uploads///jeffrey deng  unsplash

Acquisition Will Likely Boost General Mills’ Q4 Sales

By

Jun. 18 2019, Updated 10:51 a.m. ET

Net sales estimate

Wall Street expects General Mills (GIS) to report net sales of $4.2 billion in the fourth quarter, which implies growth of 8.8% YoY (year-over-year). Analysts expect the company’s net sales to continue to gain from its Blue Buffalo acquisition. The acquisition is expected to contribute most of the growth. New products, investments in brands, and expanded distributions are projected to drive the company’s revenues. However, negative currency rates could remain a drag.

Article continues below advertisement

General Mills’ underlying sales are expected to benefit from higher net price realization and a favorable product mix. However, the company’s volumes could continue to remain soft and restrict the underlying sales growth rate. General Mills faces tough YoY comparisons, which could pressure its organic sales.

Notably, acquisitions have been driving packaged food companies’ revenues in the US. J.M. Smucker (SJM), Campbell Soup (CPB), and Conagra Brands’ (CAG) revenue growth increased in the past several quarters. The revenue growth reflected incremental sales from recent acquisitions. However, organic sales continue to faces challenges.

Hershey (HSY) and Mondelēz (MDLZ) had impressive organic sales growth due to higher volumes and pricing. Hershey’s organic sales increased 2% during the last reported quarter. Mondelēz marked 3.7% growth in its organic sales.

Revisiting last quarter

General Mills’ top line increased 8.1% on a YoY basis during the previous quarter due to its Blue Buffalo acquisition. The top line was marginally ahead of analysts’ estimate. The company’s organic sales improved 1% on a YoY basis, which reflected its increased pricing and favorable mix.

Advertisement

More From Market Realist

  • CONNECT with Market Realist
  • Link to Facebook
  • Link to Twitter
  • Link to Instagram
  • Link to Email Subscribe
Market Realist Logo
Do Not Sell My Personal Information

© Copyright 2021 Market Realist. Market Realist is a registered trademark. All Rights Reserved. People may receive compensation for some links to products and services on this website. Offers may be subject to change without notice.