General Mills raises annual forecast banking on price hikes, steady demand

[February 21, 2023]  (Reuters) - General Mills Inc on Tuesday raised its annual organic sales and profit forecast, betting on price hikes and strong demand for its popular snack bars and breakfast cereals amid a cost-of-living crisis. 

Packages of Cheerios, a brand owned by General Mills, are seen in a store in Manhattan, New York, U.S., November 12, 2021. REUTERS/Andrew Kelly

The Cheerios-maker now expects annual organic net sales growth of about 10%, compared to prior forecast of a 8% to 9% rise, it said in a statement ahead of an industry conference.

Global packaged food manufacturers like General Mills and Procter & Gamble Co have raised prices of their products in recent months to guard profit margins from spiraling costs of labor, raw materials, supply chain and transportation.

General Mills also expects full-year adjusted profit per share to rise between 7% and 8% on a constant-currency basis, compared to previous expectation of an increase of 4% to 6%.

The company, which has seen relatively little push-back from inflation-hit consumers, had in December warned of another round of price increases coming through at the beginning of 2023, especially for its pet care business.

Shares of the Minnesota-based packaged food manufacturer rose marginally to 1.3% in premarket trading.

(Reporting by Ananya Mariam Rajesh in Bengaluru; Editing by Nivedita Bhattacharjee)

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