General Mills Inc (NYSE:GIS) stock rose 0.055% (As on June 27, 11:46:34 AM UTC-4, Source: Google Finance) after the company posted a bigger-than-expected drop in quarterly sales, as cash-strapped consumers cut back on its higher-margin products and turned to cheaper alternatives. Volume and pricing mix were down 2 and 4 percentage points, respectively. Retail sales in North America fell 7% to $2.85 billion, weighed down by lower pound volume and unfavorable selling prices. North American foodservice sales rose 4% to $589 million, buoyed by robust growth on breads, cereal and frozen biscuits, according to the company. Pet sales fell to $602.1 million from $655 million a year ago. International revenue slipped 10% to $667.5 million due to price declines and foreign-exchange headwinds, partially offset by higher pound volume.

GIS in the fourth quarter of FY 24 has reported the adjusted earnings per share of $1.01, beating the analysts’ estimates for the adjusted earnings per share of 99 cents. The company had reported the adjusted revenue decline of 6 percent to $4.71 billion in the fourth quarter of FY 24, missing the analysts’ estimates for revenue of $4.85 billion, according to LSEG data. The company’s adjusted operating profit of $800 million was down 10 percent in constant currency, primarily due to lower adjusted gross profit dollars, partially offset by lower selling, general, and administrative expenses. Organic net sales were down 6 percent and slowed from the third-quarter trend, driven by the trade expense timing comparison, a reduction in retailer inventory, and a headwind in International segment results.

For fiscal 2025, General Mills expects adjusted EPS to be in a range of down 1% to up 1% in constant currency terms from the $4.52 a share delivered in the previous year. The Street is looking for normalized EPS of $4.73. Organic sales are set to be flat to a 1% increase versus the 6% decline in fiscal 2024. The company also anticipates a free cash flow conversion of at least 95 percent of adjusted after-tax earnings.

General Mills sees volume trends in its categories “gradually” improving as the year progresses, but category dollar growth is anticipated to be below its long-term projections. The company forecasts to generate cost savings of about 4% to 5% of cost of goods sold, which is expected to exceed the estimated input cost inflation of 3% to 4% of cost of goods sold.