What to Expect from General Mills in Fiscal 4Q17

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Part 2
What to Expect from General Mills in Fiscal 4Q17 PART 2 OF 6

Can GIS Beat Analysts’ EPS Expectation in Fiscal 4Q17?

What analysts expect

General Mills (GIS) is scheduled to report its fiscal 4Q17 results on Wednesday, June 28, 2017. On average, analysts expect the company to post adjusted EPS (earnings per share) of $0.71, representing a YoY (year-over-year) rise of 7.6% compared to 4Q16. The company has outpaced analysts’ earnings expectations in three of the past four quarters.

Can GIS Beat Analysts&#8217; EPS Expectation in Fiscal 4Q17?

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A look at last quarter

General Mills’ fiscal 3Q17 results benefited from its cost-saving initiatives, which more than offset the impact of the fall in volumes. The company posted adjusted EPS of $0.72, which exceeded analysts’ estimate and rose 10.8% YoY. The company’s adjusted EPS also got a boost from a lower effective tax rate. In comparison, Kellogg (K), Kraft Heinz (KHC), and Hershey (HSY) saw strong EPS growth as tighter cost-control measures supported their bottom-line growth.

Cost savings to boost bottom-line growth

Although GIS management expects sequential improvement in its upcoming quarter, the company’s top line is projected to remain muted, which will negatively impact its bottom-line growth. However, its fiscal 4Q17 adjusted EPS is forecast to benefit from the company’s cost-saving initiatives, which are expected to offset the impact of volume deleverage and input cost inflation. Going forward, management has guided for a 5.0%–7.0% improvement in adjusted EPS for fiscal 2017 on a currency neutral basis.


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