Sept 23 (Reuters) - General Mills beat first-quarter sales and profit estimates on Wednesday and reaffirmed its annual forecast, as price increases and resilient demand for at-home food helped partially offset higher input costs.
Consumers facing persistently high inflation have been increasingly opting to eat at home, supporting demand of pantry staples and packaged foods.
The Cheerios maker's sales fell 3% to $4.39 billion for the quarter ended August 30, compared with the average of analysts' estimate
of $4.35 billion, according to data compiled by LSEG. However, organic sales were flat for the quarter.
The company said it remains on track to generate at least $750 million in savings this year through its cost-cutting actions as high input costs weigh on the company's margins.
General Mills' adjusted gross margin fell 90 basis points to 33.3% of net sales, hurt by higher input costs.
The Pillsbury maker, like several packaged food and beverage companies, has been raising prices to make up for a rise in raw-material costs due to US import tariffs, especially of metals like aluminum and steel that are used for packaging.
General Mills' North America Retail segment, its largest business that generates more than half of its total revenue, reported a 7% decline in sales, compared with a 13% drop a year-ago.
"While most of NAR's priority businesses delivered improved market share trends in Q1, some are not yet back to absolute share growth, and we're focused on improving this trajectory," CFO Dana McNabb said in prepared remarks.
International sales rose 4%, driven by growth in distributor markets as well as India and China.
Adjusted profit fell 13% to 75 cents per share, but topped analysts' estimates of 72 cents.
General Mills also reaffirmed its fiscal 2027 outlook, forecasting organic net sales to range from down 1.5% to up 0.5% and adjusted earnings of $3.00 to $3.20 per share.
(Reporting by Sanskriti Shekhar in Bengaluru; Editing by Leroy Leo)
