General Mills (GIS) shares fell sharply up 5% early Wednesday after the owner of popular brands such as Cheerios, Pillsbury and Nature Valley granola bars reported weaker-than-expected profits and sales for its fiscal fourth quarter as shoppers weary of the inflation were retreating.
Key Points to Remember
- General Mills shares fell nearly 5% in early trading on Wednesday after the company reported weaker-than-expected earnings and sales as prices rose and buyers pulled back.
- General Mills reported net income of $614.9 million, or $1.03 per share, in its fourth fiscal quarter, down 25% from the same quarter last year. last year.
- In its 2024 outlook, the company cited economic conditions, consumer health, moderating inflation and easing supply chain constraints as favorable winds for growth. /li>
The company reported net income of $614.9 million, or $1.03 per share, down 25% from the same quarter last year. Net sales edged up 3% to $5.0 billion, but were lower than forecast at $5.177 billion. Gross margin fell 180 basis points (bps) to 34.4% of net sales as higher input costs weighed on profitability.
By region, sales in North America increased 2% to $3.1 billion and were partially offset by a 1% decline in international sales. Pet food sales increased 7% from the same quarter last year, while organic sales increased 5%. Both segments recorded annual growth of 9%.
In its 2024 outlook, General Mills cited moderating inflation and easing supply chain constraints as tailwinds to growth, and expects continued growth organic sales driven by strong marketing, innovation and in-store support. However, he warned of slowing sales as inflation-weary shoppers cut spending.
General Mills shares are down approximately 2% year-to-date, slightly below a 1% gain for the entire S&P 500 Consumer Staples sector over the same period. br>
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