Updated 3-General Mills benefits from steady demand for daily necessities, quarterly results exceed expectations

Newly Added Stock Information and Analyst Comments

Sanskriti Shekhar

Reuters, September 23 - General Mills GIS.N reported quarterly sales and profit that exceeded market expectations on Wednesday and reaffirmed its full-year outlook. The results were aided by price increases and resilient demand for at-home foods, which helped offset rising input costs to some extent.

Amid persistently high inflation, consumers are increasingly opting to dine at home, supporting demand for everyday and packaged foods.

According to data compiled by London Stock Exchange Group (LSEG), the “Cheerios” maker posted a 3% decline in sales to $4.39 billion in the quarter ended August 30, but still beat analysts’ average expectation of $4.35 billion. Organic sales were flat for the quarter.

The company stated that despite high input costs squeezing margins, it remains on track to achieve at least $750 million in cost savings this year through efficiency initiatives.

Impacted by higher input costs, General Mills’ adjusted gross margin fell by 90 basis points to 33.3% of net sales. The company expects to face similar pressure for most of this fiscal year.

The manufacturer of the “Snack Pack” brand, like many packaged food and beverage companies, has been raising prices to offset increased raw material costs caused by U.S. import tariffs, particularly on metals such as aluminum and steel used in packaging.

Lale Akoner, global market strategist at eToro, said: “General Mills is showing signs of a turning point, but it is not out of the woods yet.”

“For investors, the key question is whether this is the start of a genuine recovery or just a better-than-expected quarter.”

After General Mills reaffirmed its fiscal 2027 outlook, its shares fell 1% in early trading.

General Mills’ North America Retail segment is its largest division, contributing more than half of total revenue. Sales in this segment fell 7% year-on-year, compared with a 13% decline in the same period last year.

International sales grew 4%, driven by growth in distribution markets as well as in India and China.

Adjusted earnings per share declined 13% to 75 cents but were above analysts’ expectation of 72 cents.

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