(Reuters) -General Mills Inc raised its annual organic sales and profit forecasts on Tuesday, betting on price hikes and strong demand for its snack bars and breakfast cereals as well as a recovery in its high-margin pet food business.
Shares rose about 4% as Chief Executive Jeffrey Harmening said at the Consumer Analyst Group of New York conference that despite consumers feeling the pinch, there has not been any push-back on the price hikes in the last few quarters.
Global packaged food manufacturers like General Mills (NYSE:GIS) and Procter & Gamble (NYSE:PG) Co have raised product prices in recent months due to spiraling costs of labor, raw materials, supply chain and transportation.
General Mills had in December warned of another round of price increases at the start of 2023, especially for its pet care products.
The pet business has seen a rebound in the third quarter, Harmening said at CAGNY, after sales in the previous quarter took a hit from some key retailers cutting back on inventory.
The Cheerios-maker now expects annual organic net sales growth of about 10%, compared to prior forecast of a 8% to 9% rise.
General Mills expects full-year adjusted profit per share to rise between 7% and 8% on a constant-currency basis, compared to previous expectation of an increase of 4% to 6%.