General Mills beats by $0.02, beats on revs; guides FY18 below consensus
- Reports Q4 (May) earnings of $0.73 per share, $0.02 better than the Capital IQ Consensus of $0.71; revenues fell 3.1% year/year to $3.81 bln vs the $3.75 bln Capital IQ Consensus.
- Fourth-quarter net sales for General Mills' North America Retail segment totaled $2.39 billion, down 3 percent from the prior year, driven primarily by double-digit declines in the U.S. Yogurt operating unit, partially offset by growth in the U.S. Snacks unit.
- "While we took important steps in fiscal 2017 to globalize our business structure, accelerate our cost-savings efforts, expand our margins, and drive growth in adjusted diluted EPS, our results on the topline fell well short of our standards. Our entire organization is moving with urgency in fiscal 2018 to meaningfully improve our net sales trends while keeping a sharp eye on our efficiency."
- Co issues guidance for FY18:
- Sees organic net sales down 1-2%, vs. expectations for total revenue to increase around 1%.
- Sees constant-currency adjusted EPS up 1-2%, which would equate to $3.11-3.14; co also sees $0.01 currency headwind to EPS; Capital IQ consensus calls for full year EPS of $3.19.
- Constant-currency total segment operating profit is expected to be in a range between flat and up 1%.
- "We remain committed to our Consumer First strategy and our focus on driving growth and returns for our shareholders," Harmening said. "Our top priority in fiscal 2018 is to make significant strides toward returning our business to sustainable topline growth. Our plans call for investment in product news and innovation to accelerate growth for businesses where we have positive momentum, and to improve those that are underperforming. We'll also increase investment in capabilities like e-commerce and Strategic Revenue Management, which are critical to future growth. And we'll maintain our cost management discipline, with strong levels of savings from Holistic Margin Management and additional benefits from our other cost-reduction initiatives.
- "This cost management discipline has helped us significantly expand our operating margin over the past two years," Harmening continued. "We continue to see opportunities for further margin expansion, including an increase in adjusted operating profit margin in fiscal 2018, but we will moderate the pace of expansion as we invest to restore topline growth. Looking forward, we're focused on delivering a balance of sales growth and margin expansion, along with strong cash conversion and cash returns, to create top-tier returns for our shareholders."