General Mills Inc. said Tuesday that profit growth in its fiscal year 2014 will be stronger and that it also plans on returning more cash to stockholders through share repurchases and dividend growth.
As for its current fiscal year ending May 26, the Golden Valley-based packaged foods giant reaffirmed its earnings forecast as top executives gave an upbeat update at the annual conference of the Consumer Analyst Group of New York.
"We are completing a two-year period of significant investment that strengthened our business in our core U.S. market and meaningfully expanded our base in international markets," General Mills CEO Ken Powell told stock analysts who track packaged food and consumer goods firms.
"Our focus now is on integrating the new operations and executing well across the entire company," Powell said at the conference, held in Boca Raton, Fla. "We see stronger growth in our immediate future." The company's stock rose 84 cents, or almost 2 percent, Tuesday, closing at $45.43.
General Mills is coming off two major international acquisitions, Brazilian food maker Yoki Alimentos, which it bought last year for nearly $1 billion, and a controlling stake in Paris-based yogurt giant Yoplait S.A.S for $1.2 billion. The Yoplait deal closed in 2011.
"We would expect a more-normal flow of M&A activity than the last couple of years, which I think everyone knows was a bit unusual for us," Powell said.
Even before the deals, the company's international sales, which make up more than 30 percent of total revenue, have been growing at "high single-digit" rates over the past five years, Chris O'Leary, General Mills executive vice president for international operations, told analysts. "The growth of our base business has been the real story."
In the U.S., General Mills' retail sales growth has been tepid this fiscal year, though it picked up somewhat in the second quarter.
