Cheerios, Häagen-Dazs Maker to Raise Prices, Sheding $2.5 Billion in Market Value
Wed Mar 21 2018
Lucy Harlow (3228 articles)

Cheerios, Häagen-Dazs Maker to Raise Prices, Sheding $2.5 Billion in Market Value

Consumers might just start saying “no” to Honey Nut Cheerios.

That comes as General Mills, which also produces Yoplait yogurt, Gushers, and Häagen-Dazs ice cream, said it would raise the prices of some packaged goods Wednesday, due to rising shipping and commodities costs.

“In terms of pricing, we are going to use a number of leverage in some markets and some businesses; it’s going to be list price increase,” said Donald Mulligan, the firm’s Chief Financial Officer, also pointing to greater inflation in the U.S. economy.

That news, alongside a lowered full-year forecast, cut the 161-year-old food giant’s market value by $ 2.5 billion, to about $ 25.8 billion. Shares feel about 9% in trading—its single worst slide in almost a decade.

That came as General Mills said during its fiscal third quarter earnings that it expected earnings of $ 3.08 to $ 3.11 per share for the year—a significant difference the previously forecasted $ 3.17.

Higher shipping prices are ringing throughout the industry. During the firm’s earnings call, Vice President Jeff Siemon noted that freight costs now represent about 20% of shipments, against a historical 5%.

“In fact North American freight spot prices were near 20-year highs in February,” he said.

Lucy Harlow

Lucy Harlow

Lucy Harlow is a senior Correspondent who has been reporting about Commodities, Currencies, Bonds etc across the globe for last 10 years. She reports from New York and tracks daily movement of various indices across the Globe