(Reuters) - Cheerios maker General Mills Inc on Wednesday reported quarterly sales and profits that beat estimates as a surge in baking and cooking by stuck-at-home students and families drove a jump in sales in most of its product lines.
The company said it has seen a 91% increase in 18- to 24-year-olds visiting its Pillsbury and Betty Crocker websites since the start of the crisis, with 7 million monthly visitors seeking out recipes made from those brands’ dough and cake mixes.
That helped sales of its baking products and meals jump 31% in the quarter, allowing the Yoplait yogurt maker to raise its quarterly dividend by 4% and its shares rose as much as 3.5% in early trading in response.
With more people continuing to work from home and an increasing number of students taking online classes, demand for breakfast items like Cheerios cereal and Yoplait also jumped.
The company held or grew share in 8 out of its 10 top retail categories in the three months ended August, and said it continued to expect at-home demand to remain elevated in the current quarter compared to pre-pandemic levels.
It expects high single-digit retail sales growth in North America.
“Not only are we gaining share, we’re attracting new consumers in this environment,” Chief Executive Officer Jeffrey Harmening said, adding the new customers were heavily skewed to younger and Hispanic households than existing users.
Net earnings rose nearly 23% to $639 million in the first quarter, but could be pressured over the next three months as the company increasingly uses third-party manufacturers to meet retail demand and spends more on hygiene and sanitation measures.
Since the start of the pandemic, General Mills has employed around 30 new external manufacturers to boost its capacity by about 25% in North America, Harmening said.
Reporting by Siddharth Cavale and Uday Sampath in Bengaluru; Editing by Shinjini Ganguli
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