GIS - Earnings call transcript Q2 2022

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Operator

Greetings and welcome to the General Mills Second Quarter Fiscal 2022 Earnings Conference Call.

During the presentation, all participants will be in a listen-only mode. Afterwards, we will conduct a Q&A session. [Operator Instructions] As a reminder, this conference is being recorded Tuesday, December 21st, 2022 [ph]. I would now like to turn the conference over to Jeff Siemon, VP of Investor Relations. ahead. go Please

Jeff Siemon

statements materials, made that we press assumptions and assumptions, press us today's our for session, and including which here Silvana our current quarter everyone. you morning's XXXX. Retail review Kofi Relations Bruce, Thank of facts I impact forward-looking remarks, morning may to reconciliations and our Thank statements Investor and in refer based for We're good available Harmening, Chairman our joining on our to Nudi, Please related time today release everyone second may on pandemic on for listen on Q&A Jon for the North our fiscal to of and views results Q&A and of presentation hope discussed be forward-looking prepared Group view COVID-XX you, had and call. factors this morning our information, release, President potential America session results. It's in our important our this that our CEO; are management's to Jeff website. to the which impact were with note non-GAAP that make segment. on CFO; could

ahead So, started? you please first get get and let's question. go us the to Silvana, can

Operator

with Instructions] [Operator question. your proceed Goldman And Please Certainly. our JPMorgan. first Ken question from with is

Ken Goldman

morning Good enough. everybody. Close

Jeff Harmening

morning. Good

Ken Goldman

the like over, starting that repeats. from what we've the now, You quarter is "hidden bear supply sort highlighted issues pattern for seeing in Great are team been arising", similar unfortunately management guess, sector I then the a to that to you're offset pattern think costs obviously, of actions worst fruit. is, logistics next and whole the hear, while but disruptions

it, some these the continuing So, I the in supply in year? has logistics potential of that shortages kind worsen for any exogenous is, half sort question in wake crop of once bigger issues the cushion of than of guess account bigger usual the again this these up, to guidance to of my and back

Kofi Bruce

This I the Ken. is question. Sure appreciate Kofi.

we guidance, you As we can profit and a the little what of did reflects operating topline think guidance result the alluding environment, a in I EPS on gave profit to which the obviously as you're disruptions which bit than about and to this on see volatility operating the tenfold So chain. cause supply -- amount in increase we the this is of in underlying eight right? root our see of wider

back provision as an that be has linked in expect in the is predictability and what the and half much been not we candid. So, quarter, of to but to improvement

disruptions for of about half the back supply So, in costs. expect change to just last costs relation year, lighter as year, but of chain in ramp-up materially ramp-up the you a volatility supply And seeing we're that we to We a balance in replace costs think those the guidance external these the saw to external chain in the year. it that really in don't the reflects call. the the in

Ken Goldman

share in follow-up. the deal your products just little next for right to where its demand larger quick through case walk obviously, bit cereal then your utilization over are On you Can us few great now. Okay. you've And Thank you in the months. your taken a plants of of own that continues terms grow from having for that's a of issues unfortunate that. business, some competitor your

Jon Nudi

business there short-term good will Hi Ken, and you our it's Jon our some cereal been Nudi. about dislocation tell from has feel certainly major we I really competitors.

years performance. over we will the had really last performance a strong come time, longer fact, Our in which four in

to grow to we to that, continue innovate as our continue we in need and category brands As we invest capacity, feel in share we expect have the and look short-term, we well. at and growth a again

So, short-term, last continuing we've the years, continue we done we with do that's what and feel our over business four to [indiscernible] the about good category.

Jeff Siemon

Thank you. Why don’t we the to go question?

Operator

Certainly.

question from proceed. Barclays. next Lazar Please with is Our Andrew

Andrew Lazar

Holidays Happy everybody. morning. Good

Jeff Harmening

holidays. Happy

Andrew Lazar

Thank thinks customer given the longer of Mills to about I'm sort the shorter term potential currently environment. higher in let's up between, say dramatically curious consumer this how and stepping the Jeff, sort from you. versus serve servicing General profitability benefits term difficult cost for balance the of and

is what sort where So, sale, not the that where of that point would kind fulfilling you and demand like suggesting higher this this the you confidence I is of cut-off to forgo gives we're guess and excess at at yet? a worthwhile, decide like cost

Jeff Harmening

stuff we between and our more we trade-off. cost service shipping we and so and more what efficient in of quite off spent I try between make our incur and but time would customers deleverage this Andrew, take then service growth trade-offs would would sales and trade-off, huge thing. for gas of things bit to sure isn't around be sure probably And sort there we're environment and the always be years a at you the margin foot been create we trade-off customer is game we cost looking these at because to say, XXX a one more get Yes the retail we like a inefficient would that there mean play level I'm most for long truckloads higher a I the looking we the at service, we -- that on there We've things. and game. main What long were is if and not and find because we'd fine efficient, is that's really what of the because reasons, play because that fine

certainly by -- and money look better, filling we're customers and So, products but would moment they we're if to our going they lessening We responsibility the on the shareholders, The I service. end our doing of our would we thing margins day be to will either. be the more make generate any it's are that sales end sure wouldn't for we General consumer making only but less our cash to the we at generating not at look more then have don't we we job. service making now down, at our feel money want Mills' gain is more by retail the

Andrew Lazar

modest, Got Does do XQ. back then EPS more -- I so some, just you Thanks even to And just fiscal in to it. In you follow-up. be that the thanks. EPS And XQ have the more growth much. then General think Kofi or mean expects in right? if far and I XQ this see growth not weighted outlook, a Mills quick say half

Kofi Bruce

reflects on the really that we from QX I will it decline as But work is around of our QX. just sequential it improvement margin off we expectation an QX see to and we that in question. that posted improvement appreciate the

Andrew Lazar

Thank you.

Operator

Our with next proceed your question Markets. is Please from Nik with RBC question. Modi Capital

Nik Modi

guess inflations, guidance? Good Holidays. Happy question delta if question you all elasticity. I seems talking of then I companies of just can worse lot like expected, are everyone in mean the it heard than morning terms things we've is aren't Thank the and you a just I other Where expected? us the were you. passing things about the retailers around on give than on. the just Kofi context the some but better pricing price had And

the thoughts quarters. wanted we that next kind few as over around go So, forward months and I your of get to

Kofi Bruce

Sure.

question. with your Let first me start

are low remaining accelerated In at and to reminder particular, of resin, of So, sourcing about saw as the And green we in in frame in [indiscernible] to really packaging, just fats our raw and that then fiber, in here, was we in the we as particular raw and a we at packaging costs packaging input double-digits, moving what well raw and XX% on double-digits, as the out kind the continued single-digits. that your oils, are in pressure to our now of logistics on the second and relation particular which -- survive to as and And already remainder XX% look elasticity-- loss price material which materials, structure. was materials, question aluminum, expect base, sitting manufacturing manufacturing, logistics, logistics. these look in

Jon Nudi

Sure, its Jon.

is six company last over of one data lever, really a lot we more our things capabilities are we've So, to got that acquisition. pleased the so [indiscernible] with and built analytics strong the years five and we that

in closely So, we've pricing and point. this monitoring, that's see been at meeting expectations obviously, market really the our we reflection taken, that that we've

modeled We have have seen we elasticity something better historically than what to-date. would

monitor As With that. a at elasticity literally we there, basis and pricing continue to [indiscernible] capabilities to daily a on expect adjusted. where a move our to we to we'll we’re the back take moderate -- system and continue the bit looking from see half, more

Nik Modi

guys. lot a Thanks Great.

Operator

Credit with comes Our Suisse. Please next Moskow proceed. question from Robert

Robert Moskow

prices, them your everyone's Hope and also X%, in And like to some your that's the do showing it thanks. Jon, your you're justify to wanted raising well. like, inflation that customers could ingredients show costs I and possible argue transitory. your X% know the pricing maybe you supply customer Because, Hi chain based on is a this? of incurring? you're disruption that to

to want that I conversation So, know how goes?

Jon Nudi

here for in time than the they been long and So, conversations past. have continue make to a I've been are easier I no

job Most recognizes case everyone inflation spend building been and is built so around a time and has to lot basket. of inflation case. was -- I think that our justifications, I of the we market

the of short-term some but time. focusing the macro inflation a Certainly, factors that chain on supply really costs the we incurring cost, with they that the Again understand more I in at point, and retailers conversations. longer are and think So, this the are over aware pricing. and same will incurring to of don't justify we're very really period stick

Robert Moskow

question, kind so Yes, that's Jon. my of

chain designed So, X% as some to is term taking, offset of than factor this inflation that also difficult justification? more to So, offset like longer disruption is X% or well? disruption designed as is the you're it that pricing supply to in to it

Jon Nudi

really consumers could price sure so it's and we off. pricing want look we would how take, costs, we're you really way these the much then pricing that for is the as really chain to balancing make is leveraging is our we short-term right if a that well, of we retailers. we so the That capabilities Yes, supply in offset for And build much obviously at composition wanted, again, that how inflation, that as strong us. our the bogey well, our

pricing a short-term a some So, standpoint from that supply chain view and we're long take is the trends to there are investment. clearly, challenging trying

Jeff Harmening

that they Jon it rest well. think some we these noted good But Robert, up you the to bring answered disruptions, and expect for as our a of of them supply fiscal will year productivity I point, improve capabilities now by the Asia transitory chain we business will a be that But over would will earlier. get the highly terrific more efficient. longer I costs these bear. and Kofi time But confident mean not supply term, costs We over so are had chain are

even over if retailers conversation recoup we can we these confident are that are stabilizes, P&L. time So, once that in September our market with have now, we costs the

Robert Moskow

it. Got

Okay. lot. Thanks a

Jeff Siemon

is one add This Siemon. Jeff I more the to, maybe nail to hit on head. have point

half. While back these to improve we expect necessarily disruption the meaningfully don't in environment

our which costs said, as As the year. we margin last comparisons all get easier bit we really half to supply chain Kofi back year-over-year a have about do is expect in improve, the quite of performance which other more

will margin the So, a half. back and on a basis which operating this gross the headwind, we're really be -- drives in which that is year less cost of seeing improvement year-over-year

Robert Moskow

it's Okay. but questions, Actually Christmas. I more have

gift, gift but you not -- small So, this my is is to something. to ask

Operator

English Jason proceed. Our Goldman from next question Sachs. is with Please

Jason English

Hey comps year Happy with Kofi. Year-on-year, price got is to you you pressure have, But obviously the Siemon, quarter my good to but the I one climbing ask the Jeff and margin subside also coming. the with of finer still questions folks, mounting you've going going of the -- inflation gross question just clarified to the rest and or point. the just morning Holidays. given

in should As about second gross expect based we what your growth margins you in sequentially, expect level dipped a the quarter. margins? gross sequential we we know down -- on this floor Could Is think today?

Jeff Siemon

as the decline think as will think I in of And sequential is improvement improvement can the we've we guidance to we've that's you implied QX and QX. what move see as through from we expect I far given. off about

Jason English

XQ. than Okay, so weaker implicitly be that XQ margins could

Next you began Are resume trade trade noted obviously to still flush question. cereal. similar elasticity, your are cash. The like year. down already categories early of any categories? But down regards consumer to planning we what as And cycle pretty your of you across something has very a begin with U.S. in competitors big et price to behavior, seeing that is in one stimulus for cetera, next

Jon Nudi

is This Jon.

dynamics our categories strengthening. play business the seen out. When our most of We we have business, our look is at in

and we we're to you label look monitor brands continue the lost And we're times versus private share our believe driving and look and during brands back that. the well. that of pandemic, doing private label, share lose We share best, in know we performed business. building innovating we at recession, As continuing our our again what if historically

this point, any haven't in at we change So, seen dynamics.

Jeff Harmening

would add that I And on Jason.

foodservice haven't We in either. seen

pet. in seen haven't We

We seen haven't in Europe.

haven't We Brazil. or in China see

simply behavior. that haven't we seen So,

Jason English

guys. haven't either. lot Yes, by I thanks But it, your I which Holidays. for seen surprised is Happy was asked it question. the competitor why I clarification noting a the

Jeff Harmening

Jason. right. All Thanks

Operator

is Our Bank. Deutsche question from Steve with Please next Powers proceed.

Steve Powers

me good from as well. Yes, and hey, thanks morning

is optimistic you're taking that more all there more of or comments geographic seeing chain facing your supply context, bottlenecks prior there places little just a expecting in places you're guess, release? finding -- disruptions relatively cadence or where are that a of are -- I the On terms versus that you're is there labor in not now et whether you're overlays, you're shortages, in you're what categories I'm a bit where in there optimistic curious. cetera,

Jon Nudi

Jon. it's Steve, hey Yes,

category, is some challenge which cases businesses. right is chains, constrained entire the the all it's material disruptions capacity really in where is the challenges of really across now are the One for our is cases, a extremely on other of disruptions supply impacting

the in taking, as will and not I single is particular suppliers think actions alternate looking area in half in we one to source half. we're production get disruptions bringing where due even do back ingredient, in back past to that the believe on in better we're that material move

with challenged for team that's area see expect the job do do our a hard like the QX. half will we remain lot to are back submission QX think key with a service a in great doing one online some we get and really sourcing bit the more some better. a expect Our and ingredients look been of us QX, We has year really I find this look through of QX will the get but of that better, will levels to QX the come

services we back average, an think the look in will half. So, our similar

Steve Powers

great. Okay,

to be to just that. Just -- clarify

that more to the expecting relief is the you're but less in fair? diversifying So, you're come because sourcing, because get conditions better, and that ingredient

Jon Nudi

way every goes else improvement time see That's and availability fair materials and better, around. a today something seen across we've get huge not we something and the other

So, [indiscernible] to be continues

Steve Powers

I great. was had on where then just And pressure and is Okay, other Australia question margin Europe the the obviously exceptionally acute.

what annual into take on relief of effect? negotiations the quarter -- be will a there, source a go you as price -- so Just as just your far, fourth talking in about relative that relief you're your further just that based negotiations those confidence

Jeff Harmening

than I on There I pretty think what will confirm growth, negotiation pricing segments, contribution and particular, environment. rest why pressure little more pricing. to margins the see you've but outlined that a you there. bit a firm you of on the reflected you've window in constraints on is pricing that you onto look that in at for can't as a as I comment sales forward-looking, is under seen our that's will EU obviously, anything the

So there just of it's add so sales. also it’s we'll XX% it and I leave a its it's X% small our -- total business,

Steve Powers

Yes, understood.

Operator

Nicholson with next Our Wendy from Citigroup. Please is proceed. question

Wendy Nicholson

of terms the on the see that My first just should pricing expect we to question magnitude Hi has do in morning. to good of shelf.

at the for would last you America. in months, six months? maybe it you said Can think X% think how North high that few average be next give sense I us over the a was you increased retail

Jeff Harmening

the we're it already generally pricing that know comment be to but we year, don't announced the forward-looking already specifics in Yes, on just pricing that and of of comment and that we've second that in don't on customers overall the half have our confident I we we so marketplace pricing. forward-looking think the higher will

Wendy Nicholson

assume bit point I term cereal, trends to but enough. Do they're their major competitor But with maybe not as them in seeing promotion a now? sort terms is your effect, kind some their a on the has gaining back regard neutral sort of store branded hands right your supply of threat a share? little tied competitive harder know fair being in have aggressive private activity, is America going to talk said from gain Okay, of your a label behind step-up and you equally your pricing? seeing and But can North in competition you maybe you expect guys of you're I competitor share Just effort really over in they perspective. back fight an from but of guess maybe at been question what are what in other you're some my other basis, to to about longer isn't shares, the the I categories, --

Jeff Harmening

I to what think about business is it's talk competitors probably for the best be is. what their to let outlook and their our pricing going

you proud the Wendy you pet and been of is over One We've period we've been share doing long did in and America we’ve note, a it I'm in Brazil. doing gained I'm business. and noted thing Europe of most Retail, we've that in time and doing China that of our glad been North that

very, our of the in I'm one very and proud things even service think of of effectively customer continue environment, so most our and a we this quality that's the to execution I And tough of keep sign levels.

supply what most so it's it's disruption. that lot not they and A was and happened we're of time through the -- and think happening have happening by that no the is our pandemic, the thing. the not so I important pandemic, material matter before And constrained now did competitors

of yogurt and We've go. in am we things been them most brands and do announced We've things our is our our as added they Europe so this go that restructure well. while all and performance. one reshaping business come pleased we've of business able to those and now come we I dough really But about portfolio the pet and and and divested take so And our have worked organization. a

So, we've of been lot as quality able with to well navigating this have externally. as while a changes internally all competitive that,

Wendy Nicholson

I North in -- haven't to of but to XXXX, the the pipeline can to contributing for things driver announced are seemingly seen, good you of of portfolio XX market looking in share quarters the than terrific, comment if you set yet, maybe America assume the market ways, terms last you kind being generally been And not I launched Retail. come has been strong your as strong Thanks. gains. the innovation assume of innovation six about innovation innovation we've sort I'm hopefully in just think just has be more or business, things kind just conceptually or comes some America as to factors share even still big stronger which over you've the North more of And across months, others. one as But of a thinking calendar a specifics

Jon Nudi

Wendy. Hi sure. Yes,

long noted, a been and of of well is time performing on As we've innovation. period one Jeff really the by is over the fundamentals and fundamentals to those point focusing

customers things We've down. the kept time. key and pandemic on we kept did the brands building that. innovation innovation our was that we view innovating really brand pulled back of So, And and during our appreciated pedal to over the are one that

what of excited we some calendar versus we'd quite innovation saw the and got past expect ideas as case similar are we we in some year better levels move about. So, see year, in into XXXX,

move we'll there the and the is as about less other is So building inflation brands -- whether thing, to or fundamental forward. and continue that we our innovating and not,

Wendy Nicholson

Terrific. Thank you.

Operator

Please with Pamela Our next Stanley. Morgan with is proceed from your question question. Kaufman

Pamela Kaufman

Happy Holidays. Good morning.

of your lagged in adequate -- half that And back you experienced. like the year? were expect During X% North levels inventory consumption because and elaborate you do levels this the you of the mentioned America, the the inventory into And what would quarter, feel contributed that the is some into is continue you a meet you by just to about that dynamics of shipments Can that? challenges to back service as half? elevated demand have related I to guess to you it on follow-up,

Jon Nudi

supply service high those gap that the to of clearly result, Yes, XXs demand we as mid-teens when about that bit hi all have or couldn't saw, about. quarter our in customers lots as and talked during retailers levels, in a quarter down we talked impacted so to service drew challenges chain a of the the the that our and versus targets the ability Pam, result ship the inventory you low we was

close to expect through back we half, to strengthen front continue do the As be back to supply yield as that half Clearly, and to all move get to year. service half. gap do there. we in level expect our believe wouldn't we similar we our XXXX our look that be to is above certainly We is fiscal of beyond, service into the fiscal better our chain goal we'll we that and as shape the that

is we things and sales mentioned not important. be And to pivoted is really our we we chain the and One and certainly share communication a our competition is to job of that shelf that of competition, it's well supply in the while have than our great availability, QX on wanted our think now we that's we are testament it's the the that's on being and better where customers. we than the really lower shelf as with doing

Pamela Kaufman

to current the to operational that over the chain? side to experiencing any changes the manage what you're Great. longer environment? initiatives Thanks. term, that supply operating capabilities there disruption And you or making guess And short-term operations increasing you the on have the investments can automation in are or you're and about talk response in I

Jon Nudi

leaders a We're We daily increasing all through data we our trying huddle sure. one pandemic, the out fruit. issues and put time, some for the about of level of talk are senior historic are help weekly to that with I of look have leveraging at American and really back that's the our continue we of these supply investments period the things across to the a long lot the is challenges work together business meeting one place of for and in capabilities of there. North things some our our there, just the to bear so share analytics for starting [indiscernible] practices retail, chain beginning team that of and Yes,

if us, the full our seeing of business, we you running So, currently, think in they the about for good number have for America, technology. show can our they North more customers, across for that's good We're trucks that are leverage good than that we are good for our margins.

from of challenged analytics centers standpoint, we're distribution We chain at a right also now we're some some a host time. over will standpoint have help other where data a initiatives standpoint. are our those and look giving a of from and opportunities, supply labor facilities there And us

a best consumers. with we Really the pricing to will meeting all lot have the make happening. make know of end the we we've done our customers, can of in to host we communication to service sure then vendors keep given of important and So, real-time the our ingredients with are been most at a the probably the from service trends, supply we But be our a things also communication our sure standpoint. the running, wanted the day, is chain done tighter time and spend where to

Pamela Kaufman

Thank you.

Operator

question David Please from is next Evercore Palmer Our with ISI. proceed.

David Palmer

Happy Good morning. Holidays. Thanks.

of number points. is it chain some you is majority margin steps no the or disruptions, everything decline, can the second supply gross obviously for the on guidance confirm chart. the quarter. net those in There and presentation you other that's would a the mean deleverage, other of slide like other looks But basis do what's chain in XX, is large that. I ballpark the the same through your for how at at half? if year numbers and not of In that Just implied also, about line chart, Thanks else. correct? are out -- the part the disruptions, if least and about you deleverage, to supply which but looking new words, back waterfall effects that item, think Maybe XXX these

Jeff Harmening

me let so, Yes add.

the thank David. So, for question you

going QX with what me Let expect start to and talk forward. about I'll then

think your I about right. So, read exactly is

as to just the factors I back what I the in inflation. step-up is can expect the think related to very think into expect going to back the move or H&M be starting of of is got But points a and you QX, be and the XXX roughly price/mix. about contribution quarter the inflation you offset So, you basis half, forward I combination front those in so impact the certain, disruption half. half price/mix would equal from

disruption So, step this spread in is chain easing into costs. external ramp-up costs, primarily other evenly driven you the there. the because our in not costs, in greater quarters pretty the in across from -- then but saw a the nothing supply supply And and material of chain because as so drag headwind think about comparison by the the last we year, other

expect we to costs these So, ease. don't

them expect year. last saw to We those we -- cost

year about to the to the how So, effectively, the think QX that's QX. we margin as improvement and of back from what drives step half

David Palmer

have you. less Thank the made Jon that what was of one been helpful. mean, about, think mentioned greater elasticities little less And your comment. value XXXX? your lapping that lot What supply we've how thinking much constrained. private you're the it further as been or calendar thinking brands about label remarks that there? that elasticity that's price is say I year, -- perhaps you perhaps favorable thinking you but price and thought good, a of availability we it in more Thanks. into is chain the I of stimulus for get had Great, a get later then lag something would in you and

Kofi Bruce

Yes.

So, let me start first.

might assuming a on out half, question although moderate I your is spoke. I back price in just half. actually increase -- stems elasticity, inflation will to below in are back think have elasticity, inflation the balance we said levels in But balanced. H&M I historically the still our

what guidance. in So, our sales and contained profit is that's

Jon Nudi

to be just pragmatic, we're think right. I trying

a decreasing you are things the although benefits levels. all David, are bit, since real, XXXX mentioned, So, snap still elevated sometime

we're play elasticity how So, standpoint. from out. to see We'll just planning trying a and pragmatic things be standpoint,

David Palmer

Got you. it. Thank

Operator

Chris Our next is from proceed. question Growe Stifel. Please with

Chris Growe

morning. good Hi,

Jeff Harmening

Good morning.

Chris Growe

Holidays I'll Happy add questions. well. just my two I as had

one in first relation expectations, is inflation curious much how and incorporated much will frame that that into is of incremental cost just initial think I'm I how that in you could that's to the pricing this said be you just figure. of The inflation if $XXX from disruptions? million your

hopefully Just ongoing, and of sense and for, what's like stall to will -- will get a what be what transitory?

Jeff Harmening

it. me It's a let great -- at crack a I'll take question Chris.

So, think as year that, a of in of -- that the about sitting came since billion of half than cost the you inflation. in that less little increased is of the our $X.X start in

So, and that which the obviously in back the X% to to for full we're implies be half. double-digits in X% now estimating year,

half customer to supply in is is in the the ensure driven to other all relating direct in in costs so this service really those doing things environment disruption factors inefficiency that key levels. chain, to things most alluded by which that supply we're that a The in Jon of the trading,

Chris Growe

just Okay. for Thank follow-up question. that color you And a then there.

more to weaker. than gross of quarter a that that we to so half second And that the feeling of expected, weaker as I your causing -- pricing that half. margin. but you're gross with you in comments the had come think I'm the versus that year have but flip try for think I'm understand did margin I inflations incremental but to first trying more about XQ about and this just inflation through a that performance was Dave's question, stronger

the but was the -- -- more So, drive heavy a on that gross heavier a in margin? quarter

Jeff Harmening

QX disruption a step-up QX. in move of saw as inflation QX from combination we cost The drag the from of and really we and in came a

into the a QX. And then so from that more already was think actions mid-quarter the to, of our look as bit we we with And then driver as forward, we've we actually to go announced I ramp into contribution probably and I customers start price/mix that negotiated and quarter. as alluded expect fully

Chris Growe

your you Okay. Thank for time.

Jeff Harmening

Thanks Chris.

Operator

proceed your And Please question. Michael our Lavery Piper with be from Sandler. question will final with

Michael Lavery

Thank morning. you. Good

Jeff Harmening

Good morning Michael.

Michael Lavery

that give just various impact testing or chain. a in a what talked disruptions supply or do a and relative about stages the vaccine your us to sense of both? mandate what the the market guidance obviously You've you labor you're might lot at costs assuming Can in

Jeff Harmening

a don't painted. vaccine but our aren't actually expecting provision way to what have course, have for working We it's Obviously, impact it still beyond material specific we mandate. we guidance already on through a its

Michael Lavery

So, if cost already it the did or stick, you've incremental what be got you capture just allow -- again for? pretty would modest

Jeff Harmening

Yes, Michael. far coverage. think second, us the of It I more gives it's

Michael Lavery

while one the America then on laggards. North for just Can it Retail outperforming. you're business is had And great. pretty components, significantly than of factors? a boost? give snacks of maybe innovation given And Okay, or what's more you the a other really But there, is product a is it's if a sense some ability that related it better been supply to to

Jon Nudi

Michael. Yes, hi

the mobile. category see category the the really we more being get grain So, bar people and be accelerate and back lockdown during to

So, are nice. the categories

Our up and QX. XX% largely business actually in

so growing we're that's focused still up. building have, [indiscernible] the in are Just on month not one competitor like in we'll the quite that queuing the that first we're And same past off we're innovation treats to one brands, then categories. brand base. these the probably as you we And kids the segments, go products area We're number products much really the continue doing some mostly half. [indiscernible] see lot to category nicely seeing stay the of

snack we we like new area standpoint. products, probably a and five than competing four category keeping one us and to up capacity are So, brand challenges big share. losing category competitor over the we're the many from innovation with years overall, really and that’s focus spend like for But through just last are building. in bars snacks we that and There

and from to a capacity get challenged back the in standpoint, we continue lot that be continue coming nicely, half more really is grow double-digits, we'll which We to exciting. business

business performing. like So, snacks it's our we how and

Michael Lavery

Okay, great. much. so Thanks

Jon Nudi

Thanks Michael.

Jeff Harmening

wish have that's and everybody Year. during I so Thanks and week. and we We holiday restful think up us morning. everyone's Appreciate much. sticking Thanks this time with season New the the all the before in interest a Okay, catching good discussion. holiday questions we for

Operator

the ask you for please lines. participation We today. your that conference conclude for call disconnect does That thank you your and

General Mills (GIS) 21 Dec 212022 Q2 Earnings call transcript