Regarding three enterprise priorities, General Mills leads
Three enterprise priorities are still very much in place at General Mills, Inc.: enhancing supply chain effectiveness, competing successfully, and keeping a strict capital allocation policy.
The chairman and CEO of General Mills, Inc., Jeffrey Harmening, stated, “We entered fiscal 2024 with a sharp focus on the evolving external environment, headlined by moderating inflation, stabilizing supply chains, and a resilient but increasingly cautious consumer.” “We will persist in adjusting to the evolving surroundings, and we are on course to meet our financial goals for the fiscal year 2024.”
Prior to its presentation at the Barclays Global Consumer Staples Conference on September 6 in Boston, General Mills confirmed those financial goals. According to the corporation, adjusted operating profit for the fiscal year 2024 is predicted to rise between 4% and 6%, while organic net sales are predicted to rise between 3% and 4%.
However, in order to meet its goals, General Mills must advance on its top priorities, starting with maintaining its competitive edge. As a result of “a reduced headwind from pricing, greater impact from distribution, innovation, brand building, and quality merchandising, and a benefit from added capacity on certain constrained platforms,” General Mills expects volume trends in North American retail to improve over the course of the next fiscal year.
According to General Mills, North America Foodservice has been successfully competing elsewhere in the company’s portfolio by utilizing its superior supply chain, sales, and innovation skills. The company anticipates more difficult volume trends in US pet food over the next few months due to pet owners’ more circumspect attitude toward their financial future.
Increasing the effectiveness of the supply chain is General Mills’ second top priority.
In recent months, the business reported that “the supply chain environment has steadily improved, with supply disruptions returning to pre-pandemic levels and General Mills’ customer service levels reaching the low- to mid-90s in the US.” “The company is on track to increase its Holistic Margin Management cost savings to 4% of cost of goods sold in fiscal 2024, compared to 3% generated in fiscal 2023, with a more stable supply chain allowing for more resources to be redirected toward productivity.”
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Keeping a disciplined capital allocation process is General Mills’ ultimate focus. In order to do this, the company said that in fiscal 2024 it will invest capital into the company at a rate of about 4% of net sales. Dividend growth is a second capital imperative, which General Mills recently addressed by announcing a 9% increase in its quarterly dividend rate, which will take effect with the August 2023 payment.
General Mills stated, “The company has ample capacity to further reshape its portfolio with growth- and value-accretive acquisitions, with debt leverage comfortably below its 3x target.”