Branded food company General Mills, Inc. (GIS) reported Wednesday a profit for the third quarter that increased 11 percent from last year, driven primarily by a lower adjusted tax rate and lower net interest expense.
Adjusted earnings per share topped analysts’ estimates and quarterly net sales met it. The company raised its adjusted earnings and organic net sales growth guidance for the full-year 2022.
“Demand for our brands remains robust, and our team has shown great agility to overcome disruptions throughout the supply chain and deliver for our customers and consumers,” said Chairman and CEO Jeff Harmening.
For the third quarter, net earnings attributable to General Mills increased to $660.3 million or $1.08 per share from $595.7 million or $0.96 per share in the prior-year quarter.
Excluding items, adjusted earnings for the quarter were $0.84 per share, compared to $0.82 per share in the year-ago quarter.
On average, 17 analysts polled by Thomson Reuters expected the company to report earnings of $0.78 per share for the quarter. Analysts’ estimates typically exclude special items.
Net sales for the quarter edged up to $4.54 billion from $4.52 billion in the same quarter last year. Organic net sales were up 4 percent. Analysts expected revenues of $4.54 billion for the quarter.
Net sales for the North America Retail segment were up 1 percent to $2.81 billion, net sales for the Pet segment grew 30 percent to $567.7 million and net sales for the North America Foodservice segment increased 22 percent to $437.1 million from last year. Meanwhile, International net sales declined 23 percent to $721.0 million from last year.
Gross margin was down 350 basis points to 30.9 percent of net sales, driven by higher input costs and unfavorable mark-to-market effects, partially offset by favorable net price realization and mix.
“We expect to drive strong growth in the fourth quarter, fueled by accelerating net price realization. With confidence in our plans and positive momentum on our business, we’re raising our guidance for fiscal 2022,” added Harmening.
Looking ahead to fiscal 2022, General Mills raised year-to-date performance and an outlook for strong top- and bottom-line growth in the fourth quarter.
The company now projects constant-currency adjusted earnings per share to range between flat and up 2 percent. Previously, it was expected to range between down 2 percent and up 1 percent.
Organic net sales are expected to increase approximately 5 percent, up from the previous expectation for an increase of 4 to 5 percent.
The Street is currently looking for earnings of $3.74 per share on revenues of $18.80 billion for the full-year 2022.
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