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Friday,
January , 2009
(Cont'd from
above)...
Ken, welcome back to
Mad Money...
Ken:
Hey Jim, great
to be here. How are
you? Happy New Year.
Jim:
Not bad. Happy
New Year to you. So
you decide that you
want to try to get
the message out, why
is this better than
just a traditional
advertising, or is
it just compliment?
Ken:
Well, it’s such
a comprehensive
program, Jim, and as
you know January is
kind of weight loss
month for everybody.
I don’t know about
you, but I ate a lot
of Christmas cakes
over the last month.
Everybody is trying
to shape up. And so
we have come up with
this great way to
help people do that.
It is called the
pound for pound
challenge, as you
said. And what you
do is you pledge to
lose weight on our
website
www.PFPchallenge.com,
or you can mail in
package lids and
seals on specially
marked General Mills
boxes. And for every
pound you lose,
General Mills is
going to donate .10
cents to Feeding
America, and Feeding
America, is
America’s largest
food bank. And this
whole thing is going
to be highlighted
tonight on the
season premiere of
NBC’s “The Biggest
Loser”. They have
been terrific
partners with
General Mills and
with Feeding America
on this whole idea.
We think, if this
works out, we
motivate people we
help people to lose
weight. We give
people another
reason to do it.
Through this
donation. And this
program could help
Feeding America
deliver 5 million
pounds of food to
their food shelves.
And, you know, with
the economy the way
it is, the demand at
food shells is up.
And so we just think
this is just a great
idea.
Jim:
I hear you. I
donated to the
community food bank,
which is big in
Jersey with my
ActionAlertsPlus.com, my
charitable trust.
Alright, Ken, the
last time we spoke
some commodity
hedges… looks like
they didn’t work…
are they run thru…
are we now able to
take advantage of
General Mills… I say
we because I own it
for my charitable
trust.. Are we able
to take advantage of
the declines in some
of the grains, some
of the oil prices…
are we able to
generate margin
expansion coming
forth?
Ken:
Well, hey Jim,
we just reported 2
2, as you know, and
it was another very,
very good quarter
for us. We had 8%
sales growth. We had
segment operating
profit growth of 9%.
We grew our margins
again. Even in this
tough commodity
environment, our
brand building
spending was up.
Which is I think is
one of the key
reasons for the
strong top line, we
had some great new
products. And we
felt good enough
about the year at
the end of the 2nd
quarter, to raise
our guidance again,
a little bit. So we
feel pretty good
about where we are
at. You know we
predicated at the
beginning of our
year, that our input
costs would grow
around, inflation
would be around 9%,
and as we said at
the end of our 2nd
quarter, that is
still where it is
about to be. We feel
that we have managed
thru that
environment very
well, and very happy
with the way that
the business plan is
unfolding for us
this year.
Jim:
A lot of people
are selling these
stocks… obviously
rotating … look you
and I have been
around.. they are
now rotating the
cyclicals… they feel
that the recession
might be over. But
they are also
saying, look dollar
is strong… going to
hurt the food
stocks… hurt the
drug stocks. Can it
hurt General Mills,
the strong dollar?
Ken:
Well, as you
know we have a
growing business
internationally,
Jim, but still the
big bulk of General
Mills is in the
United States, in
North America, so we
will be less
affected by those
currency movements.
Jim:
Ken is not going
to say this, but I
will.. I used to
short Kellogg, and
go long General
Mills, when I was
allowed to do that
on my hedge fund on
these trades,
because Kellogg’s
got massive exposure
overseas versus
General Mills. One
last question, Ken,
do you see any
chance… we have
highlighted
dividends over and
over again on this
show… you have about
a 2.85% yield… how
about a higher
dividend this year
for General Mills?
Ken:
Hey, listen,
that is something
that I will take up
with our board, you
know that is the
kind of thing that
we discuss and plan
long in advance. I
am not going to make
any predications
there. Our dividend
yield we have held
at very consistent
levels over a very
long period of time.
That is one of the
things that, of
course, that people
like about our
stock. They like the
steady growth. And
they like knowing
that that dividend
is going to be
there. And I think
as you know, Jim, we
have paid our
dividend for 110
years. We have never
missed a quarter.
Jim: That
is why I like your
stock. That is why I
recommend it.
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Jim's comments AFTER
the interview:
Okay, Ken Powell,
General Mills
chairman and CEO,
and don’t forget to
catch “The Biggest
Loser” two hour
premier for my
shameless promote of
the network tonight
at 8 pm EST.
Thank you Ken.
Read Jim's next Segment
here
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