By Neil J Kanatt and Koyena Das
Dec 17 (Reuters) – General Mills beat estimates for second-quarter sales and profit on Wednesday, as budget-conscious consumers ate at home than dined out, boosting demand for the Pillsbury dough maker’s pantry staples and breakfast cereals.
Shares of the Cheerios maker, which reaffirmed its annual forecasts for a second time, were up about 1% in early trading.
While U.S. consumer sentiment improved in early December, more shoppers still preferred home-made meals over restaurants amid high prices and labor market uncertainties.
General Mills experienced a “volatile operating environment” for the quarter, CEO Jeff Harmening said, while noting “improved momentum” in the first half of the year.
“With lower and middle-income consumers continuing to feel significant economic pressure, we’ve seen them make a greater proportion of their food purchases on promotion rather than at everyday prices.”
SNAP benefits, which provide food assistance to those with lower income, lapsed temporarily for the first time during the federal shutdown, squeezing household budgets.
Net sales for the quarter ended November 23 fell 7% to $4.86 billion, surpassing analysts’ estimates of $4.78 billion, according to data compiled by LSEG.
It reported an adjusted profit of $1.10 per share, beating expectations of $1.03 per share.
The company maintained its annual forecast of a 10% to 15% fall in profit, and organic net sales between a 1% rise and a 1% fall.
General Mills reiterating its annual forecast showed positive signs despite it being under pressure in an environment where “pricing had become difficult to take and volume recovery was slower than expected,” RBC Capital Markets analyst Nik Modi said.
Peer Campbell’s Co also beat expectations for first-quarter profit last week while maintaining its annual forecasts.
General Mills, in June, had said it would remove synthetic dyes from its full U.S. retail portfolio by the end of fiscal 2027, as more consumers opt for healthier options and the Trump administration pushes the “Make America Healthy Again” movement.
(Reporting by Koyena Das and Neil J Kanatt in Bengaluru; Editing by Leroy Leo)
