General Mills Inc raised its full-year core sales and profit forecast, encouraged by higher prices and strong demand for the Cheerios maker's cereals, snack bars and pet food.
The pandemic-driven uptick in grocery demand has held strong, boosting sales at General Mills, as people stick to cooking more at home at a time when restaurants have bumped up menu prices to offset inflation.
General Mills chairman and chief executive officer Jeff Harmening, said, “Our solid execution in a highly volatile environment enabled us to close the third quarter with improved momentum. Demand for our brands remains robust, and our team has shown great agility to overcome disruptions throughout the supply chain and deliver for our customers and consumers.
“We expect to drive strong growth in the fourth quarter, fuelled by accelerating net price realisation. With confidence in our plans and positive momentum on our business, we’re raising our guidance for fiscal 2022.”
The sustained demand, coupled with price hikes across the board, has helped packaged food peers including Kraft Heinz, Kellogg and Conagra Brands top profit expectations in recent months.
The company now expects organic net sales to rise by about 5% in fiscal 2022. It had earlier forecast annual organic sales to increase 4% to 5%.
The company forecast adjusted per-share profit to range between flat and an increase of 2%, compared with its earlier range of a 2% decline to a 1% rise.
The company's net sales rose to $4.54 billion (€4.14 billion) in the third quarter ended 27 February, from $4.52 billion (€4.12 billion) a year earlier.
Net sales in its North American retail unit increased by 1% during the quarter, to $2.81 billion (€2.6 billion), while the foodservice segment reported 22% growth, to $437 million (€398.13 million).
The pet division reported 30% growth in net sales, to $568 million (€517.5 million), driven by favourable net price realisation and mix and strong volume growth.
The company's international division saw net sales down 23%, to $721 million (€656.9 million), including a 20-point headwind from the divestitures of the European yoghurt and dough businesses and 2 points of unfavourable foreign currency exchange.