The 10-second takeaway
For the quarter ended Feb. 24 (Q3), General Mills beat slightly on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue grew. Non-GAAP earnings per share increased significantly. GAAP earnings per share grew.
Margins dropped across the board.
General Mills recorded revenue of $4.43 billion. The 15 analysts polled by S&P Capital IQ expected to see a top line of $4.36 billion on the same basis. GAAP reported sales were 7.5% higher than the prior-year quarter's $4.12 billion.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.64. The 19 earnings estimates compiled by S&P Capital IQ anticipated $0.57 per share. Non-GAAP EPS of $0.64 for Q3 were 16% higher than the prior-year quarter's $0.55 per share. GAAP EPS of $0.60 for Q3 were 3.4% higher than the prior-year quarter's $0.58 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 34.4%, 220 basis points worse than the prior-year quarter. Operating margin was 14.6%, 160 basis points worse than the prior-year quarter. Net margin was 9.0%, 50 basis points worse than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $4.33 billion. On the bottom line, the average EPS estimate is $0.54.
Next year's average estimate for revenue is $17.68 billion. The average EPS estimate is $2.69.
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 1,124 members out of 1,188 rating the stock outperform, and 64 members rating it underperform. Among 370 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 359 give General Mills a green thumbs-up, and 11 give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on General Mills is outperform, with an average price target of $43.95.
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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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