July 1 – General Mills Inc reported strong quarterly results on Wednesday and said it expected further boost to sales of its cereals and snacks for the rest of the year as people remain hunkered down in their homes due to coronavirus-related curbs.
America’s largest supermarket chains have benefited as consumers rushed to fill their pantries and refrigerators during the outbreak.
“Consumer concerns about COVID-19 virus transmission and the recession (will) drive elevated demand for food at home, relative to pre-pandemic levels,” General Mills said.
While several chains, including Kroger and Canada’s Loblaw Cos, have indicated future demand could take a hit as people begin to emerge from home confinement and businesses reopen, all of them booked benefits from panic buying in the quarter.
General Mills also said demand in 2021 may be impacted by changes in the buying habits of people even as North America retail business, its biggest unit, recorded a 36% rise in quarterly sales.
The company, however, did not provide a full-year outlook and said the elevated demand compared to pre-pandemic levels might force it to incur higher expenses.
Barclays analyst Andrew Lazar said General Mills not providing the outlook even for the current quarter “could be a modest disappointment to investors, particularly in light of the strength in organic sales.”
Shares of the company, which gained 15% this year, fell 1% in morning trading.
Overall net sales climbed nearly 21% to $5.02 billion, beating market estimates of $4.97 billion, also driven by a 37% increase in pet food sales.
Excluding items, the company earned $1.1 per share, above analysts’ expectation of $1.06 per share, according to IBES data from Refinitiv. (Reporting by Praveen Paramasivam in Bengaluru; Editing by Ramakrishnan M. and Sweta Singh)