General Mills Inc (NYSE:GIS) reported first-quarter FY24 sales growth of 4% year-on-year to $4.90 billion, beating the analyst consensus of $4.88 billion.

Organic net sales increased 4%, driven by positive organic net price realization and mix.

North America Retail segment sales increased 3% Y/Y to $3.1 billion. Pet segment sales remained flat at $580 million, while International segment sales jumped 10% to $716 million.

Adjusted EPS of $1.09 topped the consensus of $1.08. 

Gross margin expanded 540 basis points Y/Y to 36.1%. Adjusted gross margin rose 50 basis points to 35.4%.

Operating margin contracted 400 basis points to 19%, and operating income for the quarter declined 14% to $930 million.

General Mills held $490.9 million in cash and equivalents as of August 27, 2023. Operating cash flow for the quarter totaled $378 million.

Outlook: General Mills reaffirmed FY24 organic sales growth outlook of 3% - 4%.

The company sees FY24 adjusted EPS to grow 4% - 6% in constant currency.

General Mills expects the largest factors impacting its FY24 performance will be the economic health of consumers, the moderating rate of input cost inflation, and the increasing stability of the supply chain environment.

Price Action: GIS shares are trading higher by 0.80% at $66.41 in premarket on the last check Wednesday.