In the paragraph, Jeff Siemon introduces the presentation of General Mills’ Fiscal 2025 Second Quarter Earnings, mentioning that there will be a live Q&A session later. Jeff Harmening, the Chairman and CEO, then shares that the company's priority has been to accelerate organic net sales and volume growth by enhancing consumer experiences with their food brands. He highlights that there has been notable progress in the first half of the year, with a 4-point improvement in organic volume growth compared to fiscal 2024. This includes growth in their North America Pet business and increased market share, attributed to their commitment to providing remarkable consumer experiences.

General Mills is focusing on enhancing product offerings and brand visibility to drive performance improvements in several business areas like pet food and cereal while acknowledging challenges in areas like Refrigerated Dough and the Chinese market. Though investing to add consumer value has led to a reduced outlook on operating profit and EPS for fiscal 2025, the company believes this strategy will support long-term growth. Recent Q2 results have exceeded expectations due to timing-related benefits, though these are expected to reverse later in the year. For fiscal 2025, their main priority is to boost organic sales growth and market share by delivering outstanding consumer experiences.

The company plans to generate cost savings to offset inflation and reinvest in its brands while maintaining disciplined capital allocation. In the first half of fiscal 2025, it improved pound and dollar share performance, with significant improvements in competitiveness, especially in Q2. The U.S. pet food business returned to pound share growth and maintained dollar share for the first time in two years. North America Retail experienced broad-based improvement, with strong pound and dollar share trends in most categories, boosted by successful marketing campaigns. However, these gains were somewhat offset by underperformance in refrigerated dough sales at the start of the baking season.

In the second half, the company plans to enhance its momentum in various food businesses and address challenges in the refrigerated dough segment. Efforts include narrowing price gaps, introducing new flavors like "more cinnamon" Pillsbury cinnamon rolls and new cookie varieties, and increasing media support by over 40% for greater visibility. The return of the Doughboy in the campaign is working, and these measures aim to boost consumer value and improve growth prospects, particularly for Pillsbury refrigerated dough in North America Retail.

The North America Pet segment has shown steady progress, with a strategic focus on Blue Buffalo's ingredient quality and improvement plans leading to market share gains. While dollar share remained flat, pound share grew in the U.S. during Q2. Notably, Life Protection Formula dry dog food sales saw high-single-digit growth due to effective advertising. Efforts to boost the Wilderness line included new advertising, smaller package sizes, and the reintroduction of grain-free options. Price adjustments in wet food offerings have yielded positive results. Although the treats segment requires more work, improvements are emerging with better shelf visibility and merchandising. Additionally, plans to acquire Whitebridge Pet Brands' premium cat feeding and treating business, featuring the Tiki Pet and Cloud Star brands, aim to enhance Blue Buffalo's position, especially with the Tiki Cat brand in the fast-growing wet cat food sector.

The paragraph highlights General Mills' recent growth and success across various segments. Tiki Cat saw over 20% retail sales growth, with potential for more expansion. In North America Foodservice, the company achieved strong market share growth, notably through product innovations like the revamped Baked Biscuit line, which has doubled hold time to help operators. They also maintained strong positions in cereal, particularly in K-12 schools, by focusing on nutritional improvements. Internationally, General Mills progressed in market share performance, despite challenges in China, with Häagen-Dazs showing notable retail share growth through increased distribution of popular flavors.

In Q2, Häagen-Dazs shops in China experienced a decline in traffic, prompting efforts to expand distribution through various channels. The company's second priority for fiscal 2025 is to achieve industry-leading cost savings to reinvest in the business, aiming for a higher profit margin than pre-pandemic levels. Record cost savings are projected, with a focus on brand and capability investment. The third priority is strong cash generation, targeting at least 95% free cash flow conversion. The company remains committed to disciplined cash deployment through investments, dividends, M&A, and share repurchases. Recent M&A activities have reshaped 30% of the net sales base since fiscal 2018. Future M&A efforts will focus on seamless transitions and bolt-on acquisitions. Updated fiscal 2025 guidance is mentioned on Slide 17.

The company has reaffirmed its organic net sales guidance, now expecting results toward the lower end of the range. Adjusted operating profit and EPS growth projections have been lowered due to increased investments for volume and market share gains. Free cash flow conversion remains on target. During the second quarter, net sales increased by 2% to $5.2 billion, with organic net sales up 1%. The adjusted operating profit saw a 7% rise in constant currency, helped by cost savings and increased volume, though partly offset by cost inflation and other expenses. Adjusted EPS increased by 12% due to improved operating profit and a reduced share count. Some timing factors positively affected the quarter's results, which are anticipated to reverse in the second half, mainly in Q3. Organic sales growth was supported by higher volume, despite a lower price/mix. Foreign exchange and acquisitions or divestitures had minimal impact on net sales.

In the second quarter, North America Retail organic net sales increased by 1%, largely due to higher retailer inventory influenced by the later Thanksgiving timing, although this is expected to reverse in the third quarter. U.S. Morning Foods saw a 4% sales increase, while U.S. Snacks were up by 1%. However, U.S. Meals & Baking Solutions and Canadian sales declined by 1% and 4%, respectively. Despite facing input cost inflation and higher supply chain costs, the operating profit in North America Retail remained steady due to cost savings and favorable pricing. The North America Pet segment recorded a 5% rise in organic net sales, surpassing retail sales by four points, due to a rebound in retailer inventory. Sales grew across dry food, wet food, and treats, marking the fifth consecutive quarter of market share improvement for the U.S. pet food business.

In the second quarter, the North America Pet segment saw a 36% increase in operating profit due to cost savings, higher volume, and reduced supply chain costs, despite unfavorable price/mix and increased SG&A expenses. The North America Foodservice segment also experienced a 24% rise in operating profit, driven by favorable price/mix, with 8% organic net sales growth led by breads, cereal, and frozen meals. There were strong market share gains in K-12 schools, healthcare, and higher education. However, the International segment's organic net sales decreased by 3% due to declines in China and Brazil, despite growth in distributor markets. Häagen-Dazs shops in China faced significant traffic drops due to macroeconomic challenges, but distribution is expanding to mitigate these effects. The segment's operating profit fell from $35 million to $24 million, impacted by unfavorable price/mix and higher expenses. Cereal Partners Worldwide's net sales rose 2%, with growth in Latin America offset by declines in France and the UK.

In the second quarter, Häagen-Dazs Japan saw a 1% increase in net sales due to growth in handheld formats, though this was partially offset by later product launches in cups. Joint venture after-tax earnings rose 23% due to lower costs and a favorable price/mix at CPW, despite higher expenses and reduced volume. The adjusted gross margin grew by 130 basis points to 36.3% of net sales, helped by cost savings but offset by inflation and a poor price mix. The operating profit margin increased by 100 basis points to 20.3%, benefiting from the gross margin improvement, though higher SG&A expenses were a drag. A timing benefit added 100 basis points to the operating margin, expected to reverse in Q3. Corporate expenses fell by $23 million due to one-time benefits, while net interest expense rose by $7 million due to higher debt. The effective tax rate dropped slightly to 20.1% from 20.8% last year. Average diluted shares decreased by 4% due to share repurchases. First-half net sales remained steady at $10.1 billion, with a 2% increase in adjusted operating profit and a 6% rise in adjusted diluted earnings per share in constant currency.

The paragraph provides an update on the company's financial performance and outlook. In the first half of the fiscal year, operating cash flow increased by 19% to $1.8 billion, driven by changes in accounts payable, while $301 million was invested in capital expenditures. Additionally, $1.2 billion was returned to shareholders through dividends and share repurchases. For fiscal 2025, the company anticipates a need for increased promotional investment due to improved volume and market share, with higher costs expected in the second half. The company projects HMM cost savings to exceed input cost inflation, estimating savings of 5% and inflation at 4% of COGS. Adjusted operating profit is predicted to decline by approximately 8% in constant currency, factoring in various cost pressures. The updated annual outlook forecasts organic net sales to be flat or slightly increase, while adjusted operating profit and adjusted diluted EPS are expected to decrease by 2-4% and 1-3% in constant currency, respectively, with a free cash flow conversion rate of at least 95% of adjusted after-tax earnings.

The paragraph highlights that General Mills' financial outlook does not consider the effects of pending transactions, such as the divestiture of North American Yogurt and the acquisition of Whitebridge Pet Brands. Jeff Harmening expresses optimism about the company's progress in boosting volume growth and market share by enhancing consumer experiences and increasing investments for value amid challenging economic conditions. He expresses confidence in the team's agility and the strategic actions being taken to ensure sustained growth for General Mills in the future.

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