Updated at 12:31 pm EST
General Mills (GIS) - Get General Mills Inc. Report posted stronger-than-expected fourth quarter earnings Wednesday, and boosted its quarterly dividend, despite "significant inflation and supply chain disruptions" that pressured profit margins.
General Mills said adjusted profits for the three months ending on May 29, the group's fiscal fourth quarter, rose 23.1% from last year to $1.12 per share, well ahead of the Street consensus forecast of 91 cents. Group revenues, General Mills said, were up 8% to $4.9 billion, narrowly topping analysts' estimates of a $4.805 billion tally.
The group also boosted its quarterly dividend payment by 6%, to 54 cents per share.
Amid surging input costs, the Betty Crocker and Pillsbury brand owner said its adjusted gross margin fell 70 basis points from last year to 33.8%, a figure that matched Refinitiv forecasts, with the company adding it expects "double-digit" inflation costs to clip profits in the coming year.
General Mills said its sees adjusted earnings to be between flat to 3% higher from 2022 levels. Group sales should rise between 4% and 5%, the company said.
“I am proud of the way our team advanced our Accelerate strategy this year by executing well on our core business while taking significant steps to reshape our portfolio," said CEO Jeff Harmening. "Though significant inflation and supply chain disruptions put pressure on our margins, we responded quickly to address those challenges and keep our brands on shelf for our customers and consumers."
“We plan to build on our strong momentum in fiscal 2023 by continuing to compete effectively, investing in our brands and capabilities, and reshaping our portfolio," Harmening added. "Importantly, our board reinforced its confidence in our performance and outlook by approving a six percent increase in our dividend, underlining our commitment to driving strong returns for General Mills shareholders over the long term.”
General Mills shares were marked 36% higher in early afternoon trading following the earnings release to change hands at $74.51 each, a move that would nudge the stock's year-to-date gain to around 11%.