MINNEAPOLIS — A new Kit-Kat cereal and a campaign promoting Pillsbury dough are among numerous grain-based foods products at the heart of General Mills, Inc. growth initiatives in fiscal 2024. Plans for the efforts were shared by company executives in connection with the release of fourth-quarter financial results.
Guiding the company’s plans is a view that the market landscape is changing. For the new fiscal year (that began June 1), General Mills sees “a new environment emerging across multiple vectors,” said Jeffrey L. Harmening, chairman, president and chief executive officer.
In prepared remarks for investment analysts June 29, Mr. Harmening said consumers have shown remarkable resilience through the pandemic and inflation surge of 2021-23. While inflation is moderating, consumer unease is growing, he said.
“We know from spending time with consumers that they are increasingly cautious about their financial future,” Mr. Harmening said. “This caution could have an impact on their at-home versus away-from-home food choices, the channels they shop and the brands they choose, making it even more important for us to continue to invest in our remarkable products, innovation and marketing that keep our brands relevant for consumers.”
As previously reported, net income at General Mills in the year ended May 28 was $2.59 billion, equal to $4.36 per share on the common stock, down 4% from $2.71 billion, or $4.46 per share, in fiscal 2022. Net sales were $20.09 billion, up 6% from $18.99 billion the year before. Adjusted earnings per share rose 10% in constant currency.
Operating profit of the North America Retail segment of the company in fiscal 2023 was $3.2 billion, up 18% from $2.7 billion in fiscal 2022. Sales were $12.7 billion, up 9%. The division’s volume was down 4% in the year with 16 points of growth connected with price/mix, offset by negatives of 2 points from acquisitions/divestitures and 1 point from foreign exchange.
“Net sales growth was broad based, including increases of 13% in US Snacks, 10% in US Meals & Baking Solutions, and 7% in US Morning Foods,” the company said. “Constant-currency net sales were up 8% in Canada. Segment operating profit of $3.2 billion was up 18% as reported and in constant currency, driven primarily by favorable net price realization and mix, partially offset by higher input costs, lower volume, and higher SG&A expenses, including a double-digit increase in media investment.”
General Mills Cereal Partners Worldwide net sales were up 8% in the fourth quarter and 4% for the year in constant currency. Price/mix was the driver with pound volume contracting.
For fiscal 2024, General Mills is predicting net sales growth of 3% to 4%, adjusting operating profit growth of 4% to 6% and adjusted earnings per share growth of 4% to 6%, from a base of $4.30 in fiscal 2023.
Expanding on steps the company will take to keep its products relevant and to reach its financial objectives, Mr. Harmening said the company will conduct “strong campaigns” in support of its strongest brands.
“For example, our Pillsbury brands, fill, roll, bake campaign continues to inspire easy everyday dinner solutions for consumers,” he said.
Grain-based foods dominated the new product introductions Mr. Harmening highlighted in his remarks.
“We’re adding Lucky Charms and Cocoa Puffs to our highly successful mini cereal platform, and we’re rolling out a new Kit-Kat cereal,” he said. “We’re launching a new savory line of Nature Valley Crunchy bars with nuts as the first ingredient and only 2 grams of sugar. We’re bringing luxury to the yogurt aisle with the debut of Häagen-Dazs cultured creme, a new live indulgent fresh dairy snack in six varieties made with the same high-quality ingredients that we use in the beloved super-premium ice cream. We’re leveraging our superior cookie dough technology to provide consumers the most convenient way to bake banana bread at home with our new refrigerated batter. And our new Stacked Queso Crunch Kit brings this great-tasting family favorite to taco night in three easy steps.”
For the company’s Foodservice division, the company is introducing a reduced-sugar version of Cocoa Puffs that meets K-12 school nutrition requirements.
With an easing of supply chain difficulties, Mr. Harmening said General Mills will be more aggressive highlighting its products within stores.
“We look to restore our levels of quality merchandising through compelling end-aisle and freestanding displays on highly productive categories like cereal and snack bars as well as seasonal offerings in soup and desserts,” he said.