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General Mills Stock Falls on Weak Fiscal 2Q17 Earnings

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Fiscal 2Q17 performance

General Mills (GIS), a Minneapolis-based consumer food products manufacturing company, reported its fiscal 2Q17 earnings on December 20, 2016. The company posted an adjusted EPS (earnings per share) of $0.85 on revenue of $4.11 billion.

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Market response

Analysts were expecting General Mills to post adjusted EPS of $0.87 on revenues of $4.26 billion. After lower-than-expected sales, the company’s management expects organic net sales for fiscal 2017 to fall 3% to 4%. Before fiscal 2Q17 earnings, the company was expecting sales for fiscal 2017 to fall 0% to 2%. The lower-than-expected fiscal 2Q17 earnings and lowering of fiscal 2017 revenue estimates appear to have made investors skeptical about General Mills’ future earnings. This skepticism has led to a decline in stock price. After the announcement of fiscal 2Q17 earnings on December 20, 2016, the company’s stock price fell 2.6% to $61.5.

Year-to-date performance

Since the beginning of 2016, the company’s share price has returned 8.7%. During the same period, Kellogg (K), B&G Foods (BGS), and Pinnacle Foods (PF) have returned 2.9%, 29.9%, and 25.3%, respectively. The broader comparative index, the Guggenheim S&P 500 Equal Weight Consumer Staples ETF (RHS), has returned 4.9%. RHS has 34.9% of its total holdings in food and beverage companies.

Series overview

In this series, we’ll be looking at General Mills’ fiscal 2Q17 earnings as well as its performance on key metrics in the quarter. We’ll also cover management’s guidance and analyst estimates for fiscal 2017 and beyond.

Let’s start by taking a close look at General Mills’ fiscal 2Q17 revenue.

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