General Mills Faces Cost Pressures and Weak Consumption Ahead of Earnings Report
General Mills is preparing for its first-quarter earnings report amid rising input costs and weak consumer demand, which could hinder sales growth. UBS has maintained a 'Sell' rating on the stock despite forecasting adjusted EPS in line with consensus at $0.72 per share. The bank lowered its fiscal 2027 adjusted EPS estimate to $3.01 from $3.03 due to higher cost pressures and improved consumption trends, which still fall below market expectations of $3.08. General Mills has indicated that inflation is trending toward the upper end of its guidance range, adding pressure on margins. The company expects organic sales growth between -1.5% and +0.5%. UBS noted a broader decline in the packaged food subsector due to volatile input costs and weak consumption trends across consumer staples. The stock has underperformed this month despite management reaffirming full-year guidance last week, with UBS suggesting that sales growth is necessary for outperformance but unlikely at present. The firm expects General Mills to maintain its fiscal 2027 adjusted earnings guidance of $3–$3.20 per share.
Tickers: $GIS
Topics: consumption trends cost pressures earnings stock performance