--> GIS +1.6% in pre open
General Mills beats by $0.10, misses on revs; reaffirms FY16 outlook but raises FX headwind
- Reports Q1 (Aug) earnings of $0.79 per share, excluding non-recurring items, $0.10 better than the Capital IQ Consensus Estimate of $0.69; revenues fell 1.4% year/year to $4.21 bln vs the $4.25 bln consensus, FX reduced net sales growth by 5 percentage points.
- On a constant-currency basis, net sales grew 4 percent, including 2 points of growth contributed by the Annie's business acquired in Oct 2014. Pound volume was 2 percent above year-ago levels.
- Net price realization and mix contributed 2 points of net sales growth. Adjusted gross margin increased 290 basis points due to improved net price realization and savings from cost-reduction initiatives.
- General Mills reiterated its full-year growth targets for 2016, which current General Mills reiterated its full-year growth targets for 2016, which currently exclude any impact from the proposed Green Giant divestiture:
- Net sales in constant currency are expected to essentially match the 2015 levels that included a 53rd week. Total segment operating profit is expected to grow at a low single-digit rate in constant currency.
- Constant-currency adjusted diluted EPS is expected to grow at a mid single-digit rate from the base of $2.86 earned in fiscal 2015. At current exchange rates, the company estimates a 9-cent headwind from FX in 2016 (up from $0.04), which comes to EPS of $2.92-2.94 vs. $2.96 Capital IQ Consensus.