General Mills Posts Higher Sales as Costs Escalate Further
General Mills Inc.
GIS 5.60%
posted higher sales in its fiscal first-quarter as more consumers eat at home in response to higher prices, including from the food company, as costs escalate further.
The maker of Cheerios cereal and Betty Crocker cake mix Wednesday said it now sees costs rising as much as 15% for its current fiscal year, higher than its forecast from June, due to increases for raw materials, labor, freight and fuel.
General Mills executives say rising costs are pushing more households to find ways to save money, including opting to eat at home instead of going out to restaurants. “Significant inflation and reduced consumer spending power has led to an increase in at-home eating and other value-seeking behaviors,” Chief Executive
Jeff Harmening
said ahead of the company’s earnings call.
The Labor Department recently reported that food prices in the U.S. rose 13.5% in August compared with a year before, the fastest rate since March 1979.
General Mills expects more people eating at home to lead to improved sales volumes even as it raises prices to offset the higher costs. It raised its sales forecast for the year as well, expecting organic sales, which strip out effects of currency adjustments, acquisitions and divestitures, to rise 6% to 7%, up from 4% to 5%.
In its latest quarter, General Mills said sales rose 4% to $4.72 billion, in line with Wall Street estimates. Organic sales, which exclude the impact of selling its Hamburger Helper and Suddenly Salad brands in May, rose 10%.
The sales gain was largely driven by higher prices, which added 15 percentage points to the top line, while the amount of food sold fell from a year ago.
General Mills has taken other measures to improve its profitability, including changing packaging and sizes to charge more per ounce. The company Wednesday also raised its profit outlook. It now expects adjusted operating profit to be flat on year or to rise up to 3%, while adjusted earnings per share rise between 2% to 5%.
Overall for the period ended Aug. 28, General Mills posted a profit of $820 million, or $1.35 a share, up from $627 million, or $1.02 share, in the same period a year earlier.
Stripping out the impact from divestitures and other one-time items, General Mills said adjusted earnings came in at $1.11 a share. Analysts polled by FactSet expected adjusted earnings of $1.00 per share.
Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
General Mills Inc.
GIS 5.60%
posted higher sales in its fiscal first-quarter as more consumers eat at home in response to higher prices, including from the food company, as costs escalate further.
The maker of Cheerios cereal and Betty Crocker cake mix Wednesday said it now sees costs rising as much as 15% for its current fiscal year, higher than its forecast from June, due to increases for raw materials, labor, freight and fuel.
General Mills executives say rising costs are pushing more households to find ways to save money, including opting to eat at home instead of going out to restaurants. “Significant inflation and reduced consumer spending power has led to an increase in at-home eating and other value-seeking behaviors,” Chief Executive
Jeff Harmening
said ahead of the company’s earnings call.
The Labor Department recently reported that food prices in the U.S. rose 13.5% in August compared with a year before, the fastest rate since March 1979.
General Mills expects more people eating at home to lead to improved sales volumes even as it raises prices to offset the higher costs. It raised its sales forecast for the year as well, expecting organic sales, which strip out effects of currency adjustments, acquisitions and divestitures, to rise 6% to 7%, up from 4% to 5%.
In its latest quarter, General Mills said sales rose 4% to $4.72 billion, in line with Wall Street estimates. Organic sales, which exclude the impact of selling its Hamburger Helper and Suddenly Salad brands in May, rose 10%.
The sales gain was largely driven by higher prices, which added 15 percentage points to the top line, while the amount of food sold fell from a year ago.
General Mills has taken other measures to improve its profitability, including changing packaging and sizes to charge more per ounce. The company Wednesday also raised its profit outlook. It now expects adjusted operating profit to be flat on year or to rise up to 3%, while adjusted earnings per share rise between 2% to 5%.
Overall for the period ended Aug. 28, General Mills posted a profit of $820 million, or $1.35 a share, up from $627 million, or $1.02 share, in the same period a year earlier.
Stripping out the impact from divestitures and other one-time items, General Mills said adjusted earnings came in at $1.11 a share. Analysts polled by FactSet expected adjusted earnings of $1.00 per share.
Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
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