General Mills Inc (NYSE:GIS) stock fell 1.18% (As on March 21, 11:43:11 AM UTC-4, Source: Google Finance) after the company reported better-than-expected sales and profits for the fiscal third quarter as higher prices for its cereals and other food items offset weaker demand and rising input and labor costs. Adjusted gross margin was up 20 basis points to 34.0 percent of net sales, driven primarily by HMM cost savings and favorable net price realization and mix, partially offset by higher other supply chain costs, input cost inflation, and supply chain deleverage. Adjusted operating profit of $914 million increased 14 percent in constant currency, driven primarily by lower compensation and benefits expenses. Adjusted operating profit margin was up 220 basis points to 17.9 percent. General Mills ended the quarter with cash and cash equivalents of $588.6 million, long-term debt of $11,015.1 million and total shareholders’ equity of $9,691.3 million.

Moreover, third-quarter net sales for General Mills’ North America Retail segment of $3.2 billion essentially matched year-ago results. Third-quarter net sales for the Pet segment were down 3 percent to $624 million, driven by lower pound volume. Third-quarter net sales for the North America Foodservice segment increased 1 percent to $552 million. Third-quarter net sales for the International segment were down 3 percent to $680 million.

GIS in the third quarter of FY 24 has reported the adjusted earnings per share of $1.17, beating the analysts’ estimates for the adjusted earnings per share of $1.04, according to the Zacks Consensus Estimate. The company had reported 1 percent decline in the adjusted revenue to $5.1 billion in the third quarter of FY 24, beating the analysts’ estimates for revenue of $4.95 billion. This is backed by higher prices for its breakfast cereals, snack bars and pet food products that helped cushion a blow from slowing demand. Organic net sales were 1 percent below year-ago.

General Mills expects that the biggest factors impacting its performance in the fiscal 2024 are likely to be consumers’ economic status, the moderating rate of cost inflation and the rising stability of supply-chain status.

For the fiscal 2024, organic net sales are anticipated to be down 1% to flat year over year. The adjusted operating profit growth at cc is anticipated at 4-5%. Management anticipates adjusted earnings per share (EPS) growth of 4% and 5% at cc. The company envisions a free cash flow conversion of at least 95% of adjusted after-tax earnings.