General Mills (NYSE: GIS) is set to release its earnings report for the first quarter of fiscal 2025 on September 18, 2024. Analysts are projecting that the company will report earnings per share (EPS) of around $1.05 to $1.06, down slightly from the $1.09 EPS from the same quarter last year. Revenue is also expected to decline by approximately 2.2% year-over-year, with estimates around $4.8 billion, compared to $4.9 billion for Q1 of 2024.

General Mills has consistently exceeded earnings expectations in recent quarters, beating consensus estimates for the last nine quarters. Despite the softer outlook this time, there remains optimism that the company may again outperform expectations, especially given its history of managing input costs and maintaining profitability amid inflationary pressures. Analysts have noted that General Mills is facing challenges related to rising costs, including labor and raw materials, which have put pressure on margins. However, the company’s ability to deliver value-driven and health-conscious products, such as Cheerios and Yoplait, continues to support its position in the competitive consumer staples market.

Looking at the broader sector, General Mills operates within the packaged food industry, which includes competitors like Kellogg’s (NYSE: K) and Conagra Brands (NYSE: CAG). Both of these companies have experienced similar challenges, with inflation affecting consumer purchasing behavior. Kellogg’s, for example, has also reported lower-than-expected sales growth due to these economic headwinds. However, companies in the sector that have diversified product portfolios or strong brand loyalty, like General Mills, are better positioned to weather these challenges.

Historically, General Mills’ stock has seen moderate fluctuations before and after earnings releases. For example, after its last earnings report in June 2024, the stock rose slightly due to better-than-expected EPS. The stock currently trades at a price-to-earnings (P/E) ratio of about 17.3, which is in line with the broader consumer staples sector, making it an attractive option for investors seeking stability and dividends.

The company’s product portfolio is diverse, spanning cereals, snacks, dairy, and pet food. Brands like Cheerios, Betty Crocker, and Blue Buffalo continue to perform well in their respective segments, with particularly strong performance in pet foods, which is a fast-growing category for General Mills. In contrast, some of the company’s other segments, such as its North American retail division, have experienced slower growth due to shifting consumer preferences and increased competition.

As General Mills prepares to release its latest results, investors will be closely watching not just for the numbers, but for management’s outlook on how the company plans to navigate the ongoing challenges of cost inflation and changing consumer trends. If the company continues its trend of beating expectations, it may provide a short-term boost to the stock, which has historically traded higher post-earnings when surprises occur.

With the upcoming report, all eyes will be on General Mills to see how it fares in a challenging market environment.