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General Mills (GIS) Poised on High Demand, Accelerate Strategy
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General Mills, Inc. (GIS - Free Report) is benefiting from rising demand stemming from increased at-home consumption amid the coronavirus outbreak. Certainly, the company is well positioned on the back of its focus on key priorities, which include competing efficiently, boosting efficacy to fuel investments and reducing leverage. Also, the company’s effective innovations and robust cost-saving efforts are yielding. Apart from this, the recently-unveiled Accelerate strategy looks impressive.
Accelerate Strategy Holds Promise
General Mills unveiled its “Accelerate” strategy to drive growth. The strategy is outlined to aid the company in making choices of how to win and where to play with an aim to boost profitability. The strategy will also help the company enhance shareholders’ returns in the long run. Under how to win, General Mills is focused on four pillars that are designed to provide competitive advantage. These include brand building, undertaking innovations, unleashing scale and maintaining business strength. Notably, General Mills expects to build its brands through media investments and a reinvented marketing playbook.
Further, General Mills expects to keep undertaking innovations by providing new solutions to real consumer problems; utilizing increased speed to market on core platform innovation; as well as looking for fresh growth areas via experimentation and in-market learning. Moreover, investing in data and analytics and enhancing core capabilities like Holistic Margin Management, Strategic Revenue Management and online operations is anticipated to help the company in unleashing scale.
Where to play principle is outlined to enhance General Mills’ capabilities to generate profitability through geographic as well as product prioritization along with portfolio restructuring. This includes prioritizing investment across eight key markets like the United States, Canada, France and Australia among others. General Mills also intends to invest in five Global Platforms namely Cereal, Pet Food, Ice Cream, Snack Bars and Mexican Food. Also, driving growth in Local Gem brands as well as reshaping portfolio through well thought-out buyouts and divestitures form a part of the Where to play principle.
The strategy is likely to help General Mills in delivering mid- to high-single-digit adjusted earnings per share growth on a constant-currency (cc) basis and boosting shareholders’ returns. This is expected to be achieved through organic net sales growth of 2-3% and margin expansion – including mid-single-digit growth in adjusted operating profit at cc. Also, converting at least 95% of adjusted net earnings into free cash flow and returning 80-90% of free cash flow to shareholders via dividends and share buybacks is expected to contribute to the upside.
Wrapping Up
Lower demand for away-from-home food amid the coronavirus outbreak is hurting the company’s Convenience Stores & Foodservice. Reduced consumer traffic and other pandemic-induced restrictions have been adversely impacting the segment’s major away-from-home channels like restaurants, schools, lodging and convenience stores in the fiscal second quarter. Apart from these, General Mills is battling challenges stemming from escalated costs.
All said, we believe that the recently introduced Accelerate strategy along with the other aforementioned upsides is likely to help this Zacks Rank #3 (Hold) company stay afloat amid such hurdles. Markedly, General Mills’ shares have increased 6.7% in a year compared with the industry’s growth of 5%.
Darling Ingredients (DAR - Free Report) , a Zacks Rank #2 stock, has a trailing four-quarter earnings surprise of 26.3%, on average.
Medifast, Inc. (MED - Free Report) , currently carrying a Zacks Rank #2, has a trailing four-quarter earnings surprise of 20.2%, on average.
Zacks Names “Single Best Pick to Double”
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research SherazMian hand-picks one to have the most explosive upside of all.
You know this company from its past glory days, but few would expect that it’s poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.
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General Mills (GIS) Poised on High Demand, Accelerate Strategy
General Mills, Inc. (GIS - Free Report) is benefiting from rising demand stemming from increased at-home consumption amid the coronavirus outbreak. Certainly, the company is well positioned on the back of its focus on key priorities, which include competing efficiently, boosting efficacy to fuel investments and reducing leverage. Also, the company’s effective innovations and robust cost-saving efforts are yielding. Apart from this, the recently-unveiled Accelerate strategy looks impressive.
Accelerate Strategy Holds Promise
General Mills unveiled its “Accelerate” strategy to drive growth. The strategy is outlined to aid the company in making choices of how to win and where to play with an aim to boost profitability. The strategy will also help the company enhance shareholders’ returns in the long run. Under how to win, General Mills is focused on four pillars that are designed to provide competitive advantage. These include brand building, undertaking innovations, unleashing scale and maintaining business strength. Notably, General Mills expects to build its brands through media investments and a reinvented marketing playbook.
Further, General Mills expects to keep undertaking innovations by providing new solutions to real consumer problems; utilizing increased speed to market on core platform innovation; as well as looking for fresh growth areas via experimentation and in-market learning. Moreover, investing in data and analytics and enhancing core capabilities like Holistic Margin Management, Strategic Revenue Management and online operations is anticipated to help the company in unleashing scale.
Where to play principle is outlined to enhance General Mills’ capabilities to generate profitability through geographic as well as product prioritization along with portfolio restructuring. This includes prioritizing investment across eight key markets like the United States, Canada, France and Australia among others. General Mills also intends to invest in five Global Platforms namely Cereal, Pet Food, Ice Cream, Snack Bars and Mexican Food. Also, driving growth in Local Gem brands as well as reshaping portfolio through well thought-out buyouts and divestitures form a part of the Where to play principle.
The strategy is likely to help General Mills in delivering mid- to high-single-digit adjusted earnings per share growth on a constant-currency (cc) basis and boosting shareholders’ returns. This is expected to be achieved through organic net sales growth of 2-3% and margin expansion – including mid-single-digit growth in adjusted operating profit at cc. Also, converting at least 95% of adjusted net earnings into free cash flow and returning 80-90% of free cash flow to shareholders via dividends and share buybacks is expected to contribute to the upside.
Wrapping Up
Lower demand for away-from-home food amid the coronavirus outbreak is hurting the company’s Convenience Stores & Foodservice. Reduced consumer traffic and other pandemic-induced restrictions have been adversely impacting the segment’s major away-from-home channels like restaurants, schools, lodging and convenience stores in the fiscal second quarter. Apart from these, General Mills is battling challenges stemming from escalated costs.
All said, we believe that the recently introduced Accelerate strategy along with the other aforementioned upsides is likely to help this Zacks Rank #3 (Hold) company stay afloat amid such hurdles. Markedly, General Mills’ shares have increased 6.7% in a year compared with the industry’s growth of 5%.
3 Key Food Picks
The Hain Celestial (HAIN - Free Report) , currently carrying a Zacks Rank #2 (Buy), has a trailing four-quarter earnings surprise of 26.7%, on average. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Darling Ingredients (DAR - Free Report) , a Zacks Rank #2 stock, has a trailing four-quarter earnings surprise of 26.3%, on average.
Medifast, Inc. (MED - Free Report) , currently carrying a Zacks Rank #2, has a trailing four-quarter earnings surprise of 20.2%, on average.
Zacks Names “Single Best Pick to Double”
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research SherazMian hand-picks one to have the most explosive upside of all.
You know this company from its past glory days, but few would expect that it’s poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.
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