Pet food, baking product sales drive General Mills profit beat

(Reuters) -General Mills Inc beat second-quarter profit estimates on Thursday, boosted by sales of its pet foods and baking products, and said it expects the demand trend to continue at the same levels it has seen over the past few months.

“Third-quarter demand trends are expected to be generally consistent with recent months, due to ongoing virus concerns in many markets around the world,” the company said, adding that this would lead it to post another strong quarter of sales and profit growth.

The Minneapolis-based company expects third-quarter organic sales to be up roughly 7%, similar to growth it witnessed in the second quarter. A spike in at-home cooking boosted sales of many products including Betty Crocker cake mixes and Old El Paso sauces in North America in the latest reported quarter.

People also spent more on their pets, driving sales in General Mills’ pet segment up 18% in the quarter, in part due to increased distribution and media investments around brands such as BLUE.

Asian and Latin American markets were also robust, the company said, with organic net sales growing 10% on the back of strong demand of its Wanchai Ferry dumplings in China and Häagen-Dazs retail ice cream. In Latin America, Yoki meals and Kitano seasonings were top-performing brands.

Overall, net sales climbed nearly 7% to $4.72 billion in the quarter ended Nov. 29, beating market estimate of $4.65 billion, according to Refinitiv IBES.

Excluding items, General Mills earned $1.06 per share, beating analysts’ expectation of 97 cents.

The company also said it expects full-year fiscal 2021 adjusted operating margins to be in line or better than year-ago levels.

The company’s shares, up 10% this year, rose nearly 1% in premarket trading.

Reporting by Praveen Paramasivam and Siddharth Cavale in Bengaluru; Editing by Maju Samuel