General Mills raises FY23 adjusted EPS view to up 4%-6% from up 2%-5%

Consensus $4.11. The updated EPS outlook reflects stronger adjusted operating profit growth and higher net interest expense due to increasing rates. Both the current and previous ranges include a three-point net headwind from divestitures and acquisitions and an estimated one-point headwind from the ice cream recall. Sees FY23 organic net sales up 8%-9%. Sees FY23 adjusted operating profit up 3%-5%. Sees FY23 free cash flow conversion at least 90% of adjusted after-tax earnings. The company said, "General Mills continues to expect the largest factors impacting its performance in fiscal 2023 will be the economic health of consumers, the inflationary cost environment, and the frequency and severity of disruptions in the supply chain. Relative to its previous outlook, the company now expects to generate stronger organic net sales growth through better volume performance and improved price/mix. Volume elasticities in the second half of fiscal 2023 are expected to remain below historical levels. For the full year, the company expects input cost inflation of 14 to 15 percent of total cost of goods sold, HMM cost savings of 3 to 4 percent of cost of goods sold, moderately lower supply chain disruptions compared to the prior year, and increased investment in brand building and other growth-driving activities."