Stock Movers Sep 20, 2026
With Bailey Lipschultz, Senior Equities Reporter at Bloomberg News
General Mills goes into Wednesday's earnings down 26% over 12 months, and on Bailey Lipschultz's read of the terminal it has gained on only two post-earnings days since the end of 2024.
One of those two was the last one, when the stock rose 8.5% on the day. What bought that reaction was heavy promotions and discounting, which is the same thing that now pushes down gross margin, and it has to work again in a week when crude is trading at triple digits.
"How long can you actually kind of bolster or entice people to spend?"
Bailey Lipschultz, a Senior Equities Reporter at Bloomberg News, on Stock Movers, works the post-earnings price history off the terminal and the analyst notes behind it, and covered three consumer names in one week: General Mills, Darden Restaurants and Costco.
The full segment is covered here so you can skip it.
Here are the 4 calls that matter.
Key Takeaways
General Mills is down 26% over 12 months into a print the sell side treats as a turnaround test
It typically trades down after earnings — two gaining sessions since the end of 2024 — and the last one was an 8.5% exception
The question on promotions is how long discounting can keep buying volume before gross margin gives way
Longhorn Steakhouse may have to carry an Olive Garden miss, on comp-sales trends tracked by Morgan Stanley and Evercore ISI
Diners will pay up for a steak but not for a pasta dish they can replicate at home
Costco is being intermediated by Uber and DoorDash while Walmart leans into same-day delivery
1. General Mills' Turnaround
Asked where to start in a week of consumer earnings, Lipschultz took the supermarket first and framed the report as a test of whether the company can grow again.
The sell side is treating Wednesday as a turnaround check
General Mills, yeah, expected to report earnings that penciled in for September 23rd. Big expectations is whether or not they can return to growth. This is really a turnaround story when you look at some of the expectations from the sell side.
Bailey Lipschultz
The stock has already priced a year of disappointment
And when you look at what this company and some of the peers have really been reporting, and even when you look at the stock performance, we're talking about General Mills over the last 12 months down 26%, far cry from where it was a year ago.
Bailey Lipschultz
The macro question she attached to it is the one every consumer staples company faces this quarter: whether the cost of inputs and fuel can be handed to a shopper who is already stretched.
Pass the cost on, or absorb it in the margin
Again, we've got crude oil trading, triple digits potentially, depending on the moment the consumer is feeling pinched. So it's a lot of questions around whether or not inflation is going to impact expectations. Can a company like General Mills pass along those costs to the consumer? Are they going to have to eat that in terms of their margin?
Bailey Lipschultz
2. Promotions Vs Margins
The host said a number of General Mills' peers have warned of price rises to come, and that General Mills leaned on promotions and discounts last time. He asked whether that can hold.
How long discounting can keep working is the debate
I think that's a topic of debate. How long can you actually kind of bolster or entice people to spend? You mentioned the last time they reported earnings, the stock ended up rising 8.5% that day. And it's interesting when we look at General Mills, this is a company that typically trades down after earnings. Just looking on the terminal, if you go back to the end of 2024, after earnings only has gained in two of those sessions.
Bailey Lipschultz
The cost of buying that volume shows up in gross margin, she said, and the competition is not only other brands.
The alternative is the supermarket's own label
And when you're looking at, again, a business that is competing with some of the private label, people may be downgrading and spending on store brand, more cost-effective groceries.
Bailey Lipschultz
3. Olive Garden Or Longhorn
Darden reports the same day. The host asked whether people are trading cereal boxes for Olive Garden. Lipschultz said the evidence points the other way, and that the optimism she has seen is not about the chain the company is known for.
Investors are warmer on Darden, and cooler on Olive Garden
It doesn't seem to be the case. I did actually see a few investors be a bit more optimistic on Darden as a whole, maybe necessarily kind of stepping away from Olive Garden, which they're known for.
Bailey Lipschultz
The household is choosing between groceries and dinner out
Again, we are still dealing with an environment where people are forced to decide whether they want to go out and buy groceries or if they want to go to Olive Garden for some breadsticks.
Bailey Lipschultz
The question is whether the steakhouse can carry the miss
The big thing that I think investors are really going to be focused on is if there is a miss for Olive Garden, how much can Longhorn Steakhouse carry that?
Bailey Lipschultz
That runs against what the host pointed out about beef, whose cost has kept rising. Lipschultz's answer was about what a diner is willing to pay for.
People pay up for the steak they cannot cook as well at home
So it does seem like maybe the divide or at least the conversation, again, just kind of reading through some of the analyst expectations is maybe people are if they're going out to a restaurant are willing to pay up a little bit more for a steak as opposed to going to an Olive Garden and maybe trying to get a pasta dish that they could better replicate at home.
Bailey Lipschultz
Which is the opposite of what the K-shaped story predicts
Again, interesting to see some of these companies report where they have a bit of a portfolio and you're saying, OK, well, Olive Garden, you would expect in an environment where we keep talking about the K-shaped economy would benefit presumably.
Bailey Lipschultz
The comp-sales read from the sell side
But again, trends in at least the metrics that the likes of a Morgan Stanley or Evercore ISI are tracking seem to point towards strong comp sales for Longhorn and maybe a little touch and go for Olive Garden.
Bailey Lipschultz
4. Costco's Delivery Problem
Costco reports on Thursday. Lipschultz's question is not about the membership model but about who now stands between the member and the warehouse.
Walmart's same-day delivery is the competitive frame
The big question still with Costco, when you look at kind of expectations, is how are they competing with the likes of a Walmart or others who have leaned very much into same-day delivery? And we did see some news and some conversations around Uber expanding their partnership with Costco to deliver products, DoorDash saying that they're also going to deliver some Costco products.
Bailey Lipschultz
If members stop walking in, the question becomes how much value a third-party app can drive for the company. She listed what she is watching: membership growth, new sign-ups, comparable sales, and where Costco's own brand sits against its peers.
The Kirkland question came out of the analyst notes
And so one of the things that also stood out to me when looking through some of the analyst notes is how does Costco's Kirkland brand position itself against some of the other peers?
Bailey Lipschultz
She added the part of the business that benefits from expensive fuel rather than suffering from it.
The forecourt is part of the offer
And then also Costco has been able to compete at the pump.
Bailey Lipschultz
And the stock has held up better than the rest of the group
I tend to look at the trailing 12 months down 7.5%, but still well better than it was at the end of last year when there were a lot of these conversations. It has pulled back pretty sharply from where it was back in mid-May
Bailey Lipschultz
Bonus Insights
Consumer earnings season, not big tech
What more do you want? It's that time of the season. We're in consumer earnings season as opposed to big tech.
Bailey Lipschultz
The host's own frame for the week
The segment was set up as three meals: the grocery aisle, the food court and the restaurant table, covering General Mills and Darden on Wednesday and Costco on Thursday. The host also raised the $1.50 hot dog and soda combo as the cheapest thing on the list, which Lipschultz called her favorite.
The membership card survives the app
The host pointed out that a member ordering through Uber Eats or DoorDash still has to show the membership card, digitally. Lipschultz agreed, which is the thing that keeps the delivery partnerships inside the membership model rather than around it.
Her bottom line is that all three names come down to the same question in different aisles: whether a pinched consumer keeps paying up, and whether the company gets the money through the margin, the menu or the membership.
Products, Companies & Tools Mentioned
General Mills (Reports Wednesday, down 26% over 12 months, with the sell side treating it as a turnaround and promotions as the thing propping up volume)
Darden Restaurants, Olive Garden and LongHorn Steakhouse (The portfolio question: investors are warmer on Darden than on Olive Garden, and Longhorn's comp sales may have to carry an Olive Garden miss)
Costco and its Kirkland Signature brand (Reports Thursday, down 7.5% over 12 months; the questions are membership growth, own-brand positioning and fuel)
Walmart (The same-day delivery competition Costco is being measured against)
Uber and DoorDash (Both expanding delivery of Costco products, which puts a third-party app between the member and the warehouse)
Morgan Stanley and Evercore ISI (The firms whose tracked metrics point to strong comp sales at Longhorn and a weaker read at Olive Garden)
Listen to the full episode
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