General Mills (NYSE:GIS) traded down 0.143% during midday trading on Wednesday, reaching $56.709. Although the stock is flat on Tuesday, the company reported good earnings of 79 cents a share, 10 cents per share ahead of analysts’ expectations, said Cramer, the co-manager of the Action Alerts PLUS portfolio, said on CNBC’s “Mad Dash” segment. On a constant-currency basis, first-quarter adjusted diluted EPS increased 36 percent.
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Earnings, adjusted for restructuring costs and non-recurring costs, came to 79 cents per share. “We remain focused on generating sustainable topline growth by expanding the impact of our Consumer First strategy while we continue to increase our efficiency and improve our margins”. The top line marginally missed the Zacks Consensus Estimate of $4.23 billion. Global Segment Results First-quarter net sales for General Mills’ consolidated worldwide businesses increased 5 percent in constant currency.
Big USA food producers have been shifting gears as the American palate on the move.
The company over the past year or so has undergone several rounds of cost cutting, shaving off tens of millions in expenses and shedding at least 2,500 jobs.
The company booked $52 million in restructuring charges related to the effort in the quarter. Advertising and media costs decreased 5%.
Gross margin rate improved during the quarter off an easy compare as cost-cutting offset some sales deleverage.
The adjusted effective tax rate was 32.3%, same as in the prior-year quarter.
The USA cereal-to-meal solutions group reported a 20% rise in segment operating profit, which jumped to US$826m. Pound volume contributed 1 point of net sales growth, and net price realization and mix added 3 points of growth.
In terms of outlook, General Mills reiterated its full-year growth targets for 2016, which now exclude any impact from the proposed Green Giant divestiture. Lower demand for cereals due to competitive pressures from alternatives like yogurt, eggs, bread and peanut butter are hurting category growth. The Business is organized into three operating sections: U.S. Retail, International, and Convenience Stores and Foodservice.
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On a constant currency basis, worldwide sales rose 5% supported by gains across all the regions – Latin America, Asia-Pacific, Europe and Canada. The company had a trading volume of 4,187,241 shares. Segment operating profit declined 9% year over year to $80 million due to hard year-ago comparisons when constant currency profits increased 18%. ( BGS ) for $765 million in cash, agreed upon in early September. The transaction, which is subject to regulatory approval, is expected to close by the end of the calendar year. The company also projects net sales in constant currency to essentially match the 2015 levels of $17.63 billion that included a 53rd week.
