Nike and General Mills both reported fiscal fourth-quarter results that suggest their businesses are stabilizing, but neither turnaround is complete. Nike posted Q4 revenue of $10.97 billion, down 1% year over year, while adjusted net income of $1.07 billion or $0.20 per share beat expectations of $0.11. Gross margin expanded to 49.2%, and wholesale revenue rose 4%, though Nike Direct revenue declined 7%. General Mills reported Q4 sales of roughly $4.61 billion, up 1% year over year, and adjusted operating profit of $705 million or $0.95 per share, well above estimates of $0.82. Its North American retail segment sales declined 4%, an improvement from a 10% drop a year earlier, and adjusted gross margin expanded 150 basis points to 34.2%. Both stocks are trading near 52-week lows, with General Mills offering a 6% annual dividend yield and an 11X forward earnings multiple, while Nike trades under $50 a share. However, Nike still faces challenges in Greater China and its direct-to-consumer business, and General Mills continues to battle cautious consumer spending.
General Mills IncQ4 sales up 1%, adjusted operating profit beat estimates, and gross margin expanded 150 bps.
Nike IncQ4 revenue down 1%, Nike Direct revenue declined 7%, and challenges in Greater China persist.