Packaged foods company General Mills (NYSE:GIS) reported Q4 CY2024 results beating Wall Street’s revenue expectations, with sales up 2% year on year to $5.24 billion. Its non-GAAP profit of $1.40 per share was 15% above analysts’ consensus estimates.
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General Mills (GIS) Q4 CY2024 Highlights:
- Revenue: $5.24 billion vs analyst estimates of $5.14 billion (2% year-on-year growth, 1.9% beat)
- Adjusted EPS: $1.40 vs analyst estimates of $1.22 (15% beat)
- Adjusted EBITDA: $1.19 billion vs analyst estimates of $1.10 billion (22.7% margin, 7.6% beat)
- Operating Margin: 20.6%, up from 15.8% in the same quarter last year
- Free Cash Flow Margin: 18.9%, similar to the same quarter last year
- Organic Revenue rose 1% year on year (-2% in the same quarter last year)
- Sales Volumes rose 3% year on year (-4% in the same quarter last year)
- Market Capitalization: $36.6 billion
“We made important progress accelerating our volume growth and market share trends in the first half of the year, including returning our North America Pet business to growth,” said General Mills Chairman and Chief Executive Officer Jeff Harmening.
Company Overview
Best known for its portfolio of powerhouse breakfast cereal brands, General Mills (NYSE:GIS) is a packaged foods company that has also made a mark in cereals, baking products, and snacks.
Shelf-Stable Food
As America industrialized and moved away from an agricultural economy, people faced more demands on their time. Packaged foods emerged as a solution offering convenience to the evolving American family, whether it be canned goods or snacks. Today, Americans seek brands that are high in quality, reliable, and reasonably priced. Furthermore, there's a growing emphasis on health-conscious and sustainable food options. Packaged food stocks are considered resilient investments. People always need to eat, so these companies can enjoy consistent demand as long as they stay on top of changing consumer preferences. The industry spans from multinational corporations to smaller specialized firms and is subject to food safety and labeling regulations.
Sales Growth
A company’s long-term sales performance signals its overall quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years.
General Mills is larger than most consumer staples companies and benefits from economies of scale, enabling it to gain more leverage on its fixed costs than smaller competitors. Its size also gives it negotiating leverage with distributors, allowing its products to reach more shelves. However, its scale is a double-edged sword because there are only so many big store chains to sell into, making it harder to find incremental growth. To accelerate sales, General Mills must lean into newer products.
As you can see below, General Mills grew its sales at a sluggish 2.3% compounded annual growth rate over the last three years as consumers bought less of its products. We’ll explore what this means in the "Volume Growth" section.
This quarter, General Mills reported modest year-on-year revenue growth of 2% but beat Wall Street’s estimates by 1.9%.
Looking ahead, sell-side analysts expect revenue to remain flat over the next 12 months, a slight deceleration versus the last three years. This projection doesn't excite us and implies its products will face some demand challenges.
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Volume Growth
Revenue growth can be broken down into changes in price and volume (the number of units sold). While both are important, volume is the lifeblood of a successful staples business as there’s a ceiling to what consumers will pay for everyday goods; they can always trade down to non-branded products if the branded versions are too expensive.
To analyze whether General Mills generated its growth from changes in price or volume, we can compare its volume growth to its organic revenue growth, which excludes non-fundamental impacts on company financials like mergers and currency fluctuations.
Over the last two years, General Mills’s average quarterly sales volumes have shrunk by 1%. This decrease isn’t ideal as the quantity demanded for consumer staples products is typically stable. Luckily, General Mills was able to offset fewer customers purchasing its products by charging higher prices, enabling it to generate 2% average organic revenue growth. We hope the company can grow its volumes soon, however, as consistent price increases (on top of inflation) aren’t sustainable over the long term unless the business is really really special.
In General Mills’s Q4 2025, sales volumes jumped 3% year on year. This result was a well-appreciated turnaround from its historical levels, showing the company is heading in the right direction.
Key Takeaways from General Mills’s Q4 Results
We liked how revenue, gross margin, and EPS beat. However, the company lowered its full year guidance for both organic sales and adjusted EPS. The guidance is weighing on shares, and the stock traded down 3.4% to $63.70 immediately following the results.
Is General Mills an attractive investment opportunity right now? If you’re making that decision, you should consider the bigger picture of valuation, business qualities, as well as the latest earnings. We cover that in our actionable full research report which you can read here, it’s free.