TAMPA, Fla. (WFLA) — Food supply giant General Mills is predicting inflation to push their prices up next year, and to higher levels than originally expected. The brand, known for Cheerios, Pillsbury and Nature Valley among others, is facing some hurdles thanks to inflation.
In a Dec. 21 quarterly earnings report, General Mills said they were predicting an 8% to 9% cost inflation. As a result, shoppers can expect to see higher prices in stores. Previously, General Mills had expected costs to go up between 7% and 8%.
“For the full year, the company now anticipates cost of goods sold headwinds will be approximately $500 million higher than what was assumed in its initial fiscal 2022 outlook,” General Mills said in its quarterly report. “Inclusive of higher input cost inflation, which is now expected to be 8 to 9%, as well as elevated costs related to supply chain disruptions.”
Overall, company profits were down slightly in the past quarter. The report said their net income was $597.2 million, down from $688.4 million the year before. That’s a drop of $0.97 per share, according to their report.
“In the face of an unprecedented combination of input cost inflation and supply chain disruptions, we’re moving quickly to keep our trusted brands on store shelves for consumers while driving net price realization to protect our bottom line. As a result, we now expect to meet or exceed each of our financial targets for the year,” said General Mills Chairman and Chief Executive Officer Jeff Harmening. “We also advanced our portfolio reshaping efforts in the quarter, and we’re more confident than ever that General Mills will emerge from the pandemic a stronger company better geared to generate profitable growth in line with our Accelerate strategy.”
In the report, General Mills said their higher costs in the most recent period had grown past their strategies for pricing and increased production.
The company’s operating profit decreased 6%, “driven by lower adjusted gross profit dollars, partially offset by lower adjusted selling, general and administrative expenses.” These changes are thanks to inflationary pressures, according to the report.