General Mills, Inc (NYSE:GIS) stock rose 2.85% (As on Mar 24, 11:18:35 AM UTC-4, Source: Google Finance) after the company raised its full-year core sales and profit forecasts, encouraged by higher prices and strong demand for the Cheerios maker’s cereals, snack bars and pet food. Organic net sales increased 4%, reflecting 7 points of positive organic net price realization and mix, partially offset by a 4-point headwind from lower organic pound volume. Net earnings rose from $595.7 million to $660.3 million in the comparative quarters. Third-quarter net sales for General Mills’ North America retail segment increased 1% from $2.78 billion to $2.81 billion, driven by favorable net price realization and mix, partially offset by lower pound volume. Third-quarter net sales for the North America foodservice segment increased 22% from $357.9 million to $437 million, driven by favorable net price realization and mix, including market index pricing on bakery flour and positive contributions from volume growth. Third-quarter net sales for the international segment were down 23% from $939.8 million to $721 million, including a 20-point headwind from the divestitures of the European yogurt and dough businesses and 2 points of unfavorable foreign currency exchange.

Meanwhile, the margins, remained pressured across the food industry as pandemic-induced supply chain shortfalls have led to soaring freight and labor expenses, adding on to spiraling costs of packaging material and ingredients. General Mills had cautioned in February that supply issues in categories including refrigerated dough, pizza and hot snacks in North America would affect shipments in the third quarter

GIS in the third quarter of FY 22 has reported the adjusted earnings per share of 84 cents, beating the analysts’ estimates for the adjusted earnings per share of 78 cents. The company had reported flat  adjusted revenue growth to $4.54 billion in the third quarter of FY 22, missing the analysts’ estimates for revenue of $4.64 billion. Operating profit of $815 million was down 1 percent, driven primarily by lower gross profit dollars and less favorable investment activity, partially offset by a gain on divestitures. Operating profit margin of 18.0 percent was down 30 basis points.

The company expects organic net sales to rise by about 5% in fiscal 2022, compared with its prior estimate of a 4%-5% increase. It forecast adjusted per-share profit between flat and an increase of 2%, compared with its earlier range of a 2% decline to a 1% rise. Constant-currency adjusted operating profit is now expected to range between down 2 percent and flat. Free cash flow conversion is expected to be at least 95 percent of adjusted after-tax earnings.