General Mills stock falls as Q4 sales drop 6% YoY

General Mills (GIS) shares are trading lower Wednesday following the company's mixed fourth quarter results release. The food manufacturing giant reported a notable 6% year-over-year decline in sales for the quarter alongside a softer-than-expected outlook for the upcoming quarter.

Morning Brief co-hosts Seana Smith and Brad Smith break down the details.

For more expert insight and the latest market action, click here to watch this full episode of Morning Brief.

This post was written by Angel Smith

Video transcript

All right, let's also talk a little General Mills where uh some people might.

Well.

Anyway, I was gonna try and make a correlation to Whirlpool.

There is none.

Anyway, General Mills shares falling this morning after reporting mixed fourth quarter results and issuing softer than expected guidance.

The Cheerios maker also seeing sales fall 6% from a year ago.

Shares are down 6% right now.

And the cereal business, I mean, I always do a command that for cereal.

Just see what they're saying about that.

Uh They did mention that within the North America retail segment, net sales were down about 1% to $12.5 billion organic net sales 1% below a year ago results uh that actually grew double digits.

And so, um it's interesting, I mean, pet seems like one of the stronger elements of the business right now, uh especially as you're kind of evaluating what North America retail for them is looking like in that pullback of about 3% for the full year as we're tracking at this point.

Yeah, I think when you take a look at General Mills business, the fact that they did come in below expectations on the guidance.

Lots of questions about what is going to happen to this business.

At least in the short term, they're under a tremendous amount of pressure to lower prices.

At the same time that they do do that, then they need to significantly boost volumes.

And you're doing this at a time when millions of Americans are still under a tremendous amount of pressure from a very sticky and persistent inflation.

So again, it is a tough set up for a name like General Mills.

And there is some caution.

I was looking at the quick uh analyst commentary here or reaction I should say to these um to these results and and there was some speculation that we could actually see a softer uh second half coming up when it comes to the pet business and maybe it's not gonna be enough to offset some of the weakness elsewhere.

So again, they're under a tremendous amount of pressure to lower prices.

They also need to boost volumes and to offset some of that pressure on margins.

So we'll see whether or not that can be done.

Seems like they need some new ideas and they know it.

They said they plan to drive even more of the reinvestment and exciting growth ideas that meet evolving consumer needs.

So I don't know what that looks like.

You've already got Honey Nut Cheerios out there.

What more investment and uh innovation is there?