General Mills Prepares for Third-Quarter Results Amid Stock Struggles

Analysts Predict Profit Decline as Fiscal Year Projections Weigh In

Minneapolis, Minnesota-based General Mills, Inc. (GIS) stands as a prominent manufacturer and marketer of branded consumer foods. The company operates through distinct segments: North America Retail, International, Pet, and North America Foodservice. With a market cap nearing $34 billion, General Mills boasts an impressive portfolio of over 100 brands.

Expected to report its third-quarter results on Wednesday, March 19, analysts predict a non-GAAP profit of $0.99 per share, reflecting a 15.4% decrease from the $1.17 per share reported in the same quarter last year. Despite the anticipated decline, General Mills has established a strong track record, surpassing analysts’ earnings expectations for four consecutive quarters. Last quarter, the adjusted earnings per share (EPS) increased by 12% year-over-year to $1.40, exceeding consensus estimates by 14.8%.

Looking ahead to fiscal 2025, General Mills is expected to report an adjusted EPS of $4.42, a decline of 2.2% from the $4.52 recorded in fiscal 2024. However, forecasts indicate a rebound in 2026 with projected earnings growth of 3.9% year-over-year, bringing EPS to $4.59.

Over the past year, General Mills’ stock has fallen by 7.3%, lagging behind the Consumer Staples Select Sector SPDR Fund’s (XLP) 8.4% returns and the S&P 500 Index’s ($SPX) notable 24.1% increase.

Following a better-than-anticipated Q2 report on December 18, General Mills still saw its stock prices drop by 3.1%. The company reported net sales of $5.2 billion, an increase of nearly 2% year-over-year, which surpassed Wall Street’s expectations by a significant 1.6%. Furthermore, non-GAAP operating profits increased 7.5% year-over-year to $1.1 billion, also exceeding analysts’ forecasts.

However, these positive results were impacted by a rise in retailer inventory in the North America Retail segment. This increase resulted partially from the Thanksgiving holiday moving from the final week of the second quarter of fiscal 2024 to the first week of the third quarter of fiscal 2025, along with favorable trade and expense timing. These factors are projected to reverse in the latter half of fiscal 2025.

The overall sentiment on GIS stock remains moderately optimistic, reflected in a “Moderate Buy” rating. Of the 18 analysts monitoring the stock, five recommend a “Strong Buy,” while 13 suggest a “Hold.” The mean price target stands at $69.83, indicating a potential upside of 16.8% from current levels.

On the date of publication, Aditya Sarawgi did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For further details, please view the Barchart Disclosure Policy here.

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