Shares of General Mills Inc. GIS, -0.52% surrendered early gains Wednesday, after the consumer-foods company posted slightly better-than-expected fiscal first-quarter earnings, but said the consumer is still wary in an uncertain economic climate.
On a call with analysts, Harmening said consumers are showing behavior more typical of a recessionary environment and moving to smaller sizes, cheaper restaurants and eating more at home. Sales grew to $4.905 billion, above the FactSet consensus of $4.883 billion, as a six percentage-point increase in prices helped offset a 2 percentage-point decline in volume.
One area General Mills said it is still confident about is cereal, at a time when surveys are suggesting that Americans no longer eat breakfast at the pace they did before the pandemic. “So it’s still a highly consumed item in the morning,” he said. “We’ve been doing very well in cereal. As you know, we’ve grown more than 20% over the last five years. We’ve gained share, I think, five years in a row. We have the two biggest brands in the category in Cheerios and Cinnamon Toast Crunch.”Industry insiders interviewed by John Oh, analyst at global research firm Third Bridge, said the earnings showed a still-fragile consumer.
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