The food company reported sales increased 3% to $5.0B during the quarter. The sales gain included an one-point headwind from net divestiture and acquisition activity and one point of unfavorable foreign currency exchange. Price/mix was up 10% during the quarter, while volume was down 6%. Organic net sales were up 5% vs. +6.9% consensus, driven by positive organic net price realization and mix, partially offset by lower organic pound volume, including a headwind from a reduction in retailer inventory in North America Retail.
Organic sales were up 7% for both the North America Foodservice segment and Pet segment to offset a 1% drop in the International segment and 2% increase in the North America Retail segment.
Adjusted gross margin was up 120 basis points year-over-year to 35.0% of sales, driven by favorable net price realization and mix, partially offset by higher input costs, including 9 percent input cost inflation in the quarter.
Adjusted EPS of $1.12 was up 1% from a year ago in constant currency, driven primarily by lower net shares outstanding, partially offset by lower benefit plan non-service income. The consensus expectation was for an EPS tally of $1.05.
Looking ahead, General Mills (GIS) sees FY24 organic net sales increasing 3% to 4%. EPS of $4.47 to $4.56 is anticipated vs. $4.48 consensus.
Shares of General Mills (GIS) fell 4.04% in premarket action on Wednesday to $77.63.