General Mills Inc
) recently maintained its previously-provided outlook for fiscal
2014 at the Morgan Stanley Global Consumer Conference.
In fiscal 2014, General Mills expects stronger earnings growth
and increased cash returns to shareholders. Growth in fiscal 2014
is expected to be in line with its long-term targets.
Earnings per share are likely to grow at a high single-digit
rate in the range of $2.87 to $2.90. Earnings growth in fiscal
2014 is expected to be driven by strong innovation, increased
brand support, modest cost inflation, increased contribution from
the Yoki and Yoplait acquisitions and aggressive cost
The company continues to expect net sales to grow at a low
single-digit rate and exceed $18 billion in fiscal 2014 on the
back of product innovation and contribution from new businesses.
The U.S. Retail business is expected to benefit from new product
launches and increased innovation, while the international
business will gain largely from the newly-acquired
Adjusted gross margin is projected to improve modestly from
the 2013 levels. Segment operating profit is expected to grow in
mid single-digits. The company expects margins to expand in
fiscal 2014 on the back of cost savings and productivity
initiatives. Operating margin is expected to increase in each of
the three business segments - U.S. Retail, Bakeries and
Foodservice and International.
Commodity cost inflation is expected to be 3% in fiscal 2014,
lower than an average of 4%-5% in recent years. Inflation is
expected to be higher in the second quarter of fiscal 2014 than
in the first. The second-quarter results are expected to be
announced on Dec 18, 2013. Management also stated that the
food/beverage sales have slowed a bit across key developed
markets in the second quarter.
Moreover, the company plans to increase dividends and share
buybacks in the year, thus offering greater shareholders' value.
The increased buybacks are expected to lower the average number
of shares outstanding by 2% in fiscal 2014. The company increased
its dividend by 15% effective from the quarterly dividend paid on
Other Stocks to Consider
General Mills carries a Zacks Rank #4 (Sell). Other food
companies which are currently doing well include
Omega Protein Corp
The J. M. Smucker Co.
Pinnacle Foods Inc.
). While Omega Protein carries a Zacks Rank #1 (Strong Buy),
Pinnacle and Smucker hold a Zacks Rank #2 (Buy).
GENL MILLS (GIS): Free Stock Analysis Report
OMEGA PROTEIN (OME): Free Stock Analysis
PINNACLE FOODS (PF): Free Stock Analysis
SMUCKER JM (SJM): Free Stock Analysis Report
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