General Mills Inc (NYSE:GIS) stock fell 0.80% (As on September 20, 11:24:20 AM UTC-4, Source: Google Finance) after the company topped first-quarter sales and profit estimates, as higher prices for its breakfast cereals, snack bars and pet food products helped offset slowing demand. Packaged food makers have hiked prices multiple times over the past year, to counter the spiraling impact from higher labor and input costs, even as some of these expenses have now eased from their peaks. The higher prices have helped expand top-line and margins, volumes have taken a hit as customers have been less willing to spend on expensive food items and shifted to cheaper private label alternatives. General Mills’ gross margin rose 540 basis points to 36.1% in the first quarter. Its organic average selling prices rose 7 points, while organic volumes were down 2 points. Organic sales at North America retail segment grew 4% as it saw a “modest” rebuild of retailer inventory in the quarter after being hit by weaker demand in the previous quarter. Cash provided by operating activities totaled $378 million in the first quarter compared to $389 million in the prior year. Capital investments totaled $142 million compared to $91 million a year ago. Dividends paid increased 7 percent to $348 million.

GIS in the first quarter of FY 24 has reported the adjusted earnings per share of $1.09, beating the analysts’ estimates for the adjusted earnings per share of $1.08. The company had reported the adjusted revenue growth of 4 percent to $4.91 billion in the first quarter of FY 24, beating the analysts’ estimates for revenue of $4.88 billion, according to LSEG data. Higher price realization and mix partially offset lower pound volume, the owner of brands like Cheerios cereal and Betty Crocker cake mix noted. Adjusted operating profit of $899 million increased 2 percent in constant currency, driven by higher adjusted gross profit dollars, partially offset by higher adjusted SG&A expenses, including a double-digit increase in media investment. Adjusted operating profit margin was down 40 basis points to 18.3 percent.

Meanwhile, General Mills backed its 2024 fiscal year outlook, saying that it expects to drive organic net sales growth through “strong marketing, innovation, in-store support, and net price realization.” The rate of input cost inflation is seen moderating as well, while disruptions in supply chains are predicted to abate.