The company is heading into the next half of the year with robust innovation across its billion-dollar businesses, particularly in cereal, yogurt, soup, Old El Paso, and Haagen-Dazs. Notably, the quality of merchandising has improved, providing better returns on marketing investments despite an increase in the frequency of promotions. This uptick in promotional activities is still below pre-pandemic levels in both frequency and depth, suggesting a controlled approach to driving sales without compromising margins. The effective merchandising and the stable promotional environment are expected to contribute positively to future revenue growth.
The company has repurchased more shares than anticipated earlier in the year, signaling strong financial discipline and commitment to shareholder value. This approach also reinforces the company's solid net debt-to-EBITDA levels, which provides them with the flexibility for strategic acquisitions if opportunities arise that align with business goals. In summary, the increased share repurchasing reflects the company's confidence in its financial strategy and ability to balance returning capital to shareholders while remaining open to growth through mergers and acquisitions.
Despite an $800 million reduction in sales expectations at the midpoint, the company has restrained its earnings before interest and taxes (EBIT) growth guidance revision to a minor extent. The company attributes this to Holistic Margin Management (HMM) savings, which are on track to achieve 5%, surpassing prior expectations of 4%. Additionally, relatively stable inflation and supply chain cost reductions have helped offset revenue pressures. Furthermore, adjustments to incentive compensation based on revised projections have led to almost $100 million in reduced administrative expenses, bolstering the company's ability to maintain profitability guidance within the expected range.
The company's gross margins have recovered to pre-pandemic levels, thanks in part to HMM contributions, but it is also focused on mitigating supply chain disruption costs. Moving forward, gross margin expansion is likely to normalize around historic levels of 4%, assuming the supply chain environment remains favorable. This suggests that while the company anticipates some level of future gross margin improvement, it remains cautious about potential volume deleverage and its impact on profitability.
As the company begins to compete on an even footing with competitors' shelf availability, share performance is expected to improve. By maintaining strong brand support, enhancing product innovation, and ensuring effective in-store execution, the company is poised for continued share growth in 60% of its North American Retail categories. Additionally, while dollar market share has been a challenge, the company reports growth in pound share across 40% of its categories, thanks to its agile response to inflationary pressures.
The company's executives acknowledge ongoing inflation as a factor influencing strategic price and promotional considerations. The expected category growth rate benefits from a lapping of Snap emergency allotments and previous pricing activities. While consumer economic pressures remain a variable, the company is observing improved but still adjusting consumer behaviors in the midst of a new economic reality. In terms of promotions, the quality and return on investment have improved year over year, suggesting that the company is navigating the current economic environment effectively in its marketing strategies.
Despite inflationary headwinds, the company remains committed to pricing strategies that support long-term shareholder value creation and meet consumer needs. The leadership highlights an inflationary environment, particularly within the low single digits, guiding future pricing decisions. The strategic approach appears to be balanced, with a focus on maintaining brand strength and market availability rather than aggressive promotional activity, even as they continue to manage competitive shelf availability and consumer price sensitivities.