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How Is General Mills' (GIS) Pet Segment Placed in Q2 Earnings?
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General Mills, Inc. (GIS - Free Report) is scheduled to come up with second-quarter fiscal 2024 earnings on Dec 20. Let’s take a closer look at the company’s Pet segment, which constituted nearly 12% of its total sales in the first quarter of fiscal 2024.
Pet Unit in Detail
Although General Mills’ Pet segment has been driving the company’s performance, the unit is likely to have witnessed some hurdles in the quarter to be reported.
General Mills, Inc. Price, Consensus and EPS Surprise
GIS is bearing the brunt of the lower impacts of inflation-justified pricing, along with consumers’ shift toward value products stemming from an uncertain economic landscape. The company’s Pet segment retail sales in the first quarter of fiscal 2024 were somewhat affected by these aspects, including pet parents’ shift toward value products and channels, along with smaller pack sizes.
Additionally, GIS is witnessing challenges in the wet food and treats categories, with pet parents spending more time at work or away from home. In the first quarter, segment sales remained flat year over year at $580 million as pricing was countered by soft pound volumes.
On its last earnings call, management stated that it expects the difficult category dynamics to persist in the Pet segment throughout fiscal 2024 as it does not see any major change in the economic viewpoint for pet parents in the near term. This remains a concern for the quarter under review.
Our model suggests Pet segment revenues will grow 4.5% to $619.6 million in the second quarter and form 11.4% of the company’s total revenues.
General Mills’ Pet segment mainly constitutes Blue Buffalo Pet Products, Inc., which was acquired by GIS in fiscal 2018. Following this acquisition, General Mills became one of the leading players in the pet food arena. Blue Buffalo manufactures and markets wholesome natural pet food items and is contributing to General Mills’ top line. Additionally, GIS acquired Tyson Foods’ pet treats business in July 2021, which added another leaf to the company’s impressive Pet story.
Other Factors
General Mills’ commitment to its three priorities as part of its Accelerate strategy is likely to have aided in the quarter under review. These include competing efficiently through brand building and innovation, enhancing the supply chain by boosting Holistic Margin Management cost savings and curtailing costs, undertaking efficient capital allocation, rewarding shareholders and staying committed to reshaping the portfolio via strategic acquisitions and divestitures.
Apart from this, General Mills’ input cost inflation has been moderating. On its first-quarter earnings call, management stated that the biggest factors impacting its performance in fiscal 2024 are likely to be consumers’ economic status, the moderating rate of cost inflation and the rising stability of supply-chain status. However, continued brand investments may have escalated SG&A expenses in the second quarter.
How Are Estimates Shaping Up?
The Zacks Consensus Estimate for revenues is pegged at $5.3 billion, suggesting an increase of 2.2% from the prior-year quarter’s reported figure. The consensus mark for quarterly earnings has dropped by a penny, unchanged in the past seven days to $1.15 per share. This indicates a rise of 4.6% from the year-ago quarter’s reported figure. GIS has a trailing four-quarter earnings surprise of 4.5%, on average.
General Mills carries a Zacks Rank #3 (Hold) and has an Earnings ESP of -0.41%. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 increases the chances of an earnings beat, which is not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks With the Favorable Combination
Here are three companies worth considering as our model shows that these have the correct combination to beat on earnings this time:
Sysco Corporation (SYY - Free Report) has an Earnings ESP of +1.07% and a Zacks Rank #3. The company is likely to witness top-and-bottom-line growth when it reports second-quarter fiscal 2024 results. The Zacks Consensus Estimate for Sysco’s quarterly revenues is pegged at $19.3 billion, which suggests a rise of 3.7% from the figure reported in the prior-year quarter. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Sysco’s quarterly EPS has risen by 2.3% in the past 30 days to 88 cents, which suggests an increase of 10% from the year-ago quarter’s level. SYY has a trailing four-quarter negative earnings surprise of 0.03%, on average.
Mondelez International (MDLZ - Free Report) currently has an Earnings ESP of +1.26% and a Zacks Rank #3. The company is likely to register top-and-bottom-line growth when it reports fourth-quarter 2023 numbers. The Zacks Consensus Estimate for Mondelez’s quarterly revenues is pegged at $9.2 billion, indicating a rise of 5.9% from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for Mondelez’s quarterly earnings of 76 cents suggests an increase of 4.1% from the year-ago quarter’s levels. MDLZ has a trailing four-quarter earnings surprise of 7.3%, on average.
Colgate-Palmolive (CL - Free Report) currently has an Earnings ESP of +2.12% and a Zacks Rank of 3. The company is likely to register top-line and bottom-line increases when it reports fourth-quarter 2023 numbers. The Zacks Consensus Estimate for Colgate’s quarterly revenues is pegged at $4.9 billion, indicating a rise of 5.3% from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for Colgate’s quarterly earnings of 85 cents suggests an increase of 10.4% from the year-ago quarter’s levels. CL has a trailing four-quarter earnings surprise of 3.6%, on average.
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How Is General Mills' (GIS) Pet Segment Placed in Q2 Earnings?
General Mills, Inc. (GIS - Free Report) is scheduled to come up with second-quarter fiscal 2024 earnings on Dec 20. Let’s take a closer look at the company’s Pet segment, which constituted nearly 12% of its total sales in the first quarter of fiscal 2024.
Pet Unit in Detail
Although General Mills’ Pet segment has been driving the company’s performance, the unit is likely to have witnessed some hurdles in the quarter to be reported.
General Mills, Inc. Price, Consensus and EPS Surprise
General Mills, Inc. price-consensus-eps-surprise-chart | General Mills, Inc. Quote
GIS is bearing the brunt of the lower impacts of inflation-justified pricing, along with consumers’ shift toward value products stemming from an uncertain economic landscape. The company’s Pet segment retail sales in the first quarter of fiscal 2024 were somewhat affected by these aspects, including pet parents’ shift toward value products and channels, along with smaller pack sizes.
Additionally, GIS is witnessing challenges in the wet food and treats categories, with pet parents spending more time at work or away from home. In the first quarter, segment sales remained flat year over year at $580 million as pricing was countered by soft pound volumes.
On its last earnings call, management stated that it expects the difficult category dynamics to persist in the Pet segment throughout fiscal 2024 as it does not see any major change in the economic viewpoint for pet parents in the near term. This remains a concern for the quarter under review.
Our model suggests Pet segment revenues will grow 4.5% to $619.6 million in the second quarter and form 11.4% of the company’s total revenues.
General Mills’ Pet segment mainly constitutes Blue Buffalo Pet Products, Inc., which was acquired by GIS in fiscal 2018. Following this acquisition, General Mills became one of the leading players in the pet food arena. Blue Buffalo manufactures and markets wholesome natural pet food items and is contributing to General Mills’ top line. Additionally, GIS acquired Tyson Foods’ pet treats business in July 2021, which added another leaf to the company’s impressive Pet story.
Other Factors
General Mills’ commitment to its three priorities as part of its Accelerate strategy is likely to have aided in the quarter under review. These include competing efficiently through brand building and innovation, enhancing the supply chain by boosting Holistic Margin Management cost savings and curtailing costs, undertaking efficient capital allocation, rewarding shareholders and staying committed to reshaping the portfolio via strategic acquisitions and divestitures.
Apart from this, General Mills’ input cost inflation has been moderating. On its first-quarter earnings call, management stated that the biggest factors impacting its performance in fiscal 2024 are likely to be consumers’ economic status, the moderating rate of cost inflation and the rising stability of supply-chain status. However, continued brand investments may have escalated SG&A expenses in the second quarter.
How Are Estimates Shaping Up?
The Zacks Consensus Estimate for revenues is pegged at $5.3 billion, suggesting an increase of 2.2% from the prior-year quarter’s reported figure. The consensus mark for quarterly earnings has dropped by a penny, unchanged in the past seven days to $1.15 per share. This indicates a rise of 4.6% from the year-ago quarter’s reported figure. GIS has a trailing four-quarter earnings surprise of 4.5%, on average.
General Mills carries a Zacks Rank #3 (Hold) and has an Earnings ESP of -0.41%. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 increases the chances of an earnings beat, which is not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks With the Favorable Combination
Here are three companies worth considering as our model shows that these have the correct combination to beat on earnings this time:
Sysco Corporation (SYY - Free Report) has an Earnings ESP of +1.07% and a Zacks Rank #3. The company is likely to witness top-and-bottom-line growth when it reports second-quarter fiscal 2024 results. The Zacks Consensus Estimate for Sysco’s quarterly revenues is pegged at $19.3 billion, which suggests a rise of 3.7% from the figure reported in the prior-year quarter. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Sysco’s quarterly EPS has risen by 2.3% in the past 30 days to 88 cents, which suggests an increase of 10% from the year-ago quarter’s level. SYY has a trailing four-quarter negative earnings surprise of 0.03%, on average.
Mondelez International (MDLZ - Free Report) currently has an Earnings ESP of +1.26% and a Zacks Rank #3. The company is likely to register top-and-bottom-line growth when it reports fourth-quarter 2023 numbers. The Zacks Consensus Estimate for Mondelez’s quarterly revenues is pegged at $9.2 billion, indicating a rise of 5.9% from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for Mondelez’s quarterly earnings of 76 cents suggests an increase of 4.1% from the year-ago quarter’s levels. MDLZ has a trailing four-quarter earnings surprise of 7.3%, on average.
Colgate-Palmolive (CL - Free Report) currently has an Earnings ESP of +2.12% and a Zacks Rank of 3. The company is likely to register top-line and bottom-line increases when it reports fourth-quarter 2023 numbers. The Zacks Consensus Estimate for Colgate’s quarterly revenues is pegged at $4.9 billion, indicating a rise of 5.3% from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for Colgate’s quarterly earnings of 85 cents suggests an increase of 10.4% from the year-ago quarter’s levels. CL has a trailing four-quarter earnings surprise of 3.6%, on average.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.