General Mills (NYSE:GIS) is seeing positive business impacts from the COVID-19 outbreak. On Wednesday the snack food giant announced earnings results for the fiscal third quarter, which only ran through late February.
However, the company has noticed a significant demand spike in the subsequent weeks -- enough to give executives confidence to affirm their sales outlook while boosting General Mills' earnings targets.
Sales were flat in the third quarter, as management had predicted, as robust growth in the pet food segment was offset by sluggish sales for cereals, snack bars, and yogurt in the core U.S. retailing segment. General Mills noted a temporary slump in its China market as that country grappled with travel restrictions tied to the coronavirus outbreak.
Management's comments on the start to the fiscal fourth quarter were positive. Although the situation remains fluid, General Mills noted elevated demand from its retailing partners including supermarket chains. They credited "consumers' increased demand for food at home during this unique time" as the main factor lifting volumes.
The extra demand has the company feeling confident that it will reach its fiscal 2020 goal of modest sales gains while earnings will improve at an even faster rate.
That bright outlook might be threatened by worsening supply or demand trends. Yet to date, demand is rising and the disruption to General Mills' supply chain has been minimal.
"We'll remain agile to adapt to changing demand patterns around the world as circumstances with COVID-19 continue to develop," CEO Jeff Harmening said in a press release.