General Mills Inc raised its full-year organic sales and profit outlook on Tuesday following price hikes on its breakfast cereals and snack bars, as well as steady demand for its products.
Global packaged food manufacturers have been raising prices of their products in recent months to insulate their profit margins from spiralling costs of labour, raw materials, supply chain and transportation.
However, they have seen relatively little pushback from inflation-hit consumers, who are otherwise cautious on their discretionary spending.
General Mills' shares, up 29.3% this year, fell about 2% to $85.60 before the bell as the company also flagged higher raw material costs for the full year due to soaring inflation.
General Mills' upbeat results follow that of peers Campbell Soup, Kellogg, and Kraft Heinz, who have also echoed in recent months that several rounds of price hikes have not yet dented demand significantly.
The Cheerios cereal maker now expects organic net sales to rise 8% to 9% in fiscal 2023, compared with its previous forecast of a 6% to 7% increase.
The company also forecast full-year adjusted profit per share to rise between 4% and 6% on a constant-currency basis, compared with its prior outlook of an increase of 2% to 5%.
General Mills' net sales rose to $5.22 billion in the second quarter, compared with analysts' estimates of $5.19 billion, according to Refinitiv data.
On an adjusted basis, the company earned $1.10 per share, beating estimates of $1.07.