Latest news with #JeffreyHarmening
Yahoo
26-06-2025
- Business
- Yahoo
GIS Q2 Deep Dive: Investment in Value and Innovation Amid Volume and Margin Pressures
Packaged foods company General Mills (NYSE:GIS) fell short of the market's revenue expectations in Q2 CY2025, with sales falling 3.3% year on year to $4.56 billion. Its non-GAAP profit of $0.74 per share was 4.1% above analysts' consensus estimates. Is now the time to buy GIS? Find out in our full research report (it's free). Revenue: $4.56 billion vs analyst estimates of $4.58 billion (3.3% year-on-year decline, 0.5% miss) Adjusted EPS: $0.74 vs analyst estimates of $0.71 (4.1% beat) Adjusted EBITDA: $758.1 million vs analyst estimates of $749.6 million (16.6% margin, 1.1% beat) Operating Margin: 11.1%, down from 16.5% in the same quarter last year Organic Revenue fell 3% year on year (-6% in the same quarter last year) Sales Volumes fell 2% year on year, in line with the same quarter last year Market Capitalization: $27.49 billion General Mills' second quarter results did not meet Wall Street's sales expectations, with revenue declining year over year—a trend that prompted a significant negative market reaction. Management attributed the underperformance to ongoing volume declines and competitive pressures in core categories, especially within North America Retail. CEO Jeffrey Harmening noted the company's increased focus on value investments in key brands such as Pillsbury and Totino's and expanded efforts in soup, cereal, and fruit snacks. Harmening acknowledged, 'We know that it's an investment year, but we are very confident these investments will pay off given what we've seen over the last couple of quarters.' Looking ahead, General Mills' strategy centers on driving volume growth through increased marketing, new product launches, and targeted price adjustments, particularly in North America Retail and the pet food segment. Management expects these investments to pressure margins in the near term, but CFO Kofi Bruce explained that some impacts, such as stranded costs from divestitures and tariff-related expenses, are temporary. Harmening emphasized the importance of aligning pricing with competition to enable effective marketing, stating, 'It's about investment and making sure that we get trial on all of our good marketing initiatives.' The company is also betting on innovation, including a national launch of fresh pet food, to return the business to growth. Management pointed to targeted value investments, stepped-up advertising, and product innovation as central to both recent performance and their plans to restore growth, while acknowledging persistent volume and margin challenges. Value Investments Expanded: The company increased value-oriented promotions in categories like cereal, soup, and fruit snacks, aiming to improve volume trends. These investments were supported by enhanced advertising, particularly for brands such as Pillsbury and Totino's, which management believes can help regain share lost to competitors. Fresh Pet Food Launch: General Mills announced a national rollout of Blue Buffalo's refrigerated pet food, building on positive test market results. Management expressed confidence in the brand's ability to scale profitably over time, but cautioned that initial investments to drive consumer trial will weigh on margins for several quarters. Core Brand Renovations: The company undertook significant product updates and new product introductions, with Harmening describing the 'core renovation news' as the strongest in his tenure. Protein innovation and new seasonal offerings in snacks and cereals are intended to meet evolving consumer preferences. International and Non-Retail Strength: While North America Retail remains challenged, General Mills reported share gains in international businesses, foodservice, and healthcare channels. These areas provided some offset to domestic headwinds, though management emphasized the need for further growth in its largest categories. Margin Management and Productivity: Facing input cost pressures and increased reinvestment, management highlighted record levels of holistic margin management (cost-saving initiatives) and ongoing productivity efforts. However, they acknowledged that some margin reductions are temporary, linked to tariffs and stranded costs from divestitures, and expect improvement once these factors abate. General Mills' outlook is shaped by continued investment in marketing, innovation, and selective pricing actions, with management expecting near-term margin pressure but aiming for volume recovery. Stepped-Up Marketing and Innovation: Increased advertising spend and the rollout of new products, especially in protein-forward and seasonal segments, are expected to drive trial and brand engagement. Management believes these moves will support volume gains, even if dollar sales lag initially due to price reductions and trade investments. Margin Headwinds and Recovery: The company anticipates that higher short-term expenses from marketing, tariffs, and stranded costs (such as those related to the Yoplait divestiture) will pressure margins. CFO Kofi Bruce described some of these as 'more temporary in nature,' with expectations for margin improvement as investments scale and cost-saving measures take hold. Category and Competitive Dynamics: Management does not expect a significant rebound in category growth, instead focusing on competitiveness within core categories. Leadership cited the need to balance volume and pricing, leveraging strategic revenue management tools to navigate inflation, tariffs, and evolving consumer sentiment. In the next few quarters, our team will be monitoring (1) the volume response to expanded value investments and new product launches, (2) the pace at which margin pressures from tariffs and one-time costs begin to abate, and (3) the national rollout and consumer adoption of Blue Buffalo's fresh pet food line. Execution in core North America Retail categories and the effectiveness of marketing investments will be critical to tracking the company's progress. General Mills currently trades at $50.72, down from $53.37 just before the earnings. Is the company at an inflection point that warrants a buy or sell? See for yourself in our full research report (it's free). Donald Trump's victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs. While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like our Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025). Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today.
Miami Herald
22-04-2025
- Business
- Miami Herald
Cheerios, Betty Crocker maker faces massive boycott from consumers
General Mills (GIS) , which owns popular food brands such as Lucky Charms, Cheerios, and Betty Crocker, recently suffered a significant dip in sales. In its latest earnings report, General Mills revealed that net sales declined by 5% year-over-year during the third quarter of fiscal year 2025. Specifically in the U.S., retail sales shrank by 7%, with morning foods, snacks, meals and baking solutions all facing a decrease in sales. Don't miss the move: Subscribe to TheStreet's free daily newsletter Amid the decline in sales, General Mills generated an operating profit (the company's profit after expenses) of $891 million, which is 2% lower than what it earned during the same quarter in 2023. Related: Cheerios, Lucky Charms owner sounds alarm on growing problem During an earnings call on March 19, General Mills CEO Jeffrey Harmening said consumers have become more "value conscious," and they are scaling back spending on discretionary items at the grocery store. Amid this growing threat to sales, General Mills now has another significant problem that can also harm its profits. The People's Union USA, a group that recently organized seven-day boycotts of Amazon, Walmart, and Nestlé, has just chosen General Mills as its next target. Image source:The group's General Mills boycott officially kicked off on April 21 and will conclude on April 28. In a recent Instagram post, The People's Union USA founder John Schwarz said one reason the group decided to boycott the company was because of the alleged "toxic ingredients" General Mills puts in its food products. "General Mills represents everything that is wrong with the corporate grip on our food system," said Schwarz. "This is a company that owns half the cereal aisle, floods our stores with ultra-processed garbage and targets our children with sugary poison. They have spent millions lobbying against GMO transparency and better food labeling, just so we stay blind to what we're really feeding our families." Related: General Mills faces lawsuit alleging egregious incidents of racism Some of the ingredients found in General Mills' food products include seed oils such as canola, sunflower, and palm, which have recently drawn scrutiny from consumers for being overly processed and contributing to inflammation in the body. Despite General Mills' previous efforts to remove artificial flavors and colors from almost all of its cereals, a number of its products contain synthetic dyes such as Blue 1, Red 40, Yellow 6, etc. These dyes, which are commonly found in processed foods, have come under fire for being linked to health issues such as cancer and hyperactivity in children, despite being approved by the U.S. Food and Drug Administration. Schwarz also alleged that General Mills dodges "their fair share of taxes" and exploits its workers, prioritizing profits over people. "This company has exploited farmers, drained our soils with unethical farming, and done nothing to fix their role in the plastic pollution crisis," said Schwarz. "Their executives rake in millions while factory workers struggle to make ends meet. General Mills isn't just a cereal company. They are a symbol of unchecked corporate power, one that answers to profits, not people." View the original article to see embedded media. His comments come after General Mills investors last September voted against a proposal from a group of its shareholders that called on the company to reduce its use of plastic packaging. The company's investors also knocked down a shareholder proposal that aimed to gather additional details on how it is decreasing pesticide use in its farming. More Retail: AT&T quietly issues stern warning to customersSam's Club makes a big change to a beloved membership perkGameStop announces risky move amid store closures The People's Union USA is encouraging consumers to boycott all of the company's food products in categories such as snacks, frozen food, breakfast and cereals, and pet food. The boycott follows General Mills' expected continuation of declining sales during the first few months of this year. In its latest earnings report, the company predicted that its organic net sales for the fourth quarter of fiscal year 2025 will decline by 1.5% to 2% after previously expecting sales to be flat or up by 1%. The company also expects its operating profit to shrink by 7% to 8%. Related: Veteran fund manager unveils eye-popping S&P 500 forecast The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
Axios
08-04-2025
- Business
- Axios
Minnesota's biggest Trump tariff losers
No Minnesota-based Fortune 500 company has seen its stock price plunge more following President Trump's tariff announcement than Best Buy. State of play: The Richfield-based electronics retailer, which gets most of its products from China and Mexico, saw its share price drop 16.7% over the past week. Zoom out: Other big Minnesota companies that have taken major hits include 3M and its healthcare spinoff Solventum, as well as U.S. Bank and lawnmower maker Toro. The other side: Minnesota's big food companies are less affected by the tariffs. General Mills' stock is down only 2% since the tariff announcement, while Hormel's was down 2.9%. General Mills CEO Jeffrey Harmening told analysts in February that tariffs "aren't really meaningful" for General Mills because it sources 95% of its products in the U.S., according to Food Dive.
Miami Herald
21-03-2025
- Business
- Miami Herald
Cheerios, Lucky Charms owner sounds alarm on growing problem
General Mills (GIS) , which owns large food brands such as Cheerios, Lucky Charms, Pillsbury, Häagen-Dazs, etc., has noticed a startling change in customer behavior, and the company is sounding the alarm on the root cause of the problem. General Mills' third-quarter earnings report for fiscal year 2025 revealed that its net sales during the quarter were down by 5% year-over-year. Specifically in the U.S., retail sales declined by 7%, with morning foods, snacks, meals and baking solutions all facing a decrease in sales. Get expert insights and actionable trade alerts from veteran investing experts and hedge fund managers. Join TheStreet Pro today and get the first month FREE This shrinkage in sales contributed to General Mills' operating profit, which is a company's profit after paying operating expenses, to decline by 2% year-over-year. Related: Bounty, Tide, Dawn owner issues stern warning about its pricing During an earnings call on March 19, General Mills CEO Jeffrey Harmening flagged that the company noticed that customers were pulling back on snacking more than they did during the 2008 recession. "Food at home is now elevated vis-a-vis what it was in 2008," said Harmening during the call. He also said that the number of customers opting to prepare food at home increased during the COVID-19 pandemic, and now that the pandemic is over, that number has spiked even more. "Pre-pandemic food-at-home consumption was about 83% of occasions," said Harmening. "It is now 87% and has been 87% for a long time. And so, what has changed is that in prior periods like we're experiencing now with consumer confidence, we had a lower percentage of people eating at home, and that increased as they got more anxious." Many consumers across the country have indeed been shifting their focus on cooking food at home amid inflation and higher costs of living. According to a recent survey from The Harris Poll and Flashfood, 81% of Americans said saving money on food is a priority for them this year. Also, 89% of Americans in the survey believe that cooking food at home doesn't just have cost-saving benefits, but it is also healthier. Related: Dollar General CEO flags alarming shift in customer behavior Many Americans have also recently been cutting processed foods out of their diets. A recent survey from the International Food Information Council found that 63% of Americans avoid processed foods, while more than half follow a vegan, vegetarian, or plant-based diet in an effort to be healthier. During the call, Harmening also noted that consumers have become more "value conscious" and are scaling back spending on discretionary items at grocery stores. "If you look at the rest of the grocery store, you would see that things that are staples are the ones that are growing faster than things that are more discretionary," said Harmening. "And so, staples like baking staples, for example, and some of the items on the perimeter, those are growing faster because they produce more value." Amid this concerning trend, Harmening said that General Mills will focus on emphasizing the value of its products to win back customers, and that doesn't mean solely focusing on lowering prices. "It really is about getting the value right," said Harmening. "And beyond that, it really is about talking about the benefits of our products. In some cases, that's functional benefits like protein. In other places, like Pillsbury biscuits, it's about how flaky they are. When it comes to Betty Crocker, maybe how chocolaty they are. So, it really depends brand by brand, the benefits they're looking for." More Retail: Target's latest policy change sparks massive boycott threatBounty, Tide, Dawn owner issues stern warning about its pricingGameStop makes a drastic move amid weak sales General Mills is expecting its organic net sales for the first quarter of this year to decline by 1.5% to 2% after previously expecting sales to be flat or up by 1%. The company is also expecting its operating profit to shrink by 7% to 8%. General Mills' grim outlook on sales comes at a time when it is facing a significant boycott threat from consumers. The People's Union, which has planned "economic blackouts" and boycotts of companies such as Amazon, Walmart, and Nestle this year, has a General Mills boycott scheduled between April 21-28. The organization, which has gone viral on social media, has been targeting large companies it believes have allegedly harmed consumers through corrupt practices. "Mega corporations have driven up prices, underpaid their workers, and outsourced jobs while raking in record profits," said The People's Union on its website. Related: Veteran fund manager unveils eye-popping S&P 500 forecast The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
Yahoo
20-03-2025
- Business
- Yahoo
General Mills Inc (GIS) Q3 2025 Earnings Call Highlights: Strategic Innovations and Market ...
Release Date: March 19, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. General Mills Inc (NYSE:GIS) is focusing on accelerating organic growth with a sharp focus on value and innovation. The company plans to reinvest savings from HMM and an additional $100 million in cost savings to drive growth. General Mills Inc (NYSE:GIS) is stepping up its marketing efforts, particularly for major brands like Blue Buffalo, Pillsbury, and Cereal. The company is optimistic about its innovation pipeline, with plans for fewer but bigger product launches in fiscal '26. General Mills Inc (NYSE:GIS) has completed a comprehensive evaluation of its brand portfolio to ensure competitiveness across categories. Consumer confidence remains low, impacting the demand for value-oriented products. The company faces headwinds from Yoplait dilution and tariffs, which could affect profitability. General Mills Inc (NYSE:GIS) is experiencing challenges in the snacks category, with a need to address value and innovation. The company is dealing with inventory headwinds in its pet segment, particularly in dry pet food. There is a need for improved marketing and innovation support to regain competitiveness in certain categories like fruit snacks and bars. Warning! GuruFocus has detected 4 Warning Signs with CAAP. Q: With the planned investment increase for fiscal 4Q, how should we think about the incremental investment needed for fiscal '26, especially regarding price points, innovation, in-store activity, and media expense? A: Jeffrey Harmening, CEO, explained that the consumer environment hasn't improved as expected, with consumers still seeking value. The company plans to reinvest in pricing, particularly in fruit snacks, and increase marketing spend on major brands like Blue Buffalo and Pillsbury. The focus will be on getting value right, improving marketing, and launching new products in fiscal '26. Q: Can you outline the tailwinds and headwinds for next year, and how do you plan to address them? A: Kofi Bruce, CFO, acknowledged the tailwinds such as better marketing, innovation, and cost efficiencies. Headwinds include trade investments, tariffs, and Yoplait dilution. The company is committed to improving growth trends and competitiveness, with flexibility for additional investments as needed. Q: How does General Mills plan to ramp up innovation in fiscal '26 compared to '25? A: Jeffrey Harmening, CEO, noted that while innovation is still below pre-pandemic levels, it has increased significantly this year. The focus for fiscal '26 will be on fewer but bigger innovations, with robust support for successful new products like Cheerios Protein and Nature Valley Granola Protein. Q: How does General Mills determine the right price adjustments for categories like Dough and Totino's, and how does this apply to fiscal '26 plans? A: Jeffrey Harmening, CEO, emphasized the importance of getting pricing in the right zone without necessarily matching competitors. The company uses a category-by-category approach to assess value, marketing, and innovation needs, ensuring agility to adapt to changing contexts. Q: What is driving the current weakness in the snacks category, and how does General Mills plan to address it? A: Jeffrey Harmening, CEO, attributed the weakness to consumer confidence and value-seeking behavior, rather than factors like GLP-1 drugs. The company plans to focus on value, innovation, and marketing to address category challenges, with a particular emphasis on fruit snacks and snack bars. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus. Sign in to access your portfolio
