The operator welcomes participants to General Mills' First Quarter Fiscal 2025 Earnings Conference Call and reminds them that the call is being recorded. Jeff Siemon, Vice President of Investor Relations and Treasurer, introduces the speakers, Jeffrey Harmening (Chairman and CEO) and Kofi Bruce (CFO). Forward-looking statements may be made during the Q&A session. Matt Smith from Stifel asks about the shift in at-home food consumption and its impact on General Mills' organic sales outlook. Jeffrey Harmening responds.

In the second quarter, the macro environment played out as expected with gradual improvement in categories. North America retail categories saw a slight increase due to a mix of volume and pricing. The focus for the rest of the year is to continue improving competitiveness. Food consumption at home increased, in line with expectations of consumers seeking value. The company's guidance is not based on category improvement, but on their own competitiveness. Investments in innovation and promotional activity are seeing positive consumer response and expected returns.

Harmening discusses the various ways in which General Mills creates value for consumers, including through couponing, trusted brands, and new products. He also mentions the importance of relevant messaging and packaging, especially during times of economic stress. He feels optimistic about the company's performance in the second quarter due to their portfolio of baking and seasonal items.

In the fourth paragraph of the article, Jeff Harmening discusses the company's progress in improving competitiveness and market share in the NAR and Blue Buffalo segments. He mentions that there is still work to be done, but they expect to see a step-up in the second quarter with the release of new products. Andrew Lazar asks about their expectations for the rest of the year, to which Harmening responds that they are focused on making progress and cannot predict where they will end up at the end of the year. Kofi Bruce also mentions their expectation for equal contributions from volume and price/mix for the year.

In the first quarter, General Mills saw a 1% decline in sales for their pet food brand Wilderness, but they gained market share in their dry pet food business. They have recently launched new advertising for Wilderness, which highlights its high protein content compared to competitors. They also plan to reintroduce some grain-free products and smaller sizes, which have been shown to do well in the current economic climate. In addition, they are working with retailers to improve the way Wilderness is featured in stores. These efforts are expected to lead to further improvements in Wilderness sales in the second quarter.

The speaker discusses their expectation for improvement in the pet business in the second quarter and the Wilderness brand. They also mention their plan to return excess cash to shareholders through share repurchases instead of pursuing large acquisitions. They clarify that they did the same in the last fiscal year and their balance sheet is in a good place. They state their intention to use the proceeds from the divestiture of their American yogurt businesses for the benefit of all investors.

The speaker discusses the company's focus on smaller bolt-on acquisitions and share repurchases. They also mention their ability to do both at the same time and their progress in improving competitiveness. They acknowledge a step backwards in certain product categories but mention upcoming product news in the second quarter.

Jeffrey Harmening, CEO of General Mills, responds to a question about the company's performance in the first quarter and its outlook for the future. He acknowledges that there is still work to be done to achieve growth, but is confident in their initiatives. He also addresses recent concerns from investors about a decline in scanner data, attributing it to a timing shift in merchandising programs. In response to a question about pricing and couponing, Harmening notes that the company is focused on selling the right pack size at the right price in the right channel, and suggests that there may be some price/mix benefit from these efforts in the future.

The speaker discusses the price/mix outlook for the year, stating that there will likely be an equal contribution from rate and mix in their categories. They also mention that their price/mix was down 1% in the first quarter, primarily due to mix. They expect some modest improvement in mix going forward, but it is difficult to predict. The company plans to focus on driving growth and is open to potential bolt-on acquisitions in the range of $1-2 billion, with a potential focus on expanding their international presence or entering the pet market.

In paragraph 11, Kofi Bruce discusses potential acquisitions in categories where the company has a competitive advantage and sees growth, such as pet, snacking, and foodservice. He also mentions a focus on both international and domestic opportunities. In response to a question about the second quarter, Kofi states that they expect to see continued improvement in the top line and gradual improvement throughout the year, with more profit in the back half. In a follow-up question, Kofi is asked about the dilution from a divestiture and whether it includes stranded overhead costs.

The speaker discusses the dilutive effect of a recent sale and the expected timeline for addressing overhead costs. They also mention the existence of TSAs but do not consider them to be material. In response to a question about the impact of the current trend of more food being consumed at home, the speaker states that it is a slight shift and that it is broad based across categories. They also mention that this shift has not affected their promotion or messaging strategy and provide an update on the timing of a planned spin.

The paragraph discusses the current trends in traffic at restaurants and non-commercial outlets, as well as the impact on General Mills' foodservice and retail businesses. It also mentions the company's plans to increase investment in media and brands. In terms of international markets, Brazil has seen improvement while China continues to face challenges.

The speaker is pleased with their company's international business, particularly in Europe and Brazil where they saw growth and improved performance. However, the challenge lies in China, specifically with their Haagen-Dazs shops, where consumer pullback has led to a decrease in shop traffic and profitability. The speaker is not relying on this trend to improve in order to meet their guidance for the rest of the year.

The speaker, Jeffrey Harmening, responds to a question about the impact of the divestiture of yogurt on the company's cross-category strategy. He explains that there is not a significant overlap between yogurt and cereal and that the divestiture will not have a major impact on their approach to retailers or consumer insights. Harmening also mentions that six out of ten categories are showing improvement, but does not specify which ones. The speaker is then asked about the plan for accelerating growth in the remaining four categories.

The biggest areas of focus for General Mills are dough and fruit snacks, with plans to improve in those categories through new products and advertising. The company has a high market share in dough and is bringing on additional capacity for fruit snacks. In North America, the company is working to stay competitive in the current trend of increased at-home eating.

Harmening discusses the different forms of innovation, such as new products, marketing, and pack sizes, and emphasizes the importance of having innovation that is relevant to each category. He mentions that new product innovation is only a small percentage of the business and that the key is to have a balance of innovation across all areas. He also mentions upcoming new products and advertising for Totino's, Old El Paso, and flakier biscuits.

Jeff Siemon, the CEO of General Mills, discusses the company's successful innovation on their billion dollar brand. He mentions that they have good ideas on big brands, including Blue Buffalo, and this has contributed to their success in North America retail. He thanks everyone for their engagement and looks forward to speaking with them again in the future.

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