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General Mills Stock Fell Due to Weak Fiscal 3Q17 Sales

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Fiscal 3Q17 performance

General Mills (GIS) reported its fiscal 3Q17 earnings on March 21, 2017. The results are for a three-month period ending on February 26, 2017.

The company posted EPS (earnings per share) of $0.61 on revenue of $3.79 billion. Removing special or one-time expenses, the adjusted EPS stood at $0.72.

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Stock performance

Analysts expected the company to post EPS of $0.71 on revenue of $3.83 billion. Although its fiscal 3Q17 EPS was better than expected, the revenue was lower than analysts’ estimate. Management blamed the widening gap between General Mills and its peers’ promotions for lower-than-expected revenues. The company’s revenue fell for the seventh straight quarter. As a result, investors seem skeptical about its future earnings leading to a fall in its stock price. As of March 23, 2017, General Mills was trading at $59.37—a fall of 1.5% since the announcement of its 3Q17 earnings.

Year-to-date performance

Since the beginning of 2017, General Mills stock fell 3.9%. During the same period, its peers Kellogg (K), B&G Foods (BGS), and Pinnacle Foods (PF) have returned -0.8%, -7.9%, and 8.5%, respectively. The broader comparative index, the Guggenheim S&P 500 Equal Weight Consumer Staples ETF (RHS), has returned 9.4%. RHS has 34.9% of its total holdings in food and beverage companies.

Series overview

In this series, we’ll look at General Mills’ fiscal 3Q17 earnings as well as its performance on key metrics during the quarter. We’ll also cover management’s guidance and analysts’ estimates for fiscal 2017 and beyond.

Let’s start by taking a closer look at General Mills’ fiscal 3Q17 revenue.

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