GIS - Earnings call 1 2024 | General Mills, Inc.

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Operator

Greetings, and welcome to the General Mills Q1 Fiscal '24 Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded on Wednesday, September 20, 2023. I would now like to turn the conference over to Mr. Jeff Siemon, VP of Investor Relations. Please go ahead.

Jeff Siemon

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

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

Operator

question Our comes Ken Goldman Instructions] hour from with JPMorgan. [Operator first

Kenneth Goldman

see mentioned and customers more just taken purchases of customers? seen consumers channels, kind something Nielsen. and have if given as of try any not into place, this You to tonnage? price in expect traffic history? been I'm retain not shifting ] by FDM, guess might to we has yet, [ track trend you past is they're curious, those maybe tracked leaning this more to that I just And have traditional necessarily your

Jeffrey Harmening

the non-measured throughout this commentary on Ken, continue color the in channels first you in But did is that give quarter, why traction to don't So Jeff we'd little increased Harmening. We And Jon right. that? see a and expect Nudi, you're year.

Jonathon Nudi

Ken. absolutely, Yes,

a drove in grow RNS double-digit obviously the which see bit did channels NAR. non-measured rate we a from So ahead of movement quarter, at

at just price about dramatically which as to a our seen a discounting bit, grocery, see expect points continue model, day. in we up pre-pandemic. And deep result our end look frequency we And you of X%, at the traditional the that, doesn't retailers' of don't tools. add invest to we've we as up SRM As versus up model, but

sure. seeing price So more for frequency, versus pre-pandemic we're but bit a points up

Kenneth Goldman

to of in suggesting guess weeks. modeling quarterly trying organic then recent this just growth, providing data, is that of looking color get know bit reasonable you you it. of in a of bit treats not heading just didn't little their low context scanner especially in single-digit kind is at a this a the quickly, guidance, light Got what range [ there, sales looking if performance for. little maybe And within were that's downward just I NAR I ], XQ

Jeffrey Harmening

Go ahead, Jon.

Jonathon Nudi

ahead, Jeff. Go

Jeffrey Harmening

Yes.

the we of factors guidance Foodservice thing huge XX%. color first not importantly, all, the quarter right, sales the that, you're to for Pet that really our I company. for little growing. mean, has that growing commentary that. talked to a -- we well. Yes, important. up had And in due is as Haagen-Dazs this not think as all I'll a lapping, X% That's nicely, because nicely that see we've bit segment I the up nicely really as of on going we business responded I we growth is importantly, -- probably I you of International give And for at either the we're think give to know So business a I rest we expect the important Haagen-Dazs it's But growth, some recall and our year. X% were year only our on to or think about. is and guidance a in and look say would continued the to remember don't rebound business

Bars and are digits and and also growing. on Distributor XX% double business growing France our up businesses business was in our business European Our India

for even it's the while think this And important going I be year. our to note that expectations first it's didn't quarter, meet to so Pet challenging quite

have We quite do segments to big that going well. are X other

mean, NAR. is it up, really in executing merchandising the our distribution well quality we're to comes are NAR, up. As I of our

chains products from okay, perspective and And that quarter. I to quarter a the in made share then happened share say, toughest you pricing well, getting Our just first new performance lapping given and their order, competitors' they really you in in doing might what And is already good. guess gains were ours our are the remind our we're our that up well. supply first back I'd that

Ours too. improving, are

So of in our the year expect and volumes for do as we to rest the at we improve. look NAR those listening,

our and And easier execute throughout supply as well, this tougher as our to have that to think, of all get gets get have NAR chain because will part And with really channels. year. pricing gaining don't as is we lapped, as share that we where they they happening to continue comparisons competition They to positive. better be from continue going improve get just the of to getting the business Importantly, of are now. to

Jonathon Nudi

And it, one want some on I Yes. to add availability. thing color on-shelf

availability different and Jeff this on our and last private label. particularly that's is year, that, and year our competitors great. than better So is touched on-shelf What's remarkably

if look private it's XX RBG, in So categories up you grain points at like availability on-shelf label and year-over-year.

shelf improvement. we we us better that wasn't, will volume and throughout we That year. as for tailwind sequential label us a to a move was that expect this private year, the were that's the see where and while headwind help gets comp So on as

Operator

question Cowen. Robert Moskow with Our TD from next comes

Robert Moskow

to know questions. I X wanted I guess, --

investment amount do pressure volume plan marketing what's significant is But for And you the not have very tactics of you to in a Or this marketing quarter. expected? some you very first would you change getting same And -- if rest mid-year would environment. had you're tough the the keep volume know, You've wanted on? that for year? the investment your I of

Jeffrey Harmening

Welcome to hear first want Rob, is this? you Jeff. this Kofi, all, again. you Good Yes, of back. take to And

Kofi Bruce

Yes. Yes.

least for media double quarter were grow the everything the we of in our on would media in digits at see right balance our that sales expect based line So the we year expect you're this up with correct environment. in on in now, spend we noting, would I Rob, first to spend.

important for us support see we ideas it's environment as behind and quality brand the so especially think to support, stabilize. put I still

Robert Moskow

Can Okay. It's improved major in a the has follow-up? and a business snacking some I you And as mentioned quarter. Your press, were ups had interested ask the in downs. snacking company. in being

expand objectives, a As look through at which area your M&A? key snacking you to possibly want M&A you in and is

Jeffrey Harmening

Rob. Yes,

is things about in you channels us, M&A is whose it we've this that acquisitions our for Jeff. both on order balance are are nature, current will capabilities technology And last said transaction that. But and to rumor to to growth comment, or has synergies. which basis do and able going we've is What also boring I divestitures. There the and in disciplined. we've some marketplace you be will that, will growth tell do very And with and Clearly, no been be by couple mean not what also in generate order I haven't use to knowledge mean we look objective or I disciplined, sheet and can the consistent, really through matter I that transpired changed. both bolt-on So say will years. we our remind in we hasn't of if maybe can we're we what our sales of to add have of been we points over XX that is. the

investors. so, something makes we that, we sense extent on see do our that like And we'll pricing to for but the at that certainly acquisitions, only

We I position you doing play to in. want we for companies volumes and XXX grow we looking I down. M&A, get for when it includes The our a matter the continue them transpired answer know do little -- so brands mean And last over that long because we no. are don't what's that and at now read we've been I've is are really also hasn't to changed. And that. the while years, game hold M&A commentary, We that in we'll go like, no their short-term food comes time.

not going that of a we plan. see volumes certain what up so have Therefore, in really to the to direction. isn't case That's be part we make a gap. And going our is

Operator

Lazar question comes with Andrew Our Barclays. from next

Andrew Lazar

growth slower sales get you talked year sort in I'm any a this year or way? any do driver initial about, of it I next curious high way the impacts obviously as the work that impacted get you expansion of that lot and of if capacity lot the type sales with You've for in-house expectations, single-digit for I -- get as of your X. Does way? Pet And course bringing in the a versus overall does the trying portfolio? got Pet is, guess sort of asking in any to sort of another expected guess over plans in of a result that of Pet impact it's over see -- capacity underway going time still period the

Kofi Bruce

Appreciate Sure. the the is Andrew. start your think end I question, with Kofi. -- back the I'll first. Look, question This of

for I category. on prospects the think long-term the Pet bullish we're still

which supported Buffalo. a term the be X% reminder a the benefit billion to think brands growth, category. pet we growth. like long by over premium humanization population trend will Blue $XX As prevailing it's will a It's X.X% particular, in drive And do

I think capacity term, our food. dramatic expansion dog to plans aren't making changes short we dry in the on

benefits that to help a year, will term. on over being will this as We also it steer year. at benefits capacity we able of important to capacity, production reconstruction minimum would that longer-term business give internal late this online see it's think margin I that we won't the about think the with more intermediate coming this which expect us

feel still on capacity business for So on the this certainly a we strategically. good. long-term and still investor net and and bullish We're

Andrew Lazar

these still things know been are, even hunkering of they're as of people reasons lap. timing I I'm don't But pricing be. or to of and others traveling, you Jeff, industry home more are broadly, don't just way. sequentially what see sort go back were school of where at curious bit. up on little that always cadence now thinking might matter are lot they linear a you perfectly talking I in and And up maybe which what such, that a I we maybe back service marketing seems volume have the are know and it. a guess, to clarity to because as trends levels add Got of I back don't sort of improving certainly. But most a and just lots a it's up-to-date different if as starting back logical volumes the that is on now it place down expectation industry lot in still and your little merchandising a better gets or do forward, there's people just it's maybe line about of spending is And a why then, of sort things that to normal certainly just think

Jeffrey Harmening

sure, three time bit clear to We there us spent it's broad very a And Andrew. reasons. Yes, quite of on are this. that

three trends. one broad mean, what in at now, not are there's the and there thing. so And kind we especially I reasons see as looks one of marketplace for Nielsen

first earlier, for bit do of we upon but growth non-measured channel, little a the one, channels. quite quarter We're in a bit in double this we NAR, in non-measured The example. digits touched first see in up

And a so, of Nielsen is. piece data is as you why certainly see it that

would has be not home, restaurant. flat. away that from pretty Restaurant second been necessarily The food in traffic

fact, restaurant up. been has traffic In quick service

to more move thing, but and back think is and has people changed that we've and and traffic has I a toward there's So flat. What a remained sort and restaurants, being healthcare, hotels, lodging mobile of that education, seen relatively at which is that and reversion logical. value

In look data at fact, year-over-year. the It's up airports. you movement through if

quite bit only Now to a up it's pre-pandemic but back year-over-year. it's levels,

of that would So kind that corroborate thinking.

recession. of the technically, periods, that's to the recessionary trying reason. And economize. we're there's another as probably, Consumer consumer third seen even in is a not recession, kind the So second behavior, we've though

that less. And may that, to we these people [ going anticipate smaller be toxic things be aren't term, sizes very like which will they don't so And pantry and eating are the less. short but in that ],

generally what eating what out fact, is Xx start more cost eating squeezed, of home. what say consumers is as move In is at the to at people happens roughly home. And it now is would I get

there we current pick clear a bit, the in think And those are as the get three fall, what we find probably at-home are routines would that consumers very squeezed, people will we'll in out. And so us is get more little as But that's factors up the environment. think. and that eating to warmer driving

Operator

comes with Sachs. next Our question Jason from English Goldman

Jason English

to seems you on in I point topline. treats, capacity large. like coming have been Instead you, the the get agreement? it's recovery? And is Obviously, point driving your margin get can contributing a a at if to that? The of input big it treat with into but another relief a what's And with you do for lot forward? at year onerous question to PAT, rate vendor. maybe for just of that second my you you with that What's need PAT, don't how persist? costs factor some what's expanded a industry been happening longer. stubbornly margins? it that not question. have margins, we third-party looking And headwind I inflation, not start higher margin and Like some at little will where also long a so, how part know and and what a take-or-pay this is And there get

Kofi Bruce

Sure. the question, Sure. for Jason. Thanks

thoughts. Just a of couple

on on of the don't first, the of profit year. the all business, given think operating year, this of sort you the as expect of we margins the to take improve mix frame So challenges the I

some think of the same As some which so present probably there heavily of the factored labor, particular, structure in and the the in inputs the inputs. In more pet of particular pet and trends are you inflation, are in are costs, conversion food. food stickiness human about in in inputs driving that

to see wouldn't until -- trend on off, expect near-term that inflationary start food. our for see pet pressures that input I So on basket to we any relief the come

flexible suppliers, on have external think generally structure. supply I a our chain, we pretty

need benefit the we be fixed can floor if we have contracts as cost we would the access of it. get where hard to capacity, those We So is don't way I we using structured we mean aren't a structure the paying it.

Jeff Siemon

on on just able point. We we this where second We was factory, close weren't capacity adding reshuffling just we this that Jason, an located. partnership. system. strategic down is have add were were specifically the I supplier a would treats, to capacity Siemon. so Jeff that -- And internal is to

program We have savings cost contract. our into that built HMM

like standpoint can we business. from profitability that what So for do a us that on

Kofi Bruce

a cost the actually case. internal alternative And lower in to it's this production,

Jason English

it. Got there's quarters, like this and the we've to rate, more What's looking It's the service something sequentially. but lot at really one quarter? the And X anything question seasonality the margins. dip? for a I helpful. appreciate margins historically unique we about seen consecutive Food driving we're of not dipped That's back, on of that. slip Or is sequential this take for now rest XX%. Is XX% there should year? bank there,

Kofi Bruce

think will No, volatility we've I I including has margins see as the pricing -- put in which quarters, of on one the through would improve and deconstruction do [ expect is ] couple. business. headwind big take been environment, been a that past several significant a we've been the worked flour we a this the factors this significant margins. moved through That's the as last has in

supply to a chain, I stable of the think HMM challenge delivery. come will this us on giving more the stabilization the from opportunity long-term, business and access

on will buoy to pricing through last the business. benefits in We our of mid-single-digit levels the margins move from that help back are range through expect historical also we'd year. the And the this closer that as significant year's seeing pricing we come

Operator

next question Chris with Our Securities. from Fargo comes Wells Carey

Christopher Carey

and sizes kind pack right SRM? Or stimulate just to like So you in you're of just size the you one that noted any your to about does it using SRM pack kind current adjustments those get methods beyond long SRM would think thinking sales. Pet be business, to pricing the of overall starting is exclusively? are take just of pack market? and And on size How

Jeffrey Harmening

the on -- Chris, questions. good Yes,

of things. Pet On doing we're business, a couple the

important. has we're this spending family. thing also parents -- advertising we're about asked held pet some someone them direct spend, pet earlier would to gives to in that why what what The parents for On but it environment, like the comparative should really and of exactly on, and believe pay first equity and this is marketing we on amount advertising Blue reason a very that spending First, hard-hitting why feeds Blue back say really on. I Buffalo think question we're it the going up more is well rational

would So the I first we're thing going back That's say. that. to

On products. sizes. of give pack the along And we're large from in our not several of a you pricing itself sizes price examples. line, but a medium lines doing our a architecture, We just pet food have couple I'll didn't dry of medium size. we lot some had

introducing -- has those didn't means will same points. mean price treating. And now out kind introducing it margin that That start to a So rolling doesn't in get us, just low but it more of for are we We points. we're be those. some entry-level while them The going. lower some price takes sizes for

variety in will good weighted So like half toward parents. And for we're food, looking probably wet of packs at more things which it's then year. pet the and some that, the back be

are consumers those doing value. a which understand of to is the a know the Buffalo, the premium best proposition that to and we're And make just category. brand. us lots to do value consumers is you And do part we'll things not not money are a it years premium few What the of what is in the of we sure brand. of examples So Blue making of assure brand drop going can I that. lots disrupt premium spent We've

Christopher Carey

Very Okay. helpful.

to strategy inputs? sit to favorable In of year, some you might follow-up. if any there you from the mark-to-market. variability move be Just trying see hedging the margin one just noted press quick basically remind gross that where you and typical for Can we understand us release, the had benefited where

Kofi Bruce

Sure.

gross mark-to-market does So benefit. include reminder, a that as obviously margin, not our adjusted

on get hedging GAAP program. do where we an reporting our treatment hedge not accounting is commodity that So the of our effect

out the trying hedge reminder, we're As XX%. about to the beginning generally at year a at of

across the given and we in all XX% of So X the where are inputs. about we're year, businesses all hedged across our

Operator

Dickerson comes question Rob Jefferies. from with next Our

Robert Dickerson

we of It I growth expected if a sounds yourselves not Maybe Cereal amount just few in for tremendous necessarily various there's over included, minute. move sources, believe the next years. like just to some category the a

So category on kind kind right easier to maybe -- comment reverting to dynamics. probably the Jeff, it's of of pre-COVID back I

the of like the time, there acceleration speaking time, some the Mills during power For the I of was that felt quality just period for General same specifically, of to brand.

So like Crunch, really has your Cheerios, Cinnamon own done well. Toast

curious X years, of next state So continue you secondly, portfolio, And just share kind forward, why would I to relative year, X prior because like category to then food you've the that so? your let's like say, think that for, like of conviction you kind like think overall the what's not next I'm a of your dynamic, and to the even reminder. just as done that just grow just ability power within years given level guess or gain might

Jeffrey Harmening

Yes. Thanks, Rob.

Jon and up some Let me provide commentary necessary. follow as then

you in And The XX%. morning cereals XX% reminder, is breakfast the #X know first breakfast. I still guess it's I for item would let that eatings, of almost the

that's in the here So U.S.

consumed highly in item morning. still cereal. the it's So well doing We've been in very

than think, years gained last know We've X share, the X I you in a As more we've row. over that XX% grown years.

in in Crunch. the X have and We category Cinnamon biggest the Toast brands Cheerios

Mills. items XX% categories I X We are of XX%. last have volume, of X think big product General the it's new almost from and And

well, We're grow. well. So developing to continue we we're equities innovating our

to bit brands. how in grow we what like we else And We of Cereal. been every so competitors you'll competing. year. year take the every ask we've hopefully but everybody keeping and category, But little cereal is like rest little says, bit my growth, love a a expectation of business our I the in the have for share our that

Jon, to So want you add to that? anything

Jonathon Nudi

hit the of it's a mean believe you the in think it at I well. and end category. day, we cereal, I great think we

the As And today. been Jeff performing it's continue mentioned, to board. the said, most we've to plan America well in Jeff we eaten widely really as that. do across breakfast And

well. lot. runs grow Jeff way P&L a little can a the that need the really business for the to said, As us, and don't bit like we We as looks grow

So going decade Cereal about to today more than We're excited a keep we're were even investing. ago. we

again, the last in mentioned, Jeff clear keep share we're As category. share and have last the the so, category, grew the leader investing of today. growing X X years years. X and We're in the and history we'll been or of that And keep the

a lot other if gets good happens competitors a is, our one would we is question get you what what more tell actually we of major focused? The And thing. that's

major better. supporting marketing back you history does the go the innovation, as in well with X the through category as If the are category category when competitors

hope can that forward. we comes play, everyone we move continue to as So those categories and to grow we

Robert Dickerson

that the the clarification as And Pet Superb. really did pronounced I quick then was much around lot of not A QX, QX. year right. we the just you question on year, believe All Pet. to relative really a is given drivers fairly de-load. last commentary like get improving through inventory that a have

from So specific that to maybe of kind a it is out QX to in should maybe there tailwind little and dynamic your revert volume we de-load was Or basically then some provide some Pet? starts thinking to be some reload being to without in makes of of of kind some inventory rebound sold normal is QX? sense? But the now a that of just that as kind deal, kind traditional bit more if year-over-year through maybe of maybe

Jeffrey Harmening

would tough guess learned we've the owned business I things trying years much The a brand, on doubled of with go it, Pet go. great about also short what it's else is we first this the one a category everything is say way and -- to I've business. quarter-by-quarter in the e-commerce But X I that, all, to and of a

slowed we to point, as de-load second inventory true is an has vary try business tends of not do up up And going bit, the inventories bit. against quarter. last out I'm but So that a inventory also We're true. that happens. But system. come That to what it's prognosticate quite bring you a had the the going down to little

order we're not in guidance. we anticipating rebound quarter. us what happens in the second to what for our see we'll quarter first quarter so the a the hit But in in saw big from second And

Operator

Max Our comes Paribas. next from BNP with question Gumport

Max Andrew Gumport

were starts if as the your displays, anticipated. to wondering and incremental events, these up seeing We're this return also it? industry associated some aren't proving with you that have digits, you're hearing displays with think dynamic endcap mid-single is we're to As especially own the to lift merchandising and been as quality what might of be driving

Jeffrey Harmening

Jon on you comment want Nudi, do that? to

Jonathon Nudi

Yes, absolutely.

So as digits mentioned look bit up large, we but of see XX% merchandising we and at I at down earlier, about a fell mid-single frequency versus pre-pandemic levels.

One invested as before, I of SRM capabilities. things, the mentioned we've in is

Our competition have and as our retailers well also. has

the So actions as can all various are take. of us pricing modeling we

some I maybe are think of pre-pandemic. different the owned we tactics than what

the I discounts dollars driving know actually out category as of category. drives It that of all think, the deep out well. profit drives we

for what frequency maybe higher the day, deal of And category a higher more a with actually points, across isn't price lift points. us higher. our all is merchandising more So of of as frequency the the that, at bit little you maybe at on you're each year, the when the more add seeing well. result as for But price and end dollars your drives up more retailers

we're merchandising right, maybe I big can retailers at slightly higher the a all good a day, a to from the what real -- off all it's are difference, delivered have But category. models of expect conversation versus believe the or that think, points. we past SRM with a we good have end the smaller performance. again, for And on in thing a you So that seeing price sophisticated developed capabilities a of and are us now pretty lifts the

Jeff Siemon

the feel think didn't wrap questions continuing speaking to so with we everyone, much. morning. again the this throughout know and I to on up time connect quarter. Okay. to we're coming next we'll to Thanks Frank, call to look going there. with day get forward Look it follow or appreciate to please I forward so I the up any everyone's free days. you,

Operator

Have disconnect does great today. conference day, you participation We That for line. that your for and a please the everyone. conclude thank ask call your you

General Mills (GIS) 20 Sep 232024 Q1 Earnings call transcript