Cheerios maker General Mills posted a smaller-than-expected drop in quarterly sales on Wednesday, backed by higher prices for its breakfast cereals, snack bars and pet food products that helped cushion a blow from slowing demand.
The Cheerios cereal maker’s net sales dropped about 1% to $5.1 billion in the third quarter, compared with analysts’ expectations of sales to drop about 3.1% to $4.97 billion, according to LSEG data.
Revenue dropped slightly from the same period last year as volumes continued to be pressured. While inflation in the cost of raw materials has moderated, consumers remain sensitive to prices and continue to seek good deals, which has hit the company’s sales volume, Chief Executive Jeff Harmening has said previously.
However, there were signs of life in this latest quarter.
“General Mills’ strategic focus on brand building, innovation, and in-store execution contributed to improved volume and market share trends in the third quarter,” Harmening said Wednesday.
To improve sales, the company has been investing heavily in building its brands. Media investment, or spending on advertising, increased 41% from fiscal 2018 to fiscal 2023. In the first half of fiscal 2024, it was up by a percentage in the high single digits from the same period a year earlier, the company said.
