General Mills Q3 Profit Tops Estimates, Organic Net Sales Up 16%; Raises FY23 Outlook

General Mills, Inc. (GIS) reported a 20% growth in its third quarter adjusted operating profit from a year ago. Organic net sales were up 16%, for the quarter, driven by positive organic net price realization and mix, with organic pound volume essentially matching year-ago levels. Looking forward, the company increased its full-year guidance on net sales, operating profit, and EPS.

Third quarter net earnings attributable to General Mills declined 16% to $553 million and EPS was down 15% to $0.92, driven by lower operating profit. Excluding items, General Mills reported adjusted earnings of $0.97 per share compared to $0.84. Analysts on average had expected the company to earn $0.92 per share, according to figures compiled by Thomson Reuters. Analysts' estimates typically exclude special items.

Net sales increased 13% to $5.1 billion. Analysts on average had estimated $4.97 billion in revenue.

For fiscal 2023, the company now expects: adjusted EPS to increase 8 to 9 percent in constant currency, compared to the previous range of up 7 to 8 percent. Adjusted operating profit is now expected to increase 7 to 8 percent in constant currency, compared to the previous range of up 6 to 7 percent. Organic net sales are now expected to increase 10 to 11 percent, compared to the previous expectation of
approximately 10 percent growth.

The company noted that its guidance ranges imply a deceleration in net sales and profit growth in the fourth quarter, driven by a much more challenging comparison in last year's fourth quarter.

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