General Mills is slipping in early trading, after reporting fiscal fourth-quarter earnings .
General Mills (GIS) said it earned $1.10 a share on revenue of $5.02 billion. Analysts were looking for EPS of 88 cents on revenue of $4.98 billion.
The company didn't provide a hard full-year forecast, but said that the largest factor for fiscal 2021 will of course be how strong the demand for at-home food consumption remains amid the pandemic. That said, General Mills expects "consumer concerns about Covid-19 virus transmission and the recession to drive elevated demand for food at home, relative to pre-pandemic levels."
General Mills shares have climbed more than 15% year to date through Tuesday's close, one of the strongest showings in the packaged food group. It's been helped by the fact that the vast majority—about 85%—of its revenue came from at-home food before the pandemic, as companies that catered more to restaurants have been hit by the mandatory closures and reduced capacity at eateries. In addition, it also owns the Blue Buffalo pet food brand, a nice tailwind at a time when more people are adopting animals during stay-at-home orders.
Barron's has also argued that consumers will be eating more at home for longer, a challenge for restaurants , especially as states rollback reopening plans amid virus spikes .
However the shares are down 2.5% to $60.11 before the start of regular trading. That could be because, given the shares' rally, hopes were high going into the quarter, which takes some of the bite out of a nearly 21% year-over-year increase in sales. Margins were also a little light, and the company's reluctance to provide guidance comes after peers have given full-year forecasts . Nor does it help that stocks are falling this morning.
Still, General Mills stock is holding support, which sits just below $60 a share. As long as it does, Wednesday's earnings decline probably doesn't mean much.