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General Mills Blasts Q1 Earnings Forecast as Food Sales Surge

General Mills said first quarter organic sales rose 10% from last year to $4.4  billion thanks in part to "increased demand for food at home resulting from the pandemic."

General Mills Inc.  (GIS) - Get General Mills, Inc. Report posted stronger-than-expected first quarter earnings Wednesday as home-based consumers lifted sales for the packaged-brand food group. 

General Mills said adjusted earnings for the three months ending in August, the company's fiscal first quarter, were pegged at $1.00 per share, a 28.2% increase from the same period last year and well ahead of the Street consensus forecast of 87 cents per share. Group revenues, General Mills said, rose 10% to $4 billion, again topping analysts' forecast of a $4.2 billion tally.

General Mills declined to provide a 2021 earnings forecast, but said the biggest factor to both its top and bottom lines will be the relative balance between stay-at-home and return-to-work trends in consumer food demand, both of which are closely linked to the global coronavirus pandemic.

The group also boosted its quarterly dividend by 4% to 51 cents per share.

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“We continued to drive exceptional results this quarter, highlighted by broad-based market share gains amid elevated at-home food demand due to the COVID-19 pandemic,” said CEO Jeff Harmening. “The fundamentals of our business are strong. We’re investing in our brands, executing with speed and agility, and maintaining our focus on the health and safety of our employees and our consumers."

"And, importantly, we’re resuming dividend growth sooner than initially planned. I’m more confident than ever that General Mills is poised to emerge from the pandemic a stronger company and in a position to generate consistent, profitable growth and top-tier returns for our shareholders,” he added. 

General Mills shares were marked 0.55% lower in early trading following the earnings release to change hands at $57.73 each, a move that trims their six-month gain to around 26.5%.