MINNEAPOLIS — At General Mills, Inc. three enterprise priorities remain firmly in play: competing effectively, improving supply chain efficiency and maintaining a disciplined approach to capital allocation.
“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,” said Jeffrey Harmening, chairman and chief executive officer of General Mills, Inc. “... We will continue adapting to the changing environment, and we remain on track to deliver our fiscal 2024 financial objectives.”
Those financial objectives were reaffirmed by General Mills in advance of its presentation at the Barclays Global Consumer Staples Conference on Sept. 6 in Boston. The company said fiscal 2024 adjusted operating profit is expected to increase 4% to 6% while organic net sales are expected to increase 3% to 4% for the year.
To achieve its targets, though, General Mills will need to march forward on its key priorities, beginning with continuing to compete effectively. In North America Retail, General Mills anticipates an improvement in volume trends over the remainder of fiscal 2024, driven by “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.”
Elsewhere in the company’s portfolio, North America Foodservice has been competing effectively by leveraging its advantaged sales, supply chain and innovation capabilities, General Mills said. Meanwhile, a more cautious approach by pet owners regarding their economic outlook has the company expecting more challenging volume trends in US pet food over the coming months.
General Mills’ second priority involves improving supply chain efficiency.
“The supply chain environment has steadily improved in recent months, 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 said. “With a more stable supply chain allowing for more resources to be redirected toward productivity, the company remains on track to step up its Holistic Margin Management cost savings to 4% of cost of goods sold in fiscal 2024, compared to 3% generated in fiscal 2023.”
A final focal point for General Mills is maintaining a disciplined approach to capital allocation. To that end, the company said it is making a capital investment into the business at approximately 4% of net sales in fiscal 2024. A second capital priority involves dividend growth, a priority General Mills addressed with the recent announcement of a 9% increase in its quarterly dividend rate effective with the August 2023 payment.
“With debt leverage comfortably below its 3x target, the company has ample capacity to further reshape its portfolio with growth- and value-accretive acquisitions,” General Mills said.