U.S. consumer goods group General Mills raised its dividend as price hikes helped lift its quarterly sales and profits amid soaring inflation and continued supply chain disruptions.
The Minneapolis-based company, whose portfolio includes Häagen-Dazs ice cream and Yoplait yogurt, said it would increase its quarterly dividend by 6% to $0.54 per share from $0.51 previously.
General Mills reported net sales rose 8% year-on-year in the fourth quarter to $4.9 billion as price increases boosted revenue. That beat analysts’ expectations of $4.8 billion in revenue.
Full-year sales rose 5% to around $19 billion, beating analysts’ expectations of $18.9 billion.
“While significant inflation and supply chain disruptions have put pressure on our margins, we have moved quickly to meet these challenges and keep our brands on the shelves for our customers and consumers,” said Jeff Harmening. , general director.
The company warned of pressure on its earnings due to consumer economic health, rising input costs and supply chain constraints. General Mills expects double-digit inflation on its cost of goods sold in fiscal 2023, but plans to tackle it with further price increases on its products.
Although the company’s gross margin contracted to 33.7% in fiscal 2022 from 35.6% a year earlier, it increased 120 basis points to 36.2% in fourth trimester. Diluted earnings per share rose 67 cents from a year earlier to $1.35 per share in the fourth quarter, beating analysts’ expectations for $1.03.
U.S. consumer goods groups have managed to pass higher costs onto consumers through much of the pandemic in a bid to protect their margins, but analysts have questioned how much longer U.S. consumers will be willing to bear. such prices.
General Mills expects organic net sales to grow 4-5% in fiscal 2023 and adjusted diluted earnings per share to be flat or up 3% from a year ago.