General Mills Anticipates Slight Earnings Drop in Upcoming Q2 Report
Investors Eye Analyst Expectations Amid Market Challenges
General Mills, Inc. (GIS) is valued at a market cap of $38.1 billion and is known for producing a range of branded consumer foods available in retail stores. This Minnesota-based company focuses on various product categories, including ready-to-eat cereals, convenient meals, snacks, yogurt, super-premium ice creams, baking mixes, and essential ingredients. On Wednesday, December 18, GIS is set to announce its fiscal Q2 earnings results.
Analysts anticipate that the company will report a profit of $1.22 per share, reflecting a 2.4% decrease from the $1.25 per share reported in the same quarter last year. Notably, GIS has consistently exceeded Wall Street’s earnings expectations over the past four quarters. In Q1 2025, the company posted an adjusted EPS of $1.07, which was 1.9% higher than the consensus, although this figure fell by 2% when adjusted for constant currency. This drop can be attributed to rising expenses and shrinking margins, largely driven by inflation in input costs and increased selling, general, and administrative (SG&A) expenses.
For the full fiscal year 2025, analysts project an EPS of $4.51, slightly down from $4.52 in fiscal 2024. However, looking ahead to fiscal 2026, EPS is expected to grow by 3.1% to reach $4.65.
Year-to-date, GIS shares have increased nearly 4.9%. However, this performance still trails behind the S&P 500 Index’s ($SPX) rise of 21.8% and the Consumer Staples Select Sector SPDR Fund’s (XLP) return of 12.5% during the same time frame.
Several factors have contributed to GIS’s underperformance, including heightened competition within the industry and broader economic challenges, such as inflation. Consumers are increasingly shifting towards value-oriented products, which has led to softer volume trends and rising pricing pressures for the company.
Despite the challenges, GIS saw a small uptick in shares on September 18 following better-than-expected Q1 earnings. The company reported revenue of $4.85 billion, surpassing Wall Street expectations of $4.78 billion, although this figure represented a 1% decline year-over-year, primarily due to unfavorable pricing and mix effects.
The consensus among analysts for General Mills’ stock is cautiously optimistic, reflected in an overall “Moderate Buy” rating. Out of 18 analysts covering GIS, four recommend a “Strong Buy,” while 14 suggest holding the stock. This outlook has improved compared to three months ago when only three analysts had a “Strong Buy” rating.
Currently, the average analyst price target for GIS stands at $74.39, indicating an 8.9% potential upside from its existing levels.
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On the date of publication, Neharika Jain 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 more information please view the Barchart Disclosure Policy here.
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