General Mills, Inc. (NYSE: GIS ) shares are trading lower in the premarket session on Wednesday.
The company reported second-quarter adjusted earnings per share of $1.40, beating the street view of $1.22 .
Quarterly sales of $5.24 billion beat the analyst consensus estimate of $5.14 billion. Quarterly sales were up 2%, driven by higher pound volume, while organic net sales increased 1%.
Gross margin was up 250 basis points to 36.9%, driven primarily by Holistic Margin Management cost savings and favorable mark-to-market effects, partially offset by input cost inflation.
Adjusted gross margin was up 130 basis points to 36.3%. Operating profit of $1.1 billion was up 33%, driven primarily by higher gross profit dollars and a goodwill impairment charge a year ago.
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The acquisition of the Edgard & Cooper pet food business in the fourth quarter of fiscal 2024 impacted the comparability of second-quarter and year-to-date International segment operating results between fiscal 2024 and fiscal 2025.
The company exited the quarter with cash and equivalents worth $2.292 billion. Inventories were $1.967 billion.
Outlook: General Mills says organic net sales are still expected to range between flat and up 1%, with the company now targeting the lower end of the range due to increased promotional investment.
General Mills has revised its FY25 adjusted EPS outlook, now expecting a decline of 3% to 1% in constant currency. This adjustment compares to the previous outlook range of a decline of 1% to a growth of 1% in constant currency.
Adjusted operating profit is now expected to range between down 4% and down 2% in constant currency, compared to the previous range of between down 2% and flat in constant currency, reflecting higher investment levels.
Price Action: GIS shares are trading lower by 4.29% to $63.10 premarket at last check Wednesday.
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This article General Mills Beats On Q2 Earnings, Stock Slumps On Lackluster Outlook originally appeared on Benzinga.com
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