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Here's How General Mills (GIS) Looks Ahead of Q2 Earnings

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General Mills, Inc. (GIS - Free Report) is likely to post an increase in the top and the bottom line when it reports second-quarter fiscal 2021 results on Dec 17. The Zacks Consensus Estimate for fiscal second-quarter earnings is unchanged at 96 cents per share in the past 30 days. The estimate suggests growth of 1.1% from the year-ago quarter’s reported figure. This global manufacturer and marketer of branded consumer foods has a trailing four-quarter earnings surprise of 7.3%, on average. In the last reported quarter, the company delivered an earnings surprise of 14.9%.

Moreover, the consensus mark for revenues is pegged at $4.66 billion that indicates growth of 5.4% from the figure reported in the year-ago quarter.

General Mills, Inc. Price and EPS Surprise

 

General Mills, Inc. Price and EPS Surprise

General Mills, Inc. price-eps-surprise | General Mills, Inc. Quote

 

Key Factors to Note

General Mills is witnessing higher consumer demand for its products owing to increased at-home consumption amid the coronavirus outbreak. In its first-quarter earnings call, management stated that it anticipates at-home food demand to remain high compared with pre-pandemic levels. This includes expectations of high-single-digit total retail sales growth in the North America Retail categories during the second quarter. Apart from this, General Mills’ robust cost-saving efforts like the Holistic Margin Management program are yielding results. Also, the company’s focus on its core priorities for fiscal 2021 bodes well.

However, General Mills is seeing reduced demand for its away-from-home food business amid the pandemic. During its last earnings call, the company highlighted its intentions to undertake greater investments to enhance brands, supply chain and shift toward digital marketing and e-commerce in order to tap rising demand. We believe that these entail high costs. Management expects adjusted operating profit margin to have declined year over year in the to-be-reported quarter.

What the Zacks Model Unveils

Our proven model predicts an earnings beat for General Mills this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

General Mills carries a Zacks Rank #3 and an Earnings ESP of +1.34%.

More Stocks With Favorable Combinations

Here are some more companies that you may want to consider as our model shows that these also have the right combination of elements to post an earnings beat.

The Kraft Heinz Company (KHC - Free Report) currently has an Earnings ESP of +3.40% and carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

McCormick & Company (MKC - Free Report) currently has an Earnings ESP of +1.11% and carries a Zacks Rank #3.

Church & Dwight (CHD - Free Report) currently has an Earnings ESP of +0.95% and a Zacks Rank of 3.

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