GIS - General Mills sees higher pricing feed earnings beat
General Mills ( NYSE: GIS ) is on watch after narrowly beating estimates with its FQ2 earnings report and hiking its full-year guidance.
Total sales increased 4% to $5.2B during the quarter, including a 5-point headwind from net divestiture and acquisition activity and 1 point of unfavorable foreign currency exchange. Organic sales soared 11% for the quarter, driven by positive organic net price realization and mix, partially offset by lower organic pound volume.
Gross margin was up 20 basis points to 32.7% of sales, driven by favorable net price realization and mix, partially offset by higher input costs and unfavorable mark-to-market effects. Adjusted gross margin was up 100 basis points to 33.2% of sales, driven by favorable net price realization and mix and Holistic Margin Management cost savings, partially offset by input cost inflation, higher other cost of goods sold, and supply chain deleverage.
Adjusted operating profit margin increased 60 basis points to 16.9% during the quarter.
CEO update: "Amid ongoing volatility in the operating environment, we remain focused on driving our Accelerate strategy by investing in brand building and innovation, strengthening our capabilities, and continuing to reshape our portfolio. With strong first-half results and positive momentum on our business, we are increasing our full-year outlook for organic net sales, adjusted operating profit, and adjusted diluted EPS growth."
Looking ahead, General Mills ( GIS ) sees organic sales growth of 8% to 9% for FY23 vs. a prior expectation for 6% to 7% growth. Adjusted operating profit is now expected to increase 3% to 5% percent in constant currency compared to the previous range of between flat and up 3% in constant currency. EPS is expected to increase 4% to 6% in constant currency compared to the previous range of up 2% to 5% percent in constant currency. Free cash flow conversion is still expected to be at least 90% of adjusted after-tax earnings
Shares of General Mills ( GIS ) slipped 0.44% in premarket action on Tuesday after the earnings topper.
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General Mills sees higher pricing feed earnings beat