The operator, Audra, welcomes everyone to the General Mills Third Quarter and Fiscal Year 2024 Earnings Call and introduces Jeff Siemon, Vice President of Investor Relations and Treasurer. Jeff thanks everyone for joining and reminds them to refer to the press release for important information. He introduces Jeffrey Harmening, Chairman and CEO, and Kofi Bruce, CFO. The first question is from Andrew Lazar at Barclays, who asks about the expected impact on fourth quarter results from lapping the trade expense benefit from last year.

The speaker agrees that the trade phasing is a mechanical issue and expects the fourth quarter to have similar performance to the third quarter, with some external factors playing a role. These factors include lapping of pricing from last year, reduction of snap benefits, and improving shelf availability. The speaker is encouraged by the third quarter results and expects the fourth quarter to have similar year-over-year performance, with the possibility of some inventory movements.

The third quarter results for the Pet division were better than expected, with improvements in sales and profitability. The success was driven by the life protection formula and Tastefuls products, but there is still work to be done in areas like Wilderness. The company is encouraged by the progress made, but it is not yet time to declare victory in the Pet division. The company is focused on continuing to improve and drive profitability in the future.

The speaker discusses the high productivity levels in the Pet division and the disruption costs incurred during the pandemic. They are pleased with the results in the third quarter and are working to improve execution. While they are encouraged by the third quarter, it is too early to predict future outcomes. The speaker is hopeful for a relatively benign year, but it is too soon to provide specific numbers. They mention potential positives such as easy comparisons in Pet, strong market performance, H&M savings, and inflation being disinflationary. However, they are not yet able to fully assess the impact of these factors on their long-term goals.

The speaker discusses the current inflationary environment and hopes for a more benign environment with good productivity and fewer supply chain disruptions. They mention the uncertainty of external factors in the fourth quarter and comment on the third quarter playing out as expected. They also mention the lapping of SNAP reductions in some states and the potential improvements in those states. They decline to comment on future performance but mention good productivity and slowing inflation.

The speaker is discussing the effects of macro factors on consumer behavior and how it relates to the company's performance. He mentions a small benefit in states where they have lapped SNAP benefits, but clarifies that it will take time to see the full impact and the benefit is not significant. He also acknowledges that there are other factors at play, such as pricing and availability changes. In response to a question about the Pet segment, he mentions that their action plans are starting to show results, with wet pet food inflecting from a double-digit decline to growth in the third quarter. He is asked about the success of value-oriented multipacks and how they may inform their outlook for Wilderness in the future.

The company has seen improvements in the wet pet food business, but there is still work to be done to fully recover. The company has taken actions to improve the business and is encouraged by the results. However, there are still challenges with the Wilderness brand, and the company is working on advertising and collaborating with the Pet Specialty channel to address these issues. While net sales for wet pet food have increased, retail sales are still down, but moving in the right direction.

The company's net sales were slightly up in the quarter, but there is still work to be done to improve them further. The company remains focused on portfolio reshaping and is actively looking at acquisitions, with a focus on growth and being disciplined in their approach. They are interested in categories like pet food, snacks, and meals, and will only make acquisitions that make sense for shareholders. The company's CEO declined to comment on recent industry news regarding Ice Cream.

The speaker discusses their company's Ice Cream business, specifically the success of the Haagen-Dazs brand. They mention it as one of their five global platforms and express confidence in its growth potential. When asked about fiscal Q4 revenue, they clarify that they are referring to consumption growth, not accounting factors. The analyst asks about gross margins and the speaker explains that they were impacted by inventory work down and volume deleverage, but they are confident in their overall performance.

The speaker addresses a question about the company's recent inventory absorption and how it affected gross margin. They also mention a shift in consumer behavior towards more food consumption at home, which has benefited their sales.

The paragraph discusses how Americans are dealing with inflation by eating at home rather than dining out, which has benefited the food industry. Private label shares have remained consistent, but the company has been able to maintain growth and gain market share in various categories, such as Pillsbury, refrigerated dough, fruit snacks, and Nature Valley. The company has also seen struggles in categories like bars and yogurt, but is starting to gain momentum in these areas through new product innovation and effective marketing.

The speaker, Jeffrey Harmening, is discussing the performance of the company's yogurt protein product and overall consumption trends. He also addresses challenges in China and Brazil, including difficulties in lapping previous year's sales and economic factors affecting consumer behavior. He hopes to see improvements in the company's Brazilian business in the upcoming quarter.

Jacob Aiken-Phillips asks about the impact of trade timing on the company's fourth quarter and inventory reduction headwinds from last year. Jeffrey Harmening explains that the company's inventory is in a good position and it's difficult to predict changes in inventory. He also mentions that there will likely be a modest change in the fourth quarter but they are not expecting any major changes. Aiken-Phillips also asks about the reduction in incentive compensation.

The speaker is discussing the company's expectations for investing in media and brands in the fourth quarter. They plan to continue investing at a mid-single-digit rate and do not expect any major changes. They also mention the importance of the North America retail segment and the need to see certain indicators, such as flat volume, before giving guidance for fiscal 2025.

The speaker discusses the company's hopes for continued improvement in North America retail and Pet. They mention a potential increase in volume and growth in categories such as cereal and snacks. The company plans to invest in marketing to drive growth and is seeing early signs of a lack of SNAP subsidy headwind. However, the benefit will not be a significant change.

The speaker discusses the impact of SNAP benefits and improved on-shelf availability on the company's growth. They believe the benefits will be modest and vary by category, but any improvement is welcome. They decline to quantify the exact impact of these factors.

The speaker is asking about the current state of the value-seeking consumer in North America retail, specifically in categories such as cereal, go, and frozen snacks where category pricing has increased significantly. They inquire about any potential levers that could be used to increase volumes, such as packaging changes, innovation, or marketing strategies.

The speaker explains that the increase in prices in various categories is due to inflation in input costs, rather than an intentional decision to oversell to consumers. They also mention that consumers seek value in different ways, such as buying in bulk or at discount stores, and that the company's brands provide important benefits to consumers. The speaker does not believe that their pricing has exceeded inflation.

In paragraph 19, the speaker discusses their satisfaction with their position in the market and their plans to continue improving. They mention lapping one-time factors and pricing, as well as their growth in market share in North America retail. They express optimism for continued improvement and competitiveness in their categories. The speaker concludes by saying they expect their third quarter results to continue into the fourth quarter and their goal is to regain top line momentum while remaining disciplined in their P&L.

The company predicts that there will be several factors in the coming months that will affect their performance, such as the lapping of SNAP benefits and on shelf availability. They plan to provide a clear picture of their expectations for fiscal year 2025 in June. The call ended and participants were invited to reach out for any follow-up questions.

This summary was generated with AI and may contain some inaccuracies.