General Mills misses by $0.01, misses on revs; Lowers FY16 outlook as result of Green Giant divestiture
Reports Q2 (Nov) earnings of $0.82 per share, $0.01 worse than the Capital IQ Consensus of $0.83; revenues fell 6.1% year/year to $4.42 bln vs the $4.63 bln Capital IQ Consensus.General Mills revised its 2016 full-year growth targets to reflect the impact of the Green Giant divestiture:
- Net sales in constant currency are now expected to decline at a low single-digit rate from the 2015 levels that included a 53rd week. (Prior: 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 essentially match last year's levels in constant currency. (Prior: 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 low 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 currency translation in 2016. (Prior: 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 currency translation in 2016.)
- In the first half of fiscal 2016, General Mills announced incremental actions related to Project Century in North America and in our Europe region. The company now is targeting $450 million in cumulative cost savings by fiscal 2017 and $500 million by fiscal 2018 from the combination of Project Century, Project Catalyst, Project Compass, and our policies and practices update, including zero-based budgeting.