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

By Sanskriti Shekhar

Sept 23 (Reuters) - 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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