General Mills beats by $0.03, misses on revs; reaffirms FY16 guidance :
- Reports Q3 (Feb) earnings of $0.65 per share, excluding non-recurring items,$0.03 better than the Capital IQ Consensus of $0.62; revenues fell 8.0% year/year to $4 bln vs the $4.08 bln Capital IQ Consensus. FX reduced net sales growth by 4 percentage points. Pound volume reduced net sales growth by 5 percent, and net price realization and mix contributed 1 point of net sales growth. The divestiture of the Green Giant business in November 2015 reduced net sales growth by 3 points and pound volume by 4 points.
- Adjusted gross margin increased 160 bps due to benefit from cost savings initiatives more than offsetting modest input cost inflation.
- Total segment operating profit totaled $679 million, down 3%. In constant currency, total segment operating profit declined 1%.
- "We anticipate the impact of the Green Giant sale, continued foreign exchange headwinds, and the comparison to the year-ago period that included an extra week will result in a reported decline in fourth-quarter net sales, total segment operating profit, and adjusted diluted EPS. However, on a comparable basis, we expect our net sales growth to turn positive as our Consumer First efforts continue to take hold. For the full year, we are confident that we will deliver the growth goals we updated in December."
- General Mills reaffirmed its 2016 full-year growth outlook, which includes the impact of the Green Giant divestiture. Net sales in constant currency are expected to decline at a low single-digit rate from the 2015 levels that included a 53rd week (consensus -5.6% including FX). Total segment operating profit is expected to essentially match last year's levels in constant currency. Constant-currency adjusted diluted EPS is expected to grow at a low single-digit rate from the base of $2.86 earned in fiscal 2015 (consensus $2.85). The company estimates an 8-cent headwind from currency translation in 2016.
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