Shares of multinational food company General Mills (GIS) closed 1.5% higher on Wednesday after the company reported better-than-expected financial results for the fourth quarter and fiscal year ended May 30.
The company makes baking ingredients and mixes, yogurt, super-premium ice creams, snacks, ready-to-eat cereals, convenient meals, and refrigerated and frozen dough.
Adjusted earnings per share (EPS) declined 19% year-over-year to $0.91 but beat the Street’s estimates of $0.84.
Quarterly net sales fell 10% year-over-year to $4.5 billion, however, surpassed analysts’ expectations of $4.36 billion.
The North America Retail segment’s net sales decreased 17% year-over-year to $2.6 billion, and net sales of the Pet segment were down 20% to $444 million. (See General Mills stock chart on TipRanks)
Meanwhile, net sales for the Convenience Stores and Foodservice segment grew 25% year-over-year to $493 million, the Europe & Australia segment’s net sales rose 2% to $539 million, and the Asia & Latin America segment’s net sales climbed 17% to $407 million.
For Fiscal 2022, the company expects net sales to decline in the range of 1% – 3% year-over-year due to lower consumer demand. Adjusted diluted EPS is likely to remain flat or fall by 2%.
Chairman and CEO of General Mills Jeff Harmening said, “We enter fiscal year 2022 ready to compete and win in a highly dynamic consumer environment. We’re taking actions to address near-term cost pressures while remaining focused on the long-term growth opportunities we will capture through our Accelerate strategy.”
RBC Capital analyst Nik Modi recently reiterated a Hold rating on the stock with a price target of $65 (6.7% upside potential). The analyst said, “We expect continued elevated demand across geographies as well as improvement in the C-store/foodservice channel.”
Overall, the stock has a Hold consensus rating based on 2 Buys, 3 Holds, and 1 Sell. The average General Mills price target of $62.20 implies 2.1% upside potential from current levels.
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