General Mills Inc raised its full-year sales and profit forecast, spurred by higher prices and strong demand for maker Cheerios cereal, snack bars and pet food.
The surge in demand for groceries due to the pandemic has remained strong, boosting General Mills sales as people stick to cooking more at home at a time when restaurants raised menu prices to compensate for inflation.
General Mills Chairman and CEO Jeff Harmening said, “Our strong execution in a highly volatile environment allowed us to close the third quarter with improved momentum. Demand for our brands remains robust and our team has shown great agility in overcoming disruptions throughout the supply chain and delivering to our customers and consumers.
“We expect to deliver strong growth in the fourth quarter, fueled by accelerating net price realization. With confidence in our plans and positive business momentum, we are raising our guidance for fiscal 2022.”
Sustained demand, coupled with price increases across the board, has helped packaged food peers including Kraft Heinz, Kellogg and Conagra Brands hit earnings expectations in recent months.
The company now expects its organic net sales to increase by approximately 5% in fiscal 2022. It had previously forecast its annual organic sales to increase by 4% to 5%.
The company expects adjusted earnings per share to be between flat and 2% higher, compared to its previous range of a 2% decline to a 1% increase.
Of the society report sales reached 4.54 billion dollars (4.14 billion euros) in the third quarter ended February 27, against 4.52 billion dollars (4.12 billion euros) a year earlier.
Read more: General Mills raises annual sales forecast on home dining demand
Net sales of its North American retail unit increased 1% in the quarter to $2.81 billion (€2.6 billion), while the restaurant segment recorded a growth of 22%, to 437 million dollars (398.13 million euros).
Companion animal division reported net sales growth of 30% to $568 million (€517.5 million) driven by favorable net realization and price mix and strong volume growth .
The company’s international division saw net sales decline 23% to $721 million (€656.9 million), including a 20-point headwind from the divestments of the European yoghurt and dough and 2 points of unfavorable exchange rates.
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