General Mills beats quarterly results estimates on resilient demand for pantry staples

Sept 23 — General Mills beat first-quarter sales and profit estimates on Wednesday and reaffirmed its ​annual forecast, as price increases and resilient demand for at-home food helped partially offset higher input costs.

Consumers facing persistently high inflation have ‌been increasingly opting to eat at home, supporting demand for pantry staples and packaged foods.

The Cheerios maker's ⁠sales fell 3% to $4.39 billion for ​the quarter ended August 30, but ⁠beat the average of analysts' estimates of $4.35 billion, according to data compiled ‌by LSEG. Organic sales ‌were flat for the quarter.

The company said it remains on track ⁠to generate at least $750 million in savings ⁠this year through its cost-cutting actions as high input costs weigh on the company's margins.

General Mills' adjusted gross margin fell 90 basis points to 33.3% of net sales, hurt by higher input costs. It expects similar pressure through most of the fiscal year.

The Pillsbury maker, like several packaged ‌food and beverage companies, has been raising prices ​to make up for a rise in raw-material costs due to US import tariffs, especially of metals like aluminum and steel that are used for packaging.

"General Mills is showing signs of turning a corner, but it is not there yet," said Lale Akoner, global market strategist at eToro.

"For investors, the question is whether this is the start of a genuine ​recovery or simply a better-than-feared quarter."

Shares of General Mills were down 1% in early ‌trading after the ‌company reaffirmed ⁠its fiscal 2027 outlook.

General Mills' North America Retail segment, its largest business that generates more than half of its total revenue, reported a 7% decline in sales, compared with a 13% drop a year ago.

International sales rose 4%, driven ‌by growth in distributor markets ​as well as India and China.

Adjusted profit ‌fell 13% to 75 ⁠cents per share, ​but topped analysts' estimates of 72 cents.

(Reporting by Sanskriti Shekhar in Bengaluru; Editing by ​Leroy Leo)

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