General Mills (NYSE:GIS) shares surged by nearly 3% in the morning session today after the branded consumer foods provider announced better-than-anticipated numbers for the third quarter.
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While revenue declined by 1% year-over-year to $5.1 billion, the figure still came in ahead of expectations by $130 million. In sync, EPS of $1.17 outpaced consensus by $0.13. Furthermore, the company’s operating profit ticked up by 25% to $911 million.
In Q3, its organic net sales declined by 1% as compared to a year-ago period. However, on a two-year compound growth basis, the metric was up by 7%. Additionally, a combination of cost management, favorable net price realization, and product mix helped the company improve its gross margin by 100 basis points to 33.5% during the quarter.
Growth Focus
GIS is experiencing improving volume and market share trends. It plans to focus on its core markets and global platforms to drive profitable growth. GIS foresees consumers’ purchasing power, moderating cost inflation, and stabilizing supply chains as the key drivers of its performance in Fiscal year 2024. The company expects organic net sales growth for the year to be in the range of -1% to flat. Adjusted EPS in 2024 is anticipated to rise by 4% to 5% in constant currency terms. This points to continued gains from the company’s focus on cost optimization during this period.
Is GIS a Good Buy?
General Mills’ stock price has now climbed by around 9.4% year-to-date. The Street has a Hold consensus rating on the stock, and the average GIS price target of $66.67 points to a potential downside of 6.1%. However, analysts’ views on the stock could see a revision following today’s earnings report.
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