Foodservice

General Mills lifts Q3 2022 earnings, raises guidance

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March 23, 2022

General Mills Inc. boosted its Q3 2022 earnings over the prior year period and raised its full year outlook for 2022, according to an earnings release.

Highlights include:

• Net sales were essentially flat compared to last year at $4.54 billion for the quarter ending Feb. 27, 2022, including a 3-point net headwind from divestiture and acquisition activity. Organic net sales increased 4%, reflecting 7 points of positive organic net price realization and mix, partially offset by a 4-point headwind from lower organic pound volume.
• Net earnings rose from $595.7 million to $660.3 million in the comparative quarters, while basic earnings per share rose from 97 cents to $1.09 and diluted EPS rose from 96 cents to $1.08.
• Adjusted diluted EPS rose from 82 cents to 84 cents.
• Third-quarter net sales for General Mills' North America retail segment increased 1% from $2.78 billion to $2.81 billion, driven by favorable net price realization and mix, partially offset by lower pound volume.
• Third-quarter net sales for the North America foodservice segment increased 22% from $357.9 million to $437 million, driven by favorable net price realization and mix, including market index pricing on bakery flour and positive contributions from volume growth.
• Third-quarter net sales for the international segment were down 23% from $939.8 million to $721 million, including a 20-point headwind from the divestitures of the European yogurt and dough businesses and 2 points of unfavorable foreign currency exchange.

Shares traded today at $64.26 against a 52-week range of $56.67 to $69.95.

The quarterly revenue of $4.54 billion missed analyst estimates by $10 million, while the non-GAAP EPS of 84 cents beat estimates by 6 cents, according to Seeking Alpha.

"Our solid execution in a highly volatile environment enabled us to close the third quarter with improved momentum," Chairman and CEO Jeff Harmening said in the release. "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. 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."

The company raised its guidance for fiscal 2022 to reflect year-to-date performance and an outlook for strong top- and bottom-line growth in the fourth quarter.

• Organic net sales are now expected to increase approximately 5%, including an expectation for organic net price realization and mix to increase sequentially from the third quarter to the fourth quarter. Full-year organic net sales were previously expected to increase 4% to 5%.
• Constant-currency adjusted diluted EPS is now expected to range between flat and up 2%, driven by the higher outlook on adjusted operating profit. Adjusted diluted EPS was previously expected to range between down 2% and up 1%.