Updated version 2 - General Mills' first-quarter results exceeded expectations, thanks to the resilience of consumer demand for daily essentials.

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Reuters, September 23 - General Mills GIS.N on Wednesday reported first-quarter sales and profits that exceeded expectations and reaffirmed its full-year performance forecast. This was driven by price increases and the resilience of at-home food demand, factors that partially offset rising input costs.

Faced with persistently high inflation, consumers are increasingly opting to dine at home, which is supporting the demand for everyday foods and packaged food products.

According to data compiled by London Stock Exchange Group (LSEG), the maker of “Cheerios” saw its sales decline by 3% to $4.39 billion in the quarter ended August 30, while analysts' average forecast was $4.35 billion. However, organic sales for the quarter were flat.

The company said that despite high input costs depressing margins, it still expects to achieve at least $750 million in cost savings this year through cost-cutting measures.

Due to rising input costs, General Mills' adjusted gross margin decreased by 90 basis points to 33.3% of net revenue.

The company which produces Pillsbury products, like many other packaged food and beverage companies, has been raising prices to offset rising raw material costs caused by U.S. import tariffs, especially metals such as aluminum and steel used in packaging.

General Mills’ North American retail business is its largest segment, accounting for more than half of the company’s total revenue. This segment’s sales declined year-on-year by 7%, while the decline in the same period last year was 13%.

“While the majority of the focus categories in our North American Retail (NAR) business saw improved market share trends in the first quarter, some businesses have not yet returned to absolute share growth, and we remain committed to improving this trend,” Chief Financial Officer Dana McNabb said in prepared remarks.

Driven by growth in distribution markets as well as in India and China, international sales increased by 4%.

Adjusted earnings per share fell by 13% to $0.75, but exceeded analysts' expectations of $0.72.

General Mills also reaffirmed its outlook for fiscal 2027, forecasting organic net sales to be between a decrease of 1.5% and an increase of 0.5%, with adjusted earnings per share between $3.00 and $3.20.

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