General Mills beats profit estimates on strong pet food demand

FILE PHOTO: General Mills breakfast cereal is shown for sale in Carlsbad, California, U.S., June 27, 2017. REUTERS/ Mike Blake

(Reuters) - General Mills Inc's GIS.N quarterly profit beat Wall Street expectations on Wednesday as the Cheerios maker benefited from higher demand for its pet foods, sending its shares up 3%.

The maker of Cocoa Puffs and Lucky Charms acquired Blue Buffalo Pet Products for $8 billion last year in a push to capitalize on growing demand for pet food.

Sales at its pet unit rose 16% in the quarter, helped by price increases and the recent roll out of Blue Buffalo products in Walmart WMT.N stores.

Adjusted gross margins rose 80 basis points to 35.3%.

Net earnings attributable to the company rose 69% to $580.8 million in the second quarter ended Nov. 24, as it recorded impairment and restructuring costs of $209.4 million in the year-ago quarter.

Excluding items, the company earned 95 cents per share, beating analysts’ expectations of 88 cents, according to IBES data from Refinitiv.

Net sales rose to $4.42 billion from $4.41 billion, missing the average analyst estimate of $4.43 billion, according to IBES data from Refinitiv.

Reporting by Praveen Paramasivam in Bengaluru; Editing by Amy Caren Daniel