General Mills (NYSE:GIS) Reports Decrease In Earnings With US$257 Million Sales Dip And Lowers Outlook

General Mills (NYSE:GIS) recently announced its third-quarter earnings, reporting a decline in sales and net income compared to the previous year, which likely influenced its stock price move of 2.72% over the last month. Sales fell to $4,842 million, a 5% decline year-over-year, while net income decreased to $626 million. Despite an improved performance over nine months, with net income up to $2,001 million, the company's revised guidance for fiscal 2025, which anticipates a decrease in organic net sales between 2% and 1.5%, could have dampened investor sentiment. The market as a whole showed gains, with major indexes rising. However, General Mills' specific challenges, including inventory headwinds in North America Retail and Pet segments, with lower consumer snack demand, might have exerted downward pressure on its stock. Together with these internal factors, market uncertainties, and softened demand, could have shaped GIS's recent performance.

We've identified 2 weaknesses with General Mills (at least 1 which is significant) and understanding the impact should be part of your investment process.

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Over the last five years, General Mills' total shareholder return, including share price appreciation and dividends, was 47.47%. This performance was influenced by various strategic actions. Despite recent headwinds, the company's long-term growth has been supported by targeted mergers and acquisitions aimed at enhancing its portfolio, as mentioned in December 2024, and consistent dividend declarations, such as the US$0.60 per share dividend announced in January 2025. Additionally, General Mills' stock repurchase plans, which saw the company buying back 38.62 million shares under the plan announced in 2022, contributed to shareholder returns.

In terms of its relative performance, GIS underperformed both the US market and the US Food industry over the past year, which returned 8.1% and decreased by 8.9% respectively. Market-sensitive events, including the new product launches in March 2025, have had mixed impacts, as the company expands into new categories like ramen noodles.

The valuation report we've compiled suggests that General Mills' current price could be quite moderate.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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