What’s behind General Mills’ Q4 Sales Miss?



Weak volumes, adverse currency rates to blame

In fiscal 2019’s fourth quarter, General Mills’ (GIS) net sales rose 7% YoY (year-over-year) to $4.2 billion, reflecting a 10% contribution from acquisitions and divestitures. However, its net sales fell short of analysts’ estimates—business in Europe and Australia dragged down its organic volumes by 1% YoY and currency fluctuation deteriorated its top line by 2%. Its pricing was flat YoY.

Several US packaged food companies are seeing top-line benefits from their recent acquisitions. General Mills’ acquisition of Blue Buffalo grew its top line in fiscal 2019, J.M. Smucker’s (SJM) net sales were boosted by its Ainsworth acquisition, and Campbell Soup’s (CPB) top line was supported by its acquisition of Snyder’s-Lance and Pacific Foods. Conagra Brands’ (CAG), Kellogg’s (K), and Hershey’s (HSY) sales were also supported by their recently acquired brands. However, continued base business challenges have continued to hurt organic sales.

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General Mills’ top-line growth is likely to moderate as it annualizes its Blue Buffalo acquisition and faces a tough YoY comparison. The company expects its net and organic sales grow 1%–2% in fiscal 2020.


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