50% Off! Beat the market in 2025 with InvestingProCLAIM SALE

General Mills lifts annual forecast on upbeat demand for at-home cooking

Published 09/21/2022, 07:19 AM
Updated 09/21/2022, 10:02 AM
© Reuters. FILE PHOTO: Packages of Cheerios, a brand owned by General Mills, are seen in a store in Manhattan, New York, U.S., November 12, 2021. REUTERS/Andrew Kelly
GIS
-
KHC
-
K
-

By Mehr Bedi and Granth Vanaik

(Reuters) -General Mills Inc raised its full-year forecast after beating quarterly profit estimates on Wednesday, as higher product prices did not quell demand for the Cheerios maker's snacks and cereals.

Packaged food makers have been steadily raising prices on everything from cereals to beef jerky as they look to insulate their margins from increased costs tied to labor, ingredients and transportation without drawing consumer ire.

With inflation nearing forty-year highs, the consumer preference for cooking more at home, which developed during the pandemic, has been hard to shake off as shoppers try to stretch their dollars amid soaring energy and food prices.

"Significant inflation and reduced consumer spending power has led to an increase in at-home eating and other value-seeking behaviors," Chief Executive Officer Jeff Harmening said, attributing the demand for home cooking for the lower-than-expected impact of pricing on sales volume in the quarter.

Third Bridge analyst Shoggi Ezeizat noted General Mills (NYSE:GIS) looks resilient against inflation pressures, adding "the group's wide range of products and spectrum of price points should provide sufficient options for its customers to trade down but not out of the General Mills range."

The Lucky Charms owner said it expects consumers to become more price sensitive over the next three quarters.

Shares of the Minnesota-based packaged food maker rose 3.7% as the positive results echo sentiments from some of its peers, including Kellogg (NYSE:K), J.M. Smucker and Kraft Heinz (NASDAQ:KHC) Co, which have also raised annual forecasts in recent months.

© Reuters. FILE PHOTO: Packages of Cheerios, a brand owned by General Mills, are seen in a store in Manhattan, New York, U.S., November 12, 2021. REUTERS/Andrew Kelly

The company now expects organic net sales to rise between 6% and 7% in fiscal 2023. It had earlier forecast sales to grow 4% to 5%.

The Betty Crocker cake mix maker also expects fiscal 2023 adjusted profit per share to rise 2% to 5% on constant currency basis, compared with prior forecast range of flat to 3%.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.