General Mills, Inc. benefits. MIS of knowing prices after deducting cost inflation. The company is rebalancing its portfolio by prioritizing core markets, international platforms and local brands and promoting them through strategic acquisitions and diversification. In addition, SIG's Accelerated strategy accelerates its growth.
These gains boosted the company's revenue in the first quarter of fiscal 2024. General Mills reported net sales of $4,904.7 million. Organic net sales increased 4% due to consistent perception of organic net pricing and mix, driven in part by lower organic book volume.
Accelerate the guide to maximum speed
The accelerated strategy (launched in February 2021) will help General Mills choose how to win and where to play to increase profitability and shareholder returns over the long term. How to Win at General Mills focuses on four pillars designed to provide competitive advantage. These include building a brand, creating innovation, defining size and maintaining business strength.
The policy defines the company's geographic and product priorities, as well as the areas that must be played to increase the company's profitability. These include prioritizing investments, investing in five international platforms, developing local jewelery brands, and restructuring the portfolio.
For fiscal year 2024, General Mills has committed to an accelerated strategy focused on three priorities: competing more effectively through brand development and innovation, supply chain optimization through advanced margin management (“HMM”), cost savings and reductions, and efficient distribution through capital. . Inflow, shareholder rewards and portfolio return commitment.
Management is committed to productivity efforts and expects HMM cost savings of 4% of cost of goods sold in fiscal 2024. Speaking of portfolio restructuring, General Mills made two acquisitions and upgrades in fiscal 2023, improving its portfolio by more than 20% on the year Finance 2018.
Image source: Zacks Investment Research
Value test
GIS has struggled with input price inflation for some time, a trend that will continue into the first quarter of 2024. Although offset by positive pricing perception and positive mix, adjusted gross margin was impacted by improvement in input costs in the first quarter. General Mills also saw steady growth in its SG&A spending, which included double-digit increases in media investments.
During the first-quarter earnings conference call, management said the primary factors impacting FY2024 results are customer economic sentiment, moderate inflation and increasing stability in supply channel conditions. We note that a more cautious consumer landscape continues to impact General Mills in fiscal 2024. For fiscal 2024, management expects input cost inflation to represent 5% of total cost of goods sold relative to labor inflation. Labor inflation affects supply, production and supply costs. Additionally, continued investments in branding can result in increased SG&A expenses.
inspiration
Agile strategies and a focus on cost-benefit can work well for GIS. In fiscal 2024, organic net sales are expected to grow 3-4%, driven by strong marketing, innovation and in-store support. Additionally, the gains generated from net worth can help businesses through strategic revenue management initiatives. CC's adjusted operating profit growth is expected to range from 4 to 6 percent. CC's adjusted EPS growth is expected to range from 4 to 6 percent.
This Zacks Rank #3 (Hold) company is down 4.2% over the past three months, compared to the industry's decline of 3.5%.
3 interesting options
Lam Weston LW, which offers frozen potato products, has a Zacks Rank #1 (Strong Buy). LW's average earnings surprise for the fourth quarter was 46.2 percent. You can see the complete list of today's Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Sheep Weston's current fiscal year sales and earnings show growth of 28.3% and 24.8%, respectively, from last year's numbers.
Kraft Heinz KHC, a food and beverage company, currently has a Zacks Rank of #2(AT). Kingdom Holding Company delivered an average fourth-quarter earnings surprise of 9.9%.
The Zacks Consensus forecasts that Kraft Heinz's sales and revenues for the current fiscal year will increase 1.1% and 6.5%, respectively, from last year.
Vital Farms Inc. offers VITL Pasture-raised foods. It currently has a Zacks Rank of #2. VITL posts an average earnings surprise of +145% over four quarters.
The Zacks Consensus Estimate for the company's top sales for the current fiscal year has increased 29.4% from last year's report.
Looking for the latest recommendations from Zacks Investment Research? Today you can download the top 7 stocks for the next 30 days. Click here to get this free report.
General Mills (SIG). Free stock analysis report
Kraft Heinz Company (KHC). Free stock analysis report
Lamb Weston (LW). Free stock analysis report
Vital Farms Inc. (VITL). Free stock analysis report
Click here to read this article on Zacks.com.
Zacks Investment Research
