On Thursday, General Mills
The presentation began with a recap of how the company plans to return value to its shareholders. CEO Steven Sanger reviewed the company's target of low-single-digit revenue growth. Plans also call for earnings to accelerate, with an increased focus on productivity and cost-savings measures. Share buybacks will also continue to contribute to growth in diluted earnings per share. Add a growing dividend, and management expects to deliver low-double-digit growth in shareholder gains.
So far, the management team is holding to its goals. Sales increased 6% for the first half of the year, helped by a large new product launch (including Fruity Cheerios) and new cereals leveraging the Disney
Besides penny-pinching on chocolate chips, the company is also turning to new channels to drive revenues. While you might not find Toaster Strudels at Whole Foods
Still, even with the new channel opportunities and increasing profit margins, General Mills' top-line growth is tepid. General Mills is a mature company in a mature and competitive industry. It's hard to get excited about the company's prospects -- unless, that is, you like a conservative and profitable company run by a management team that continues to return value to its shareholders through increasing dividends and share buybacks.
It's a Foolish thought.
For related Foolishness:
- General Mills Grinds Higher
- Three Cheerios for General Mills?
- General Mills: A Bargain in the Grocery Aisle?
Fool contributor Matthew Crews welcomes your feedback -- really! He has bought General Mills for a family member but does not own it directly or have a financial position in any of the companies mentioned. The Motley Fool has a disclosure policy.