General Mills Forecasts Dour Profit As Price Hikes Slow Demand

By Reuters
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General Mills Forecasts Dour Profit As Price Hikes Slow Demand

General Mills has forecast full-year profit that came in largely below analysts' estimates as the Cheerios cereal maker battles with slow demand for its ready-to-eat cereals, snacks and meal kits due to higher prices.

Shares of the company fell 4% in premarket trading after General Mills reported a 6% dip in sales volumes in the fourth quarter.

Price hikes to offset input cost inflation has aided top-line growth at US packaged food makers. However, in recent quarters volumes have dipped signalling that inflation-hit customers were pushing back against price increases.

General Mills forecast fiscal 2024 organic net sales to rise 3% to 4%, while it reported growth of 5% in fiscal 2023.

It expects adjusted per-share profit growth for fiscal 2024 to range between 4% and 6%. Analysts polled by Refinitiv were expecting a 5.9% rise to $4.49 per share.



General Mills' saw net sales growth of 3% during the fourth quarter of the financial year, to $5.0 billion, while organic net sales increased 5%.

It was boosted by positive organic net price realisation and mix and partially offset by lower organic pound volume.

Operating profit declined 19% year-on-year, to $818 million, reflecting higher selling, general, and administrative (SG&A) expenses, higher restructuring charges, and lower gross profit dollars.

For the full financial year, net sales increased by 6%, to $20.1 billion, including a 4-point headwind from net divestiture and acquisition activity and 1 point of unfavorable foreign currency exchange.


Operating profit amounted to $3.4 billion, down 1%, primarily due to higher SG&A expenses and higher restructuring charges, partially offset by gains on divestitures and higher gross profit dollars.

Read More: General Mills Raises Annual Forecast As Q3 Sales Exceed Expectations

News by Reuters, additional reporting by ESM – your source for the latest A-Brands news. Click subscribe to sign up to ESM: European Supermarket Magazine.

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