General Mills Inc. (GIS) reports second-quarter earnings Wednesday morning, and if history is any guide, shareholders might want to brace themselves. The stock has fallen after each of the last four earnings reports, declining an average of 2.75% each time. In fact, shares have rallied just twice over the last 10 reports. So the question investors are asking: will this time be different?
The setup heading into Wednesday isn't exactly inspiring confidence. Analysts have been lowering their price targets in recent weeks, and expectations appear muted. But here's the twist: low expectations can sometimes be a good thing, especially when a company has a track record of delivering surprises.
What Wall Street Expects
Analysts are projecting Q2 revenue of $4.78 billion, a notable decline from $5.24 billion in last year's second quarter. The company has beaten revenue estimates in five of the last 10 quarters, including the most recent first quarter, so there's precedent for outperformance.
On the earnings side, the Street expects $1.02 per share, down from $1.40 in the year-ago quarter. But here's where General Mills has been consistently impressive: the company has beaten EPS estimates for more than 10 consecutive quarters. That's a pretty solid streak.
Analyst Perspectives: Cautiously Optimistic to Downright Skeptical
RBC Capital analyst Nik Modi thinks General Mills could deliver an in-line quarter and reiterate full-year guidance, which he believes would be "positive for the stock." His view? "Progress towards a recovery should be rewarded."
Modi expects the November quarter in the North American Retail sector to show a year-over-year sales decline, but one that's better than past quarters, signaling improving trends. He notes that the company is "one of few companies that have been actively cutting price to restore volumes," and highlights that the stock trades at a lower price-to-earnings multiple compared to its packaged food peers.
"Valuation remains depressed, which is in part due to poor fundamentals in the packaged food space," Modi said, adding that he expects improvement in both North American Retail and North American Pet segments.
Meanwhile, Freedom Capital Markets Chief Market Strategist Jay Woods is more skeptical. He points out that General Mills shares have struggled in 2025, and he's not convinced an earnings report will change the trajectory.
"The stock doesn't tend to be volatile when reporting results. The average move is +/- 2.9%," Woods noted. That modest reaction, combined with the four-quarter losing streak, suggests the market has been consistently underwhelmed.
What to Watch Wednesday
A few key areas will determine whether this earnings report breaks the pattern. First, can General Mills deliver another double beat? The company managed to exceed both revenue and EPS estimates in the first quarter, and with expectations running low, there's room for a positive surprise.
Second, investors will be watching the pet segment closely. General Mills has been targeting the fast-growing fresh pet category and expanding its Blue Buffalo brand. Any signs of momentum here could be a bright spot.
Third, there's the weight-loss drug wildcard. The company briefly discussed the potential impact of GLP-1 drugs during its October investor day. How General Mills is adapting its product portfolio to address changing consumer behavior could be a talking point on the conference call.
Finally, any update or revision to full-year guidance will move the needle. With price targets coming down and sentiment weak, even a confirmation of existing guidance could be viewed positively if the company shows conviction in its recovery trajectory.
GIS Price Action: General Mills stock is up 0.4% to $47.26 on Tuesday, trading within its 52-week range of $45.15 to $67.35. Shares are down 25.8% year-to-date in 2025.
