Saporu is ‘part of the bears’ on General Mills after its Q2 earnings

December 21, 2023 02:49 AM AEDT | By Invezz

Saporu is ‘part of the bears’ on General Mills after its Q2 earnings — Image source: Invezz

General Mills stock down on lowered guidance

The stock is trending down at writing also because the processed consumer foods company trimmed its sales outlook for the full year citing lacklustre recovery in volumes.

General Mills now forecasts its organic sales to remain flat or be down 1.0% in fiscal 2024. Its previous guidance was for up to 4.0% growth. Delano Saporu of New Street Advisors recently said on CNBC’s “The Exchange”:

I’m part of the bears on this one. For them, consumer is weakening. Price increases are not going to be able to make up for [decline in volume].

The multinational expects increase in its adjusted per-share earnings to now be capped at 5.0% this year versus 6.0% it had guided for earlier. General Mills stock is currently down close to 30% versus its year-to-date high.

Watch here: https://www.youtube.com/embed/yQzatjblD3Y?feature=oembed

Notable figures in General Mills Q2 earnings

Earned $595.5 million versus the year-ago $605.9 million
Per-share earnings still inched up to $1.02 from $1.01
Adjusted EPS printed at $1.25 as per the press release
Sales declined 1.6% year-over-year to $5.14 billion
Consensus was $1.16 a share on $5.35 billion in sales
Volume fell 4.0% while prices gained 3.0% in Q2

Other notable figures in the earnings report include a 2.0% decline in retail sales (North America) and a 4.0% decline in pet sales. Nik Modi – an RBC Capital Markets analyst also reiterated his “hold” rating on General Mills stock ahead of the earnings and said:

Expectations are low given tough operating environment for packaged food players. While pricing benefit is decreasing, volumes are only marginally improving in scanner data for General Mills.

General Mills is known as a consumer staple company, they make cereal, frozen foods, and pet food.
Their only source of revenue gains came from price increases.
This is a very common theme in #bidenomics. pic.twitter.com/5bGmI9nWWr
— Frog Capital (@FrogNews) December 20, 2023

The post Saporu is 'part of the bears' on General Mills after its Q2 earnings appeared first on Invezz

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