General Mills (NYSE: GIS) reported Q3 EPS of $0.83, $0.14 better than the analyst estimate of $0.69. Revenue for the quarter came in at $4.2 billion versus the consensus estimate of $4.19 billion.

Outlook

For the fourth quarter of fiscal 2019, General Mills expects Blue Buffalo's net sales and segment operating profit growth will accelerate meaningfully, driven by significant distribution expansion in the FDM channel. Fourth-quarter results for the base business will be impacted by the comparison against the year-ago period that included the strongest quarterly performance of fiscal 2018.

Based on its year-to-date performance and fourth-quarter expectations, the company updated its full-year fiscal 2019 targets:

• Organic net sales are expected to finish toward the lower end of the initial guidance range of between flat and up 1 percent. Net sales are also expected to finish toward the lower end of the range of 9 to 10 percent growth in constant currency, including the impact of the Blue Buffalo acquisition.
• Constant-currency adjusted operating profit is expected to finish toward the upper end of the initial guidance range of 6 to 9 percent growth from the base of $2.6 billion reported in fiscal 2018.
• Constant-currency adjusted diluted EPS are now expected to range between flat and up 1 percent from the base of $3.11 earned in fiscal 2018, which is ahead of the previous range of flat to down 3 percent.
• The company now expects free cash flow conversion of at least 105 percent of adjusted after-tax earnings, which is ahead of the previous guidance of at least 95 percent.
• Currency translation is expected to reduce reported net sales by 1 to 2 percentage points in fiscal 2019 and is not expected to have a material impact on full-year adjusted operating profit or adjusted diluted EPS.

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