Inflation is proving stickier than a Pillsbury cinnamon roll for General Mills.
Still, the Golden Valley-based foodmaker has again increased its short-term financial outlook and beat analysts' expectations for its most recent quarter, even as profits dropped 16%.
"The consumer seems to be reasonably robust, and at the same time they're eating at home more than they were pre-pandemic," CEO Jeff Harmening told analysts Thursday morning. "We plan to sustain this momentum by investing further in brand building, innovation and capabilities that will drive future growth."
Here are four takeaways from Thursday's earnings report from the maker of Cheerios, Blue Buffalo and Yoplait.
'Mid-single-digit inflation' for fiscal 2024
General Mills expects input costs will end up rising 15% in the fiscal year that ends in May. Inflation over the next year will be much improved and should be in the mid-single-digit range, company leaders said.
But Harmening cautioned a "normal" inflationary environment is at least 12 months away.
Higher wages and higher costs from suppliers are expected to drive continued cost increases. That could keep sales volumes down and potentially lead to more price increases to keep revenue rising and profit margins intact.