Consumer foods giant General Mills, Inc. (NYSE:GIS) this morning posted market-beating Q1 earnings and backed its full-year outlook, despite a continued downturn in sales.
The Minneapolis-based company reported fiscal Q1 net income of $0.78 per share, exceeding analyst expectations of $0.75 per share. Revenue fell 7.3% from last year to $3.9 billion, which was in-line with Wall Street’s $3.92 billion estimate.
Organic net sales declined 4% from last year, hurt by weakness in certain segments and negative currency effects.
Looking ahead, GIS reiterated its previously-announced full-year 2017 outlook for EPS growth of 6% to 8% from last year. That range equates to an earnings range of $3.10 to $3.15, which would beat analysts’ outlook of $3.09 per share for the year.
Other interesting notes from the report included:
- Operating profit margin expanded 30 basis points to 16.5% of net sales.
- Adjusted operating profit margin increased 80 basis points to 19.2% of net sales.
- Operating profit totaled $646 million, down 6 percent compared to the prior year.
- U.S. Retail segment sales totaled $2.33 billion, down 8%.
- International segment sales totaled $1.13 billion, down 6%.
From the press release:
“Our first-quarter profit margin expansion and EPS results reflect continued good progress on our productivity and cost-savings initiatives,” said General Mills Chairman and Chief Executive Officer Ken Powell. “However, our net sales performance did not meet our expectations due to the challenging macro environment, a difficult year-over-year comparison, and a slower start to the year on certain businesses. We are taking actions to improve our net sales performance going forward, leveraging our Consumer First focus. At the same time, we have a number of encouraging examples across our global portfolio where our efforts to adapt to evolving consumer interests are driving positive results.”
General Mills shares rose $0.30 (+0.46%) to $65.00 in premarket trading Wednesday. Prior to today’s report, GIS had gained 12.21% year-to-date.