To The Moon

$General Mills(GIS)$ is expected to release the fiscal Q3 2025 earnings result on 19 March 2025 before the market open.

The revenue is estimated to come in at $4.96 billion, which would be a decrease of 2.8% compared to same period last year.

The consensus EPS estimate for the earnings per share is expected to come in at 96 cents per share which would be a decline of 18.8% compared to the same period last year.

General Mills Inc (GIS) Last Neutral Earnings Call Saw A Decline Of 6.65% In Share Price

GIS gave a neutral earnings call on 18 Dec 2024 which saw its share price decline by 6.65% since.

The earnings call presented a mixed outlook with notable achievements in the cereal and pet segments, but challenges in profit outlook and specific international markets like China. Increased investments are expected to impact short-term profitability, yet they are seen as necessary for long-term growth.

General Mills Inc (GIS) Guidance

During the General Mills Q2 2025 earnings call, the guidance emphasized the company's strategic focus on accelerating organic sales growth and improving volume growth by enhancing market share. This initiative was supported by increased investments in the business, including product renovation, brand building, and promotional support, which were above the original plan due to sustained value-seeking behavior among consumers. The company reported progress in various segments, such as a return to growth in the Blue Buffalo Pet Food business and U.S. cereal market share growth. Despite these improvements, challenges remain in specific areas like U.S. refrigerated dough, prompting adjustments to ensure better consumer value.

The increased investment is expected to impact profit outlooks for the latter half of the year, but management remains confident that these steps will set the stage for stronger growth in fiscal 2026 and beyond.

Key metrics include a revised input cost inflation guidance of 4%, an expected 5% HMM (Holistic Margin Management) productivity target, and an 8-point decline in operating profit for the back half of the fiscal year.

Key Metrics To Watch For General Mills Inc (GIS) Earnings

Revenue & Earnings

YoY/QoQ Trends: In fiscal Q2 2025, Blue Buffalo Pet Food business returned to growth, with high single-digit growth in its Life Protection Formula. The company expects to see growth in the Wilderness line in the back half of the year. The Food Service segment has been performing well, particularly in K-12 schools, showcasing General Mills' ability to effectively navigate regulatory environments and adapt to changing standards.

EPS vs. Estimates: Beating consensus estimates (e.g., adjusted EPS) typically boosts investor confidence, while misses could signal underlying challenges.

1. Margin Analysis: In fiscal Q2 2025, increased investments in promotions and renovations have impacted profit outlook for the back half of the year. The company expects a reversal of 6-point operating profit benefits in the second half.

2. Guidance:

   Updated FY2025 guidance is critical. Upward revisions suggest optimism (e.g., stronger demand, cost controls), while downward adjustments may flag macro pressures (inflation, weak demand). Key metrics include a revised input cost inflation guidance of 4%, an expected 5% HMM (Holistic Margin Management) productivity target, and an 8-point decline in operating profit for the back half of the fiscal year.

Contextual Drivers

1. Consumer Behavior:

   Inflationary pressures may drive shifts to private-label products, affecting GIS’s pricing power. Häagen-Dazs retail stores in China faced double-digit decline in sales. General Mills is reviewing its store footprint and focusing more on retail and food service channels. General Mills' U.S. cereal business returned to pound share growth with successful brand campaigns and innovation. The company saw significant improvements in share trends for food snacks, Mexican foods, soups, snack bars, and food service channels.

2. Operational Factors:

   Supply chain stability and input cost trends (e.g., moderating commodity prices) could influence profitability.

   International performance: Currency headwinds (strong USD) might dampen international revenue, while emerging market growth could offset softness in developed regions. The company raised its input cost inflation outlook for the year to 4%, noting pressure points in packaging, dairy, and sugar, as well as labor-related conversion costs.

3. Strategic Initiatives:

   Innovation (e.g., plant-based products, gluten-free lines) and M&A activity (e.g., acquisitions in high-growth niches) as growth drivers.

   ESG efforts: Progress in sustainability goals (e.g., regenerative agriculture, packaging recyclability) may align with investor priorities.

Competitive & Macro Landscape

Peer Comparison: Contrast GIS’s results with peers like Kellanova (K), Kraft Heinz (KHC), or Mondelez (MDLZ). Sector-wide volume declines vs. GIS-specific issues (e.g., market share losses) would inform outlook.

Economic Factors: Interest rates impacting debt costs (leverage ratio) and consumer spending patterns (recession risks).

General Mills Inc (GIS) Price Target

Based on 15 Wall Street analysts offering 12 month price targets for General Mills Inc in the last 3 months. The average price target is $65.36 with a high forecast of $71.00 and a low forecast of $58.00. The average price target represents a 7.25% change from the last price of $60.94.

If we were to look at how GIS share price have moved after its quarterly earnings result, there are some metrics we might want to look at :

Strategic Priorities: Focus on cost optimization (e.g., "Holistic Margin Management"), digital sales growth, or portfolio reshaping (divesting low-margin brands).

Risks Highlighted: Management may cite persistent inflation, labor costs, or geopolitical disruptions affecting operations.

These could cause volatile movement on GIS share price.

Technical Analysis - Exponential Moving Average (EMA)

From the technicals, we are seeing that GIS bulls is trying for a daily uptrend with the market bounce happening, but it has not been successful, though RSI is showing that momentum is building up, and there might be a potential crossover of RSI over the RSI MA.

GIS need to clear the 50-EMA which has intersect with 12-EMA, if GIS can gather investor sentiment and push above the 50-day level, we could see the bulls gaining control and make a daily uptrend expansion.

Here is how GIS might move in a bullish sentiment or go downside in a bearish setting.

Bull Case: Earnings beat, raised guidance, strong organic growth in premium/health segments, and margin expansion. Stock rallies on confidence in turnaround.

Bear Case: Missed EPS/revenue, lowered guidance, volume declines, and rising debt. Shares drop on concerns over competitive pressures.

Summary

If results show resilience in margins, strategic category growth, and stable guidance, GIS could be viewed as a defensive play amid economic uncertainty. Conversely, weak volumes or margin compression might raise concerns about its ability to navigate a tough consumer environment.

If we were to look at how GIS had performed in the previous quarter, the strong organic growth in premium might be the largest contributor to a better-than-expected earnings.

Appreciate if you could share your thoughts in the comment section whether you think GIS would be able to provide a better-than-expected earnings.

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.