What Happened:
Shares of packaged foods company General Mills (NYSE:GIS) fell 5.9% in the afternoon session after the company reported second-quarter earnings results. Organic revenue unfortunately missed analysts' expectations, and its total report revenue also missed Wall Street's estimates. The weak topline was impacted by a reduction in retailer inventory and a headwind in the International segment. Management called out an "uncertain macroeconomic backdrop for consumers across its core market. As a result, FY25 dollar growth is expected to fall below the company's long-term growth projections. Management now expects organic net sales growth to be roughly flat in FY'25. Additionally, full-year EPS guidance was below expectations. Overall, this quarter could have been better.
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What is the market telling us:
General Mills's shares are not very volatile than the market average and over the last year have had only one move greater than 5%. In context of that, today's move is indicating the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
General Mills is down 3.5% since the beginning of the year, and at $64.42 per share it is trading 21.3% below its 52-week high of $81.86 from June 2023. Investors who bought $1,000 worth of General Mills's shares 5 years ago would now be looking at an investment worth $1,256.
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