General Mills Promises Return to Topline Growth

By Dave Fusaro, Editor in Chief

Feb 19, 2019

Returning to "profitable topline sales growth" is the primary focus at General Mills this year. After three down years in a row and a tepid 2018, the company's finances are feeling the urgency to deliver.

That was the message delivered today (Feb. 19) by Chairman and CEO Jeff Harmening and other company officials as they addressed the Consumer Analyst Group of New York meeting.

Big acquisitions probably are on hold for a while, following last year's $8 billion acquisition of Blue Buffalo. But smaller buys are still possible and there certainly will be divestitures – Harmening said he plans to jettison about 5 percent of current sales – as the company reshapes its portfolio.

Topline sales had declined three years in a row 2014-2017 and were up less than a percent (to $15.7 billion) – even with some sales from Blue Buffalo – in the company's fiscal 2018, which ended May 27, 2018.

But 2019 is off to a good start, several officers reported, and organic net sales are expected to be flat to up 1 percent. Including the impact of the Blue Buffalo acquisition, net sales are expected to increase 9-10 percent. Adjusted operating profit is expected to increase 6-9 percent.

Blue Buffalo is a big part of the General Mills story going forward. The purchase puts Big G in the premium/wholesome/natural category of pet food, which is showing the biggest growth in the overall pet food category. General Mills' ownership is allowing the business unit to expand distribution and enter the higher-margin treat and wet food sub-categories.

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