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GIS guidance low, on sale today pure-market
Quote:March 14 (Reuters) - U.S. packaged foods group General Mills Inc estimated quarterly earnings below analysts' expectations due to lower sales volumes and increased marketing spending in its U.S. yogurt business.

The company, known for its Yoplait yogurt, Cheerios cereal and Haagen-Dazs ice cream, said it expects adjusted earnings of 61-62 cents per share for the third quarter.

Analysts on average expect a profit of 68 cents per share, according to Thomson Reuters I/B/E/S.
Did they give a reason for the lower sales volumes? Increased competition? Consumers changing to store brands?
In these cases I always like to wait for the actual earnings release. For some reason there is always a sell-off as they fail to reach previous consensus (even if they had just said that they would miss it). So it will probably slide a bit a lower on the actual release a few days from now.
My blog with what I consider the best dividend stocks
From the investor relations web site (emphasis mine):

General Mills said its sales and operating profit for the third quarter ended February 23, 2014, will reflect approximately 1 percent lower volume, consistent with recent food industry trends in developed markets, as well as negative foreign currency translation effects. In addition, results for the quarter include incremental consumer marketing and merchandising investment in the company's U.S. yogurt business, where response to-date has been encouraging. Third-quarter operating profit for the company's U.S. Retail segment is expected to be 10-11 percent below strong year-ago results that grew 13 percent. Total segment operating profit is also expected to be below last year's strong third-quarter level. Adjusted diluted EPS for the fiscal 2014 third quarter are expected to total approximately $0.61-$0.62.

General Mills expects to record strong double-digit growth in adjusted diluted EPS in the fourth quarter of fiscal 2014, when the expected rate of input cost inflation, the quarterly tax rate, and the average number of shares outstanding will each be well below prior-year levels.

Consistent with General Mills strong operating cash flows, anticipated earnings growth in 2014, and continuing growth expected in fiscal 2015, the General Mills board of directors earlier this week declared an 8 percent increase in the quarterly dividend, payable May 1, 2014, to shareholders of record April 10, 2014.

Rough patch? It seems to me. Most of the food processors are having a hard time of it lately.

An 8% increase in the dividend signals, to me, that the board is confident they can ride it out.

“While the dividend itself is merely a rearrangement of equity, over time it's more like owning an apple tree. The tree grows the apples back again and again and again, and the theoretical value of the tree doesn't change just because of when the apples are about to fall.” - earthtodan

Now this:

GIS is -4% on the news. What's everyone think? There are a lot of comments on Seeking Alpha about how this is a buying opportunity, but the company lowered its own long term EPS growth guidance from high single digits to low single digits. Comments like that are equivalent to thinking you're smarter than the company about its own future, no?
I'm holding onto my GIS but adding to it hasn't been on my radar in quite some time


Share count reduced 21% over last decade
Decent yield (3.2%), decent 5-year chowder (13.5%)


High-ish EV / EBITDA of 12.1
High-ish historical PE 19.2
High-ish payout ratio 57.5%
Low interest coverage 4.1

This is a buying opportunity sure ... but unless you're underweight in Consumer Defensive, which would be kind of hard to believe for any DGI long-ish in the tooth, there's lots of other great stuff out there

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