Return-to-office mandates are hurting sales of pet treats for companies such as General Mills Inc.
(Bloomberg) — Return-to-office mandates are hurting sales of pet treats for companies such as General Mills Inc.
With “pet parents increasingly away from home,” cat-and-dog treats posted a double-digit sales decline during the quarter ending in late August, General Mills said Wednesday as it reported earnings. The same trend also crimped sales of wet food, the company said.
“We don’t really expect a huge rebound in our pet business for the rest of this year,” Chief Executive Officer Jeffrey Harmening said on a call with investors and analysts. General Mills bought Tyson Foods Inc.’s pet treats business for $1.2 billion in 2021, three years after an $8 billion deal for Blue Buffalo Pet Products Inc.
The weakening results add to the gloom around the pet business, which has traditionally been seen as a refuge for investors in times of economic uncertainty. Petco Health & Wellness Co. cut its profit forecast last month amid weaker discretionary spending and rising demand for “value-based options” in food. Oppenheimer & Co. downgraded Chewy Inc. this week, citing “recent signs of weakness in the historically resilient pet-food category.”
Petco and Chewy are on track to close at record lows Wednesday, extending this year’s sharp declines in both stocks.
Shares of General Mills, which reported higher operating profit in its human-food businesses, were little changed in New York on Wednesday. The Minneapolis-based company said it remained bullish on the long-term outlook for its pet business.
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