General Mills Inc raised its annual sales forecast after posting better-than-expected quarterly sales, benefiting from price increases and resilient demand for its snack bars, breakfast cereals and pet-food products.
Multinational packaged food companies have been bumping up their product prices throughout the past year to shield their profit margins from spiralling supply chain, labour, raw materials and freight costs.
The steady price hikes have benefited producers of staple food and seen little resistance from customers as they prefer to make their meals at home than spending more on eating outside amid growing fears of a recession in the United States.
General Mills chairman and chief executive officer Jeff Harmening said, “We built on our positive momentum and delivered strong results in the third quarter, including broad-based growth across each of our segments. Our team continues to manage well through ongoing supply chain disruptions and volatility in the operating environment.”
The company now expects organic net sales, which excludes the impact of foreign currency exchange rate fluctuations, acquisitions and divestitures, to rise 10% to 11% in fiscal 2023.
It had earlier forecast growth of about 10%.
The Cheerios cereal maker's net sales in the third quarter rose to about $5.13 billion from $4.54 billion a year earlier. Analysts had expected $4.97 billion, according to Refinitiv data.
Harmening added, “Our brands are winning with consumers, and we plan to sustain this momentum by continuing to invest in brand building, innovation, and capabilities that will drive future growth. With strong year-to-date performance and good visibility to the fourth quarter, we are once again raising our fiscal 2023 outlook for our key financial measures.”
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.