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4 Reasons Why General Mills' (GIS) Stock is Worth a Shot Now

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General Mills, Inc. (GIS - Free Report) appears to be a lucrative bet, courtesy of its robust growth strategies and promising prospects. These upsides have helped this Zacks Rank #2 (Buy) stock rally 44% year to date, comfortably outdoing the industry’s growth of 14.9%.

Let’s take an insight into the factors likely to continue driving this global manufacturer and marketer of branded consumer foods.

Global Strategies a Major Driver

General Mills is on track with growth plans such as the Consumer First strategy along with key global growth strategies to drive sales growth consistently. To this end, the company focuses on innovation, efficient customer marketing and in-store execution to sharpen its competitive edge. Additionally, it is on track to improve the U.S. Yogurt business, expand presence in emerging nations, stabilize distribution channels and enhance price mix. The company’s next main strategy focuses on driving growth across four differential global platforms — Haagen-Dazs ice cream, snack bars, Old El Paso Mexican food, and General Mills’ natural and organic food brands. Finally, the company is working toward reshaping its portfolio via prudent buyouts and divestitures.

Cost-Saving Efforts

General Mills is pursuing several initiatives to generate cost savings and support its key growth strategies. The company expects to achieve cost savings through increased efficiency, reduced complexity via SKU optimization, supply-chain optimization and continued expansion of zero-based budgeting across the business. Also, the company is on track with its Holistic Margin Management (HMM) program, which is expected to continue generating higher savings. Savings from this initiative aided operating margin expansion during the fourth quarter of fiscal 2019.

Blue Buffalo Buyout Aids

General Mills acquired Blue Buffalo Pet Products in fiscal 2018, which is driving revenues. During the fourth quarter of fiscal 2019, the company’s sales improved 7% year over year on gains from Blue Buffalo. The buyout also boosted its adjusted operating profit in the quarter. Management envisions continued growth from this business. Markedly, the company anticipates sales from Blue Buffalo and segment operating profit to grow at a significant pace in fiscal 2020.

Outlook Instills Confidence

General Mills holds an impressive earnings beat record, surpassing estimates in the trailing five quarters. The company is on track with growth plans to boost productivity and efficiency. That said, management expects organic sales to improve 1-2% in fiscal 2020. Moreover, net sales for the fiscal are expected to rise 1-2 percentage points on the back of gains from divestitures, favorable currency translations and contributions from the 53rd week. Also, the company envisions adjusted earnings per share (at cc) to rise 3-5% year over year.

Clearly, General Mills is set to keep its spectacular show on and continue being in investors’ good books.

3 More Food Stocks to Bet On

McCormick (MKC - Free Report) , with a Zacks Rank #2, has a long-term EPS growth rate of 8%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

MEDIFAST (MED - Free Report) , with a Zacks Rank #2, has an impressive earnings surprise history.

J & J Snack Foods (JJSF - Free Report) , with a Zacks Rank #2, delivered positive earnings surprise in the trailing three quarters.

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