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Boxes of General Mills brand cereals are displayed at Scotty’s Market on September 20, 2017 in San Rafael, California.
General Mills raised its full-year organic sales growth forecast and reported second-quarter sales that topped Wall Street estimates, helped by strong demand for its cereal and snack brands such as Lucky Charms and Nature Valley.
Shares of the Minneapolis-based company rose 2 percent to $58.90 before the bell on Wednesday.
Revenue from its North America retail unit, its key revenue contributor, rose 1 percent in the second quarter, driven by strong demand for cereal, including its new Chocolate Peanut Butter Cheerios.
Snack products such as Larabar and Nature Valley granola bars continued to see strong demand in the region, while sales of yogurt fell for another quarter.
Net income attributable to the company fell 10.6 percent to $430.5 million, or 74 cents per share, in the quarter ended Nov. 26, due to increased advertising and marketing costs.
The company said it now expects fiscal 2018 organic sales growth to be between flat and down 1 percent, better than its prior forecast of a decline of 1 percent to 2 percent.
Excluding one-time items, the company earned 82 cents per share, in line with analysts’ estimates. Revenue rose 2 percent to $4.20 billion.
Analysts on average had expected revenue of $4.08 billion, according to Thomson Reuters I/B/E/S.