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Shares of General Mills (NYSE:GIS) are up about 2% in premarket after the company reported stronger-than-expected results for its third quarter.
General Mills reported a 13% increase in sales to $5.13 billion, ahead of the $4.94B consensus. Organic sales rose 16%, easily ahead of the expected increase of 10.5%, boosted by the 18% surge in sales in the North America Retail organic unit.
“We built on our positive momentum and delivered strong results in the third quarter, including broad-based growth across each of our segments,” said General Mills’ chairman and chief executive officer Jeff Harmening.
“With strong year-to-date performance and good visibility to the fourth quarter, we are once again raising our fiscal 2023 outlook for our key financial measures.”
The updated forecast sees organic net sales rising 10-11%, compared to the prior forecast for 10% growth. The adjusted EPS is seen up 8-9%, up from the prior range of +7-8%.
Mizuho analysts said GIS delivered a “solid beat.”
“FQ3’s beat was of strong quality; elasticities remain muted, margins are recovering, and service levels are improving. We reiterate the strength of GIS’s execution is under-appreciated by the Street and upside likely exists to out-year expectations. However, shares already reflect material market defensiveness (~20% premium vs. U.S. Food peers on CY23E EBITDA vs. 5-yr avg. 5%) which likely limits the degree of near-term upside (though we do expect shares to trade higher today),” they said.
Goldman Sachs analysts also agreed as GIS managed to deliver “strong results.”
“We expect the stock to trade higher on the back of strong results and raised outlook,” they added in a note.
