General Mills said Wednesday that it expects inflation to raise its costs and announced plans to raise prices to preserve margins.
The packaged-food company said total cost inflation is expected to amount to about 7 percent of the company’s cost of goods sold expense line.
The company said it is addressing the “inflationary environment” through price increases for most of its portfolio and other cost-saving measures.
General Mills saw adjusted earnings per share drop to 91 cents from $1.10 a year prior. Net organic sales declined six percent from a year ago as household purchases of food for home consumption were down from the early stages of the pandemic lockdowns. In addition, there was an additional week in last year’s equivalent quarter.
The company said it expects comparable sales will be down one to three percent during its 2022 fiscal year versus the previous period.
“The company expects at-home food demand will decline year over year in fiscal 2022 across most of its core markets, though will remain above pre-pandemic levels,” General Mills said. “Away-from-home food demand is expected to continue to recover in fiscal 2022, though not fully to pre-pandemic levels.”