General Mills uses home cooking to combat inflation.

• The manufacturer of Cheerios saw its shares rise 5.5 percent on Wednesday
• Demand for its breakfast cereals, snack bars, and pet food remained stable.
• General Mills anticipates an increase in input costs of around 14% in fiscal 2023.

General Mills attributed its quarterly earnings, which exceeded expectations, to higher pricing and warned it was prepared to bear rising costs as Americans cut back on eating out more to save money due to inflation.

In addition to increasing its quarterly dividend, the manufacturer of Cheerios saw its shares rise 5.5 percent on Wednesday as demand for its breakfast cereals, snack bars, and pet food remained stable despite price increases.

The first thing people typically do when they are concerned about the state of the economy is eat more at home, according to Chief Executive Officer Jeff Harmening.

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Due to the lower cost of home cooking during previous economic downturns, “we are witnessing the same kind of behaviour now,” the economist claimed.

The manufacturer of Pillsbury dough, Betty Crocker cake mixes, and Old El Paso sauces also predicted adjusted per-share earnings growth for fiscal 2023 to range between flat and a 3% increase.

Despite the general investor perception that the price window for the packaged food business has all but effectively closed, according to Barclays analyst Andrew Lazar, the forecast implies a level of confidence in its ability to manage inflation.

In order to safeguard their profit margins from rising freight and raw material costs, American producers of packaged foods have raised the price of everything from condensed soup to chocolates.

General Mills anticipates an increase in input costs of around 14% in fiscal 2023 compared to the reported year.

Refinitiv IBES reported that net sales climbed 8% to $4.89 billion in the fourth quarter, exceeding predictions of $4.81 billion.

The adjusted earnings per share were $1.12, exceeding the $1.01 consensus.

Reporting for Reuters from Bengaluru by Praveen Paramasivam. Editing for Reuters by Devika Syamnath.

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