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General Mills (GIS) Queued Up for Q2 Earnings: Factors to Watch

General Mills' (GIS) second-quarter fiscal 2022 performance will likely reflect robust at-home food demand. However, higher input cost inflation is a concern.

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This story originally appeared on Zacks

General Mills, Inc. GIS is likely to witness growth in the top line when it reports second-quarter fiscal 2022 numbers on Dec 21. The Zacks Consensus Estimate for quarterly revenues is pegged at $4,865 million, suggesting an increase of 3.1% from the prior-year quarter’s reported figure.

General Mills’ fiscal second-quarter earnings are likely to remain flat with the year-ago quarter’s reported figure. The Zacks Consensus Estimate for quarterly earnings has moved up by a penny in the last 7 days to $1.06 per share. The consumer foods company has a trailing four-quarter earnings surprise of 7.3%, on average. In the last reported quarter, General Mills posted an earnings surprise of 12.5%.

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General Mills, Inc. Price and EPS Surprise

General Mills, Inc. Price and EPS Surprise

General Mills, Inc. price-eps-surprise | General Mills, Inc. Quote

Things to Note

In its last earnings release, General Mills highlighted that it has been benefiting from higher at-home food demand as people are spending more time working from home. Moreover, the increased pet population as well as more humanization and premiumization of pet food amid the pandemic is working favorably for the company’s pet food category. In addition, General Mills is on track with its three key priorities, which are in line with the Accelerate strategy. These include competing efficiently and operating with efficacy to fuel investments in brands and capabilities. The persistence of these factors is likely to have benefited General Mills’ performance in the to-be-reported quarter.

Apart from this, General Mills is benefiting from its strategic pricing actions. In its last earnings call, management highlighted that it expects to reap significant benefits from pricing actions in the second quarter of fiscal 2022.

That being said, General Mills is grappling with input cost inflation, higher supply-chain costs and fixed cost deleverage across the supply chain. Volatile weather and challenges in transportation as well as labor markets are headwinds for the company. The persistence of these factors is likely to have hurt General Mills’ performance in the quarter under review.

What the Zacks Model Unveils

Our proven model does not predict an earnings beat for General Mills this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

General Mills currently carries a Zacks Rank #4 (Sell) and has an Earnings ESP of -0.47%.

Some Stocks With Favorable Combinations

Here are some companies that you may want to consider as our model shows that these too have the right combination of elements to post an earnings beat.

Constellation Brands, Inc. STZ currently has an Earnings ESP of +2.13% and a Zacks Rank #3. The company is expected to register a bottom-line decline when it reports third-quarter fiscal 2022 numbers. The Zacks Consensus Estimate for its quarterly earnings has remained unchanged in the past 30 days at$2.82 per share. The projection suggests a 8.7% decrease from the year-ago quarter’s reported figure. You can see the complete list of today’s Zacks #1 Rank stocks here.

Constellation Brands’ top line is expected to fall year over year. The consensus mark for revenues is pegged at $2,280 million, indicating a decline of 8.7% from the figure reported in the year-ago quarter. STZ has a trailing four-quarter earnings surprise of 8.9%, on average.

The Kraft Heinz Company KHC has an Earnings ESP of +0.23% and a Zacks Rank #3. The company is expected to register a bottom-line decline when it reports fourth-quarter 2021 numbers. The Zacks Consensus Estimate for its quarterly earnings has remained unchanged in the past 30 days at 63 cents per share. The projection suggests a 21.3% slump from the year-ago quarter’s reported figure.  

Kraft Heinz’s top line is expected to fall year over year. The consensus mark for revenues is pegged at $6,604 million, indicating a decline of 4.8% from the figure reported in the year-ago quarter. KHC has a trailing four-quarter earnings surprise of 11.8%, on average.

Nu Skin Enterprises NUS has an Earnings ESP of +5.26% and a Zacks Rank #3. The company is expected to register a bottom-line decline when it reports fourth-quarter 2021 numbers. Although the Zacks Consensus Estimate for its quarterly earnings has moved up by a couple of pennies to 95 cents per share in the past 30 days, it suggests a slump of 32.1% from the year-ago quarter’s reported figure.  

Nu Skin’s top line is expected to fall year over year. The consensus mark for revenues is pegged at $655.9 million, indicating a decline of 12.3% from the figure reported in the year-ago quarter. NUS has a trailing four-quarter earnings surprise of 16.6% on average.



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