General Mills (NYSE: GIS) reported Q3 EPS of $0.97, $0.05 better than the analyst estimate of $0.92. Revenue for the quarter came in at $5.1 billion versus the consensus estimate of $4.94 billion.

Fiscal 2023 Outlook:

General Mills continues to expect the largest factors impacting its performance in fiscal 2023 will be the economic health of consumers, the inflationary cost environment, and the frequency and severity of disruptions in the supply chain. For the full year, the company continues to expect input cost inflation of 14 to 15 percent of total cost of goods sold, HMM cost savings of 3 to 4 percent of cost of goods sold, moderately lower supply chain disruptions compared to the prior year, and increased investment in brand building and other growth-driving activities.

With stronger and more broad-based business momentum, the company is raising its outlook for fiscal 2023. The updated full-year financial targets are summarized below¹:

Organic net sales are now expected to increase 10 to 11 percent, compared to the previous expectation of approximately 10 percent growth.
Adjusted operating profit is now expected to increase 7 to 8 percent in constant currency, compared to the previous range of up 6 to 7 percent. Both the current and previous ranges include a 3-point net headwind from divestitures and acquisitions and an estimated 1-point headwind from the ice cream recall.
Adjusted diluted EPS is now expected to increase 8 to 9 percent in constant currency, compared to the previous range of up 7 to 8 percent. Both the current and previous ranges include a 3-point net headwind from divestitures and acquisitions and an estimated 1-point headwind from the ice cream recall.
Free cash flow conversion is still expected to be at least 90 percent of adjusted after-tax earnings.
The net impact of divestitures, acquisitions, and foreign currency exchange is expected to reduce full-year reported net sales growth by approximately 4.5 percent, and foreign currency exchange is expected to reduce adjusted operating profit and adjusted diluted EPS growth by approximately 1 percent.

¹ Financial targets are provided on a non-GAAP basis because certain information necessary to calculate comparable GAAP measures is not available. Please see Note 8 to the Consolidated Financial Statements below for discussion of the unavailable information.

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