Betty Crocker and Häagen-Dazs ice cream maker General Mills (GIS) - Get Report on Wednesday reported better-than-expected fiscal fourth-quarter sales and earnings amid a surge in at-home food demand driven by the Covid-19 pandemic.
The maker of Gold Medal flour, Cheerios and Cocoa Puffs cereal, and Pillsbury refrigerated dough posted earnings of $625.7 million, or $1.10 an adjusted share, vs. $570.2 million, or 94 cents a share, in the comparable year-earlier quarter.
Analysts polled by FactSet had been expecting per-share earnings of $1.06. Sales rose 21% to $5.02 billion from $4.16 billion, slightly beating analysts’ forecasts of $5 billion in sales.
The Minneapolis-based company said stronger demand for the likes of baking goods, cereals, snacks and pastries “… accelerated net sales growth in the North America Retail segment,” though at-home demand was less pronounced in Europe and Australia.
That was partially offset by a drop-off in demand in its pet segment, which started off the quarter on a strong note but partially unwound by the end of the quarter as demand for pet food and supplies tapered off, the company said.
General Mills in May raised its fourth-quarter guidance amid what it saw as an "unprecedented increase" in demand for food at home as consumers stocked up on supplies in response to the coronavirus outbreak and quarantine.
However, how the U.S. and global economies recover from the pandemic and how consumers’ stay-at-home vs. eating and dining-out habits shift “remains highly uncertain,” General Mills said.
“As a result, the company is not currently providing an outlook for fiscal 2021 growth in organic net sales, adjusted operating profit, and adjusted diluted earnings per share.”
Shares of General Mills were down 1.69% at $60.54 in trading Wednesday.