General Mills, Inc. (NYSE:GIS) has released fourth quarter results today which show that net sales increased by 2% to $3.9 million.
Organic sales moved 1% higher, while operating profit was 8% lower. However, total segment operating profit increased by 7% at constant currency, while adjusted EPS was up 7% to $0.79 versus the same period of the prior year.
The performance of General Mills in the fourth quarter meant that its net sales moved 1% higher. This was a relatively positive result in my view, with the company seeking to return to sustainable growth. Its focus on innovation, marketing and executing its strategy more accurately led to positive organic sales growth in quarters 2-4 of the 2018 fiscal year.
The company was also able to engage in M&A activity during the period. For instance, the acquisition of Blue Buffalo could help to catalyse its EPS growth over the medium term. And with free cash flow improving by 30% during the year, I wouldn’t be surprised if further acquisitions are on the company’s agenda.
Sure, profit performance was not as impressive for the full year as some investors may have been hoping for at the start of the fiscal year. However, progress during the year culminated in a positive performance in the fourth quarter. And if this momentum can continue, then it could lead to improved investor sentiment over the next few years.
In my view, General Mills has a sound strategy. It is still in the relatively early stages of its implementation, but its focus on putting the consumer first could lead to rising sales, margins and profitability.
I also feel that the acquisition of Blue Buffalo could lead to stronger performance for the overall business. Therefore, after a mixed period, I’m optimistic about the company’s stock price potential following today’s fourth quarter results.