General Mills on Tuesday raised its sales and profit outlook for 2018, citing the new tax law and data from a market researcher that showed new strength for its products in U.S. stores.
The company showed its first jump in quarterly revenue in more than two years during the September to November period. And surveys done by Nielsen, a market research firm, from November through January showed a 1-percent gain in U.S. stores, executives told analysts at a conference in Boca Raton, Fla., on Tuesday.
That was better than Nielsen showed for the September to November period.
For the full fiscal year, which will end in May, General Mills now expects flat sales, at the high end of its previous guidance. It also said its earnings per share will be up 3 percent to 4 percent, greater than the previous forecast of a 1-percent to 2-percent increase.
The company cited the impact of the new federal tax law for the improved outlook on profits. General Mills' effective tax rate will be 27 percent for the fiscal year, 2 percentage points less than previously expected.
However, General Mills executives also said ingredient and shipping costs were higher than expected in recent weeks and they lowered their outlook for operating profit, which they now expect to be in a range of flat to down 1 percent. Previously, they forecast operating profit to rise as much as 1 percent.
General Mills shares fell nearly 1 percent on Tuesday.