills expects macroeconomic uncertainty to continue to impact consumers in the fourth quarter. Also, the company plans to make investments in the fourth quarter in advance of significant fiscal 2026 new product launches.
The company now expects FY25 organic net sales to be down 2% to down 1.5%, compared to the previous expectation of the lower end of the range of between flat and up 1%.
Also, the company now expects adjusted operating profit and adjusted EPS to be down 8% to down 7% in constant currency, compared to the previous ranges of between down 4% and down 2% in constant currency, reflecting lower net sales. This guidance does not include any impact from new tariff actions in 2025.
In addition, the company has commenced a review of expected cost-savings initiatives that target savings of at least $100 million in fiscal 2026.
Price Action: GIS shares are trading lower by 3.29% at $58.42 in premarket at last check Wednesday.
