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General Mills (GIS) to Post Q1 Earnings: What's in the Cards?

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General Mills, Inc. (GIS - Free Report) is likely to witness declines in the top and the bottom line, when it reports first-quarter fiscal 2022 numbers on Sep 22. The Zacks Consensus Estimate for quarterly revenues is pegged at $4,352 million, suggesting a drop of 0.3% from the prior-year quarter’s reported figure.

Although the Zacks Consensus Estimate for quarterly earnings has moved up by a penny in the past 30 days to 88 cents per share, it suggests a decline of 12% from the figure reported in the year-ago quarter. The consumer foods company has a trailing four-quarter earnings surprise of 7.9%, on average. In the last reported quarter, General Mills posted an earnings surprise of 9.6%.

General Mills, Inc. Price and EPS Surprise

 

General Mills, Inc. Price and EPS Surprise

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

 

Things to Note

Higher input cost inflation, soft volumes, ongoing labor issues and supply chain bottlenecks are the headwinds that might have impacted General Mills’ performance in the fiscal first quarter. That said, the company is on track with its Holistic Margin Management (HMM) and Strategic Revenue Management (SRM) initiatives, to fight the input cost inflation. In its latest business update, management highlighted that it has undertaken broad-based pricing actions during the fiscal first quarter, as part of its SRM strategy. Certainly, gains from such pricing initiatives are likely to have had a positive impact on the company’s performance in the to-be-reported quarter.

General Mills’ focus on brand building, undertaking innovations and investing in digitization bode well. These along with portfolio restructuring and recovery in the away-from-home food demand should have provided some cushion to the top line. In the business update, management highlighted that organic net sales are now expected to be toward the higher end of the previous guidance of down 1-3%, primarily reflecting better-than-anticipated sales performance in the fiscal first quarter.

Moving to the Pet business, the company is seeing solid household penetration of Blue Buffalo. General Mills’ recently-acquired Tyson Foods’ pet treats business is also performing well — delivering retail sales growth of 20% in the quarter under review.

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 currently carries a Zacks Rank #3 and has an Earnings ESP of +0.36%.

Some Stocks With Favorable Combinations

Here are some companies that you may want to consider as our model shows that these have the right combination of elements to post an earnings beat in the to-be-reported quarter.

Sysco Corporation (SYY - Free Report) currently has an Earnings ESP of +18.13% and a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Simply Good Foods Company (SMPL - Free Report) currently has an Earnings ESP of +1.50% and a Zacks Rank of 3.

Mondelez International, Inc. (MDLZ - Free Report) currently has an Earnings ESP of +0.18% and carries a Zacks Rank #3.