General Mills (GIS) Tops Q2 EPS by 3c; Reaffirms FY15 Outlook

General Mills (NYSE: GIS) reported Q2 EPS of $0.80, $0.03 better than the analyst estimate of $0.77. Revenue for the quarter came in at $4.71 billion versus the consensus estimate of $4.79 billion.

General Mills Chairman and Chief Executive Officer Ken Powell said, "Second-quarter results were broadly in line with the updated outlook we provided in early November. Net sales declined for the quarter as anticipated, reflecting continued weak food-industry trends in the U.S. and slowing growth in key emerging markets. Adjusted diluted EPS came in slightly better than our estimate, primarily due to differences in expense timing. These quarterly results keep us on track to achieve the full-year fiscal 2015 targets announced last month."

General Mills reaffirmed FY2015 guidance.

Powell said, "The operating environment remains challenging but, as we move into the second half of our fiscal year, we expect to renew sales and profit growth." The company's second-half marketing plans include a strong line-up of new product introductions worldwide, along with product news on many key established brands. Savings from the company's ongoing Holistic Margin Management (HMM) program are targeted to exceed $400 million in fiscal 2015, and several incremental cost-reduction actions launched this year are expected to contribute to margin improvement in the second half. The company said these initiatives to streamline its North American supply chain network and reduce overhead costs are on track to generate $40 million in cost savings in the second half of fiscal 2015. Cumulative annual savings from these efforts are expected to total between $260 and $280 million in fiscal 2016, and exceed $350 million in fiscal 2017.

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