General Mills (NYSE:GIS) shares rose on Wednesday after the company posted a healthy beat on first quarter earnings and elevating full-year forecasts.
For the first quarter of its 2023 fiscal year, the Minnesota-based consumer foods manufacturer notched a 4% jump in net sales to $4.7B and a 13% rise in adjusted diluted EPS to $1.11. Analysts had anticipated $1.00 and $4.72B, respectively. Operating profits also rose notably, jumping 8% on an adjusted basis to $1.1B as North American retail and pet segment sales outpaced declines in foodservice and international businesses.
“We continue to deliver strong performance in a highly volatile operating environment,” CEO Jeff Harmening said. “Given the strength of our first-quarter results and confidence in our ability to adapt to continued volatility ahead, we are increasing our full-year outlook for net sales, operating profit, and EPS growth.”
The raising of expectations for the full year came despite the expectation of headwinds in terms of the “economic health of consumers, the inflationary cost environment, and the frequency and severity of disruptions in the supply chain.” Indeed, the company now expects increased input cost inflation to range from 14% to 15% of total cost of goods sold for 2023. Strong sales growth moving forward is anticipated to offset these adverse trends.
General Mills (GIS) said it now expects organic net sales to grow 6% to 7%, as compared to the prior 4% to 5% expectation, while adjusted operating profit is now expected to range between 0 to 3%, up notably from the -2% to 1% included in prior forecasts. Finally, adjusted diluted EPS is now expected to increase 2% to 5%, up from the previous estimate of 0 to 3%.