Revenue
Earnings
The consensus estimate for EPS in Q2 2024 is $1.15, which compares to adjusted EPS of $1.10 reported in the prior-year period. In Q1 2024, adjusted EPS dipped 1% to $1.09.
Points to note
In the first quarter, General Mills’ top line benefited from favorable net price realization and mix but this was partly offset by lower pound volume. The company’s segments also benefited from these factors, with sales increasing across most divisions, except Pet.
In the North America Retail segment, the company saw higher retail sales growth for at-home food in Q1, although there was a moderation in pace from the double-digit growth rates seen last fiscal year. GIS expects volume trends in this segment to improve through the rest of the year as pricing moderates.
The Pet segment saw flat sales last quarter as pet parents shifted to more value-oriented products and smaller pack sizes amid economic uncertainty. While sales grew in the dry pet food category, wet pet food and pet treats remained challenged. The company expects the headwinds in the Pet segment to continue through the year. This does not bode well for the second quarter.
Despite challenges in the Pet segment, the pet food trend towards humanization continues and pet parents are seeking healthful products for their pets. To take advantage of this trend and bring health-focused offerings to its portfolio, General Mills is acquiring pet supplement company Fera Pets. Updates on this transaction are worth watching.
General Mills’ execution of its Accelerate strategy to drive profitable growth and shareholder returns by focusing on brand-building, innovation and scale is expected to pay off. The company is prioritizing its core markets, global platforms and local gem brands that are expected to be the most profitable and it is focusing on driving growth by reshaping its portfolio through acquisitions and divestitures.
Higher input costs impacted results last quarter. GIS expects the economic health of consumers, the moderating rate of input cost inflation, and the increasing stability of the supply chain environment to be the biggest factors impacting its performance in FY2024.