General Mills beats Q1 sales, adjusted EPS estimates

Overview

• General Mills fiscal Q1 net sales down 7% to $4.5 bln, but beats analysts' estimates

• Adjusted EPS of $0.86 beats analyst expectations, despite 20% decline in constant currency

• Company aims to restore organic sales growth through investments in value and innovation

Outlook

• Company reaffirms FY2026 organic net sales to range from -1% to +1%

• General Mills expects FY2026 adjusted EPS to decline 10-15% in constant currency

• Company sees FY2026 adjusted operating profit down 10-15% in constant currency

• Net impact of divestitures and acquisitions to reduce FY2026 sales growth by ~4%

Result Drivers

• DIVESTITURES IMPACT - Net sales down 7% due to divestitures, with a 4-point headwind, impacted by divestitures and acqusitions

• PRICE INVESTMENTS - Unfavorable price realization and mix in North America Retail led to a decline in organic net sales

• YOGURT DIVESTITURE GAIN - Operating profit increased 108% due to a $1.05 bln gain from U.S. yogurt divestiture

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "hold" and the breakdown of recommendations is 4 "strong buy" or "buy", 15 "hold" and 3 "sell" or "strong sell"

• The average consensus recommendation for the food processing peer group is "hold"

• Wall Street's median 12-month price target for General Mills Inc is $54.00, about 8.2% above its September 16 closing price of $49.56

• The stock recently traded at 13 times the next 12-month earnings vs. a P/E of 13 three months ago

Press Release: ID:nBw8JxZJKa