Company Performance - General Mills CEO discusses earnings [1] Market Trends & Challenges - Addresses consumer demand challenges [1] - Discusses economic uncertainty [1]

Group 1 - General Mills reported mixed Q4 results, with earnings of $0.74 per share beating expectations by 3 cents but down 25% from $1.01 per share in the same quarter last year [3][4] - Revenues for General Mills were $4.56 billion, missing estimates by 1.04%, and the stock is trading down 3% following the news [4] - Year-to-date, General Mills' stock is down 16% [4] Group 2 - Micron is set to report fiscal Q3 results, with expectations of a 156% year-over-year increase in earnings and a 30% rise in revenues [7] - Pre-market trading shows Micron down 1% at the moment but up more than 50% year to date [7]

Financial Data and Key Metrics Changes - The company is focused on returning to volume growth, particularly in North America Retail (NAR), with significant investments in value and advertising leading to positive results [6][9] - The pricing mix in North America Retail was down 3% and down 1% at the company level, indicating challenges in maintaining pricing power [50][56] Business Line Data and Key Metrics Changes - The company has seen share growth in its international businesses, foodservice, health share, and pet segments, indicating a positive trend across various business lines [8] - The pet food business has experienced volatility due to a high proportion of e-commerce sales, but overall inventory levels are in a good place [33][34] Market Data and Key Metrics Changes - The fresh pet food segment is currently valued at $3 billion and is projected to grow to $10 billion in the next ten years, highlighting significant market potential [67] - The overall pet food category is growing at a slower rate than previously expected, with current growth rates around 12% to 13% [65][66] Company Strategy and Development Direction - The company is committed to significant investments in advertising and new product launches to drive growth, particularly in the fresh pet food category [20][67] - The strategy includes targeted pricing actions in specific categories to maintain competitiveness without engaging in a race to the bottom [50][52] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to rebuild margins over time, despite current investments impacting short-term profitability [25][28] - The company is focused on improving its value proposition and marketing effectiveness to drive consumer engagement and sales growth [107][108] Other Important Information - The company is experiencing a shift in consumer preferences towards protein-rich products, with new product launches expected to capitalize on this trend [85][87] - There is an emphasis on seasonal innovation, with plans to increase seasonal product offerings by 50% to enhance consumer engagement [90] Q&A Session Summary Question: Insights on margin potential for Blue Buffalo - Management highlighted strong consumer resonance with the Blue Buffalo brand and expressed confidence in building a profitable business through national launch efforts [15][17] Question: Balancing reinvestment and margin profile - Management acknowledged the need for careful management of reinvestment to avoid long-term margin erosion, with some investments expected to be temporary [25][28] Question: Clarification on pet inventory levels - Management confirmed that pet inventory levels are stable, but acknowledged the inherent volatility in e-commerce sales affecting retail inventory [33][34] Question: Organic revenue phasing for the year - Management indicated that trade expense phasing will impact organic sales numbers, with expectations for gradual improvement as investments take effect [45][46] Question: Competitive response to pricing actions - Management emphasized that pricing actions are targeted and not a broad-based reduction, aiming to maintain brand value while improving marketing effectiveness [50][52] Question: Fresh pet food market growth expectations - Management remains optimistic about the fresh pet food segment's growth potential, citing ongoing trends in pet humanization and market expansion [65][67] Question: Salty snacks performance and strategy - Management acknowledged challenges in the salty snacks category due to discretionary spending but expressed confidence in upcoming innovations to drive improvement [108]

Financial Data and Key Metrics Changes - The company is focused on returning to volume growth, particularly in North America Retail (NAR), with significant investments in value and advertising leading to positive results [5][6] - The company reported a price mix decline of 3% in North America Retail and 1% at the enterprise level for the quarter [48][55] Business Line Data and Key Metrics Changes - The company has seen share growth in its international businesses, foodservice, health share, and pet segments, indicating a positive trend across various business lines [6][7] - The pet food business has shown stability and slight growth, with successful advertising campaigns contributing to improved performance [35][36] Market Data and Key Metrics Changes - The fresh pet food segment is projected to grow significantly, with expectations of reaching $10 billion in ten years, indicating a strong market opportunity [68] - The overall pet food category is currently growing at about 12% to 13%, down from previous higher growth rates, but still presents a substantial market for the company [66][68] Company Strategy and Development Direction - The company is committed to expanding value investments in targeted businesses and enhancing consumer engagement through new product launches and marketing initiatives [5][6] - The strategy includes a focus on innovation in protein offerings and leveraging seasonal marketing opportunities to drive sales [90][91] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to rebuild margins over time despite current reinvestment strategies, emphasizing the importance of achieving scale in new investments [25][26] - The company is prepared to navigate inflation and tariff impacts while maintaining flexibility in its strategic revenue management [64][66] Other Important Information - The company is experiencing variability in pet inventory levels due to the high proportion of e-commerce sales, which are more volatile compared to traditional retail channels [31][32] - Significant marketing investments are planned for the national launch of fresh pet food, with a focus on generating trial and awareness among consumers [101] Q&A Session Summary Question: Insights on margin potential for Blue Buffalo - Management highlighted strong repeat rates and consumer resonance with the Blue Buffalo brand, indicating confidence in building a profitable business through national launch efforts [15][16] Question: Ensuring responsible margin management amid reinvestment - Management noted that some reinvestment factors are temporary, and they expect to mitigate tariff impacts while managing costs effectively post-Yoplait divestiture [25][26] Question: Clarification on pet inventory expectations - Management indicated that while there is some lumpiness in pet inventory, overall levels are in a good place, and they are cautious about predicting future movements [31][32] Question: Organic revenue phasing and category growth expectations - Management acknowledged trade expense phasing impacts on organic sales and emphasized a focus on competitiveness rather than relying on category rebounds [43][44] Question: Competitive response to pricing reinvestments - Management assured that pricing actions are targeted and not a race to the bottom, with a focus on maintaining brand value while investing in marketing and innovation [48][49] Question: Future pricing power and fresh business growth - Management emphasized the need for a balanced approach to growth through volume and pricing, with confidence in the long-term potential of the fresh pet food segment [60][66] Question: Evaluation of organic innovation versus acquisitions - Management stated that they evaluate growth opportunities based on their ability to win organically and have confidence in their capabilities to succeed in the fresh pet food category [105][106] Question: Performance outlook for salty snacks - Management acknowledged challenges in the salty snacks category due to discretionary spending but expressed optimism about upcoming innovations and marketing strategies [110][111]

Core Viewpoint - General Mills reported quarterly earnings of $0.74 per share, exceeding the Zacks Consensus Estimate of $0.71 per share, but down from $1.01 per share a year ago [1][2] Financial Performance - The earnings surprise for the quarter was +4.23%, with the company having surpassed consensus EPS estimates in all four of the last quarters [2] - Revenues for the quarter were $4.56 billion, missing the Zacks Consensus Estimate by 1.04%, and down from $4.71 billion year-over-year [3] - The company has topped consensus revenue estimates twice in the last four quarters [3] Stock Performance - General Mills shares have declined approximately 16.3% year-to-date, contrasting with the S&P 500's gain of 3.6% [4] - The stock currently holds a Zacks Rank 4 (Sell), indicating expectations of underperformance in the near future [7] Future Outlook - The current consensus EPS estimate for the upcoming quarter is $0.94 on revenues of $4.62 billion, and for the current fiscal year, it is $3.87 on revenues of $18.95 billion [8] - The estimate revisions trend for General Mills was unfavorable prior to the earnings release, which may impact future stock performance [7] Industry Context - The Food - Miscellaneous industry, to which General Mills belongs, is currently ranked in the bottom 21% of over 250 Zacks industries, suggesting potential challenges ahead [9] - Comparatively, Lamb Weston, another company in the same industry, is expected to report a year-over-year earnings decline of -16.7% [10]

Financial Data and Key Metrics Changes - For fiscal year 2025, organic net sales decreased by 2%, adjusted operating profit and adjusted diluted EPS were down 7% in constant currency, reflecting a decision to increase investments in response to consumer behavior changes [4][46] - The fourth quarter reported net sales were $4.6 billion, down 3%, with organic net sales also down 3% from the prior year [34][46] - Adjusted operating profit for the fourth quarter was $622 million, down 22% in constant currency, and adjusted diluted EPS totaled $0.74, down 27% in constant currency [35][46] Business Line Data and Key Metrics Changes - North America Retail's fourth quarter organic net sales were down 7%, lagging Nielsen measured U.S. retail sales by approximately three points [37] - North America Pet segment saw a 3% increase in organic net sales driven by higher volume, with reported net sales up double digits for wet food and treats [39] - North America Foodservice organic net sales decreased by 1% in the quarter, while full year organic net sales grew by 2% [42] - International segment posted a 9% increase in fourth quarter organic net sales, driven by strong growth in Brazil and distributor markets [43] Market Data and Key Metrics Changes - North America Retail faced challenges due to value-seeking consumer behavior and weaker sentiment, particularly impacting sales trends [5][6] - The International segment experienced modest organic net sales growth, with declines in China offset by growth in other markets [44] Company Strategy and Development Direction - The company aims to restore volume-driven organic sales growth by investing in product innovation, packaging, and consumer value [3][11] - Plans for fiscal 2026 include maintaining a balance of reinvesting for long-term growth while driving cost savings [12][28] - The company is focusing on enhancing brand remarkability through a structured framework assessing product, packaging, communication, and value [12][15] Management's Comments on Operating Environment and Future Outlook - Management anticipates a volatile operating environment with consumers remaining cautious due to economic uncertainties [10][11] - The company expects to face headwinds from input cost inflation and tariffs, but plans to mitigate these through strategic actions [50][51] - For fiscal 2026, organic net sales are expected to range between down 1% and up 1%, with adjusted operating profit projected to decline by 10% to 15% in constant currency [53] Other Important Information - The company returned $2.5 billion to shareholders through dividends and net share repurchases in fiscal 2025 [10][48] - A global transformation initiative is expected to generate $100 million in cost savings, which will be reinvested in growth [31][33] Q&A Session Summary Question: What are the expectations for organic sales growth in fiscal 2026? - The company expects organic sales growth to improve, driven by stronger competitiveness and investments in product innovation [49][53] Question: How is the company addressing input cost inflation? - The company is working to mitigate impacts through product reformulation and ingredient substitution while planning for significant investments in value and innovation [50][51] Question: What are the plans for the North America Pet business? - The company plans to accelerate growth in the North America Pet segment by expanding the Blue Buffalo portfolio and launching new products [22][24]

Financial Data and Key Metrics Changes - For fiscal year 2025, organic net sales decreased by 2%, adjusted operating profit and adjusted diluted EPS were down 7% in constant currency [4][42] - Fourth quarter reported net sales were $4.6 billion, down 3%, with organic net sales also down 3% from the prior year [30][42] - Adjusted operating profit for the fourth quarter was $622 million, down 22% in constant currency, and adjusted diluted EPS totaled $0.74, down 27% in constant currency [31][42] Business Line Data and Key Metrics Changes - North America Retail's fourth quarter organic net sales were down 7%, with operating profit down 29% in constant currency [33][34] - North America Pet segment saw a 3% increase in organic net sales driven by higher volume, while operating profit was down 3% in constant currency [35][36] - North America Foodservice organic net sales decreased by 1% in the quarter, but operating profit increased by 5% in constant currency [38][39] - International segment organic net sales increased by 9% in the fourth quarter, driven by strong growth in Brazil and distributor markets [40] Market Data and Key Metrics Changes - North America Retail's sales trends lagged Nielsen measured U.S. retail sales by approximately three points, primarily due to trade expense timing headwinds [33] - The International segment's net sales growth was partially offset by declines in China, but 59% of priority businesses grew or held share for the full year [40] Company Strategy and Development Direction - The company aims to restore volume-driven organic sales growth by investing in consumer value, product news, innovation, and brand building [3][51] - Key priorities for fiscal year 2026 include returning North America Retail to volume growth, accelerating North America Pet growth, and driving efficiency to fund these investments [10][20] - The company plans to leverage its Remarkable Experience framework to assess brands and tailor investments accordingly [11][12] Management's Comments on Operating Environment and Future Outlook - Management expects the operating environment to remain volatile, with consumers continuing to seek value amid widespread uncertainty [9][10] - For fiscal year 2026, organic net sales are expected to range between down 1% and up 1%, with adjusted operating profit and diluted EPS expected to decline by 10% to 15% in constant currency [49][50] Other Important Information - The company returned $2.5 billion to shareholders through dividends and net share repurchases in fiscal year 2025 [9][44] - A global transformation initiative is expected to generate $100 million in cost savings, which will be reinvested in growth [29] Q&A Session Summary Question: What are the expectations for organic sales growth in fiscal year 2026? - The company expects organic sales growth to improve in fiscal year 2026, driven by stronger competitiveness in response to investments in Remarkability [45][49] Question: How will the company address input cost inflation and tariffs? - The company anticipates input cost inflation of roughly 3% and a potential additional risk of 1% to 2% from tariffs, but is working to mitigate these impacts through various strategies [46][47] Question: What are the plans for the North America Pet business? - The company plans to accelerate growth in the North America Pet business by investing in core Blue Buffalo lines and expanding into new fast-growing spaces [20][21]

Financial Data and Key Metrics Changes - For fiscal year 2025, organic net sales decreased by 2%, adjusted operating profit and adjusted diluted EPS were down 7% in constant currency, reflecting a decision to increase investments in response to consumer behavior and market volatility [4][46] - The fourth quarter reported net sales were $4.6 billion, down 3%, with organic net sales also down 3% from the prior year [34][46] - Adjusted operating profit for the fourth quarter was $622 million, down 22% in constant currency, and adjusted diluted EPS totaled $0.74, down 27% in constant currency [35][46] Business Line Data and Key Metrics Changes - North America Retail's fourth quarter organic net sales were down 7%, lagging Nielsen measured U.S. retail sales by approximately three points [37] - North America Pet segment saw a 3% increase in organic net sales driven by higher volume, outperforming retail sales by roughly three points [39] - North America Foodservice organic net sales decreased by 1% in the quarter, while the International segment posted a 9% increase in organic net sales driven by strong growth in Brazil and distributor markets [42][44] Market Data and Key Metrics Changes - North America Retail faced challenges with a 3% decline in organic net sales for the full year, driven by lower volume and unfavorable price mix [38] - The International segment's full year results rounded to flat, with growth in distributor markets offset by declines in China [44] - The North America Pet segment showed modest organic net sales growth for the full year, with dollar share growth in dog feeding [40] Company Strategy and Development Direction - The company aims to restore volume-driven organic sales growth in fiscal 2026 by investing in consumer value, product news, and innovation [3][55] - Key priorities for fiscal 2026 include returning North America Retail to volume growth, accelerating North America Pet growth, and driving efficiency to fund these investments [11][22] - The company plans to leverage its Remarkable Experience framework to assess brands and tailor investments accordingly [12][15] Management's Comments on Operating Environment and Future Outlook - Management anticipates a volatile operating environment in fiscal 2026, with consumers remaining cautious and seeking value amid economic uncertainty [10][11] - The company expects organic sales growth to improve in fiscal 2026, driven by stronger competitiveness and volume outpacing price mix [49] - Input cost inflation and tariff impacts are expected to be headwinds, but the company plans to mitigate these through various strategies [50][51] Other Important Information - The company returned $2.5 billion to shareholders in fiscal 2025 through dividends and net share repurchases [10][48] - A global transformation initiative is expected to generate $100 million in cost savings, which will be reinvested in growth [31][33] - The company plans to launch a new line of fresh pet food, "Love Made Fresh," which is projected to capture significant market share in the growing fresh pet food segment [27][28] Q&A Session Summary Question: What are the expectations for organic sales growth in fiscal 2026? - The company expects organic net sales to range between down 1% and up 1%, with adjusted operating profit and diluted earnings per share expected to decline by 10% to 15% in constant currency [53] Question: How will the company address input cost inflation and tariffs? - The company anticipates input cost inflation of roughly 3% and additional risks from tariffs, but is working to mitigate these impacts through product reformulation and strategic revenue management [50][51] Question: What are the key priorities for fiscal 2026? - The company has set three clear priorities: returning North America Retail to volume growth, accelerating North America Pet growth, and driving efficiency to support these investments [11][22]

Fiscal Year 2025 Performance - General Mills' organic net sales decreased by 2%[10], adjusted operating profit decreased by 7%[10], and adjusted diluted EPS decreased by 7%[10] in constant currency - Organic volume was flat compared to the previous year, a 3-point improvement from fiscal year 2024[11] Q4 2025 Results - Net sales were $4.556 billion, a decrease of 3%[67] - Adjusted operating profit was $622 million, a decrease of 22%[67] in constant currency - Adjusted diluted EPS was $0.74, a decrease of 27%[67] in constant currency Segment Performance - North America Retail organic net sales decreased by 7%[71] for Q4 and 3%[71] for the full year, with segment operating profit down 29%[71] and 11%[71] respectively - North America Pet organic net sales increased by 3%[75] for Q4 and were flat for the full year[75], with segment operating profit down 3%[75] and up 3%[75] respectively - North America Foodservice organic net sales decreased by 1%[80] for Q4 and increased by 2%[80] for the full year, with segment operating profit up 5%[80] and 13%[80] respectively - International organic net sales increased by 9%[85] for Q4 and were flat for the full year[85], with segment operating profit up 42%[85] and down 33%[85] respectively Key Priorities and Initiatives - The company aims to restore volume-driven organic growth in fiscal year 2026, supported by increased investment[8, 102] - General Mills is focused on delivering remarkable experiences across its portfolio to improve competitiveness[12] - The company plans to drive efficiencies through Holistic Margin Management (HMM) cost savings, targeting approximately 5% of COGS in fiscal year 2026[61] - A global transformation initiative is being launched to streamline processes and generate $100 million in cost savings for reinvestment[63] Cash Flow and Capital Allocation - The company returned $2.5 billion to shareholders through dividends and net share repurchases[29] - Free cash flow conversion was 97%, exceeding the long-term target of 95%+[29] Fiscal Year 2026 Outlook - Organic net sales growth is projected to be between -1% and +1%[101] - Adjusted operating profit growth is expected to be between -15% and -10%[101] in constant currency - Adjusted diluted EPS growth is also projected to be between -15% and -10%[101] in constant currency

Financial Performance - Net sales for fiscal 2025 were $19.5 billion, a decrease of 2% from the prior year, with organic net sales also down 2%[5] - Fourth-quarter net sales were $4.6 billion, down 3%, with organic net sales also down 3%, impacted by a 2-point headwind from unfavorable trade expense timing[9] - Operating profit for fiscal 2025 was $3.3 billion, down 4%, while adjusted operating profit was $3.4 billion, down 7% in constant currency[5] - Diluted earnings per share (EPS) for fiscal 2025 was $4.10, down 5%, and adjusted diluted EPS was $4.21, down 7% in constant currency[5] - Net earnings attributable to General Mills for fiscal 2025 were $2.3 billion, an 8% decrease from $2.5 billion in fiscal 2024[33] - Total net sales for fiscal year 2025 decreased by 2% to $19,486.6 million compared to $19,857.2 million in fiscal year 2024[38] - North America Retail segment sales declined by 5% to $11,907.0 million in fiscal year 2025, while International segment sales increased by 2% to $2,797.8 million[38] - Operating profit for the North America Retail segment fell by 11% to $2,729.9 million in fiscal year 2025, while the North America Foodservice segment saw a 13% increase to $355.4 million[38] - The company reported a net earnings of $2,318.9 million for fiscal year 2025, down from $2,518.6 million in fiscal year 2024[44] - The company reported a total operating profit decrease of 8% for the fiscal year ended May 25, 2025, compared to the previous fiscal year[80] Segment Performance - The North America Retail segment reported a 10% decline in fourth-quarter net sales to $2.6 billion, with organic net sales down 7%[12] - The North America Pet segment saw a 12% increase in fourth-quarter net sales to $675 million, driven by a 9-point benefit from the North American Whitebridge Pet Brands acquisition[14] - The International segment's fourth-quarter net sales increased by 11% to $739 million, with organic net sales up 9%[18] - North America Retail segment reported a 29% decline in operating profit on a constant-currency basis for the quarter ended May 25, 2025[80] - International segment achieved a 42% increase in operating profit on a constant-currency basis for the same quarter, despite a 50% negative impact from foreign currency[80] Cash Flow and Investments - Operating cash flow for fiscal 2025 was $2.9 billion, down from $3.3 billion in the previous year, primarily due to lower net earnings[24] - Capital investments decreased to $625 million in fiscal 2025 from $774 million in fiscal 2024[24] - Net cash provided by operating activities for fiscal 2025 was $2,918.2 million, leading to a free cash flow of $2,292.9 million[85] - Free cash flow conversion rate for fiscal 2025 was 97%, indicating strong efficiency in converting earnings to cash[85] Future Projections - The company aims to restore volume-driven organic sales growth in fiscal 2026, focusing on consumer value, product innovation, and brand building[4] - For fiscal 2026, organic net sales are projected to range from a decline of 1% to an increase of 1%[28] - Adjusted operating profit is expected to decrease by 10% to 15% from the $3.4 billion reported in fiscal 2025[28] - Adjusted diluted EPS is anticipated to decline by 10% to 15% from the $4.21 earned in fiscal 2025[28] - The net impact of divestitures and acquisitions is expected to reduce full-year net sales growth by approximately 4%[28] - For fiscal 2026, the company expects a net sales growth reduction of approximately 4% due to foreign currency exchange rates, acquisitions, and a 53rd week[55] - The company anticipates restructuring and transformation charges for fiscal 2026 to total approximately $90 million to $95 million[55] Dividends and Shareholder Returns - The board declared a quarterly dividend of $0.61 per share, a 2% increase from the previous rate of $0.60[26] Restructuring and Charges - Restructuring, transformation, and impairment charges totaled $83.9 million in Q4 fiscal 2025, compared to $111.4 million in Q4 fiscal 2024, with total charges for fiscal 2025 amounting to $259.0 million, up from $61.0 million in fiscal 2024[3] - The company recognized $69 million in severance and other benefit costs related to restructuring actions in fiscal 2025[3] - Integration costs related to acquisitions in fiscal 2025 amounted to $14 million, primarily from the acquisition of Whitebridge Pet Brands[4] - The company incurred restructuring and transformation charges of $87.5 million for the fiscal year ended May 25, 2025[83] Taxation - The effective tax rate for fiscal 2025 was 20.2%, compared to 19.6% in the previous year[23] - The effective tax rate for Q4 fiscal 2025 was 18.3%, down from 20.1% in Q4 fiscal 2024, primarily due to nonrecurring discrete tax benefits[51] - Adjusted effective tax rate for fiscal 2025 was 20.6%, compared to 20.1% in fiscal 2024, reflecting changes in nonrecurring tax benefits[51] - Adjusted effective income tax rate for the quarter ended May 25, 2025, was 19.2%, compared to 20.0% for the same quarter in the previous year[81] Share Count and Earnings Per Share - Average number of common shares for diluted EPS calculation decreased to 550.4 million in Q4 fiscal 2025 from 570.4 million in Q4 fiscal 2024[51] - Diluted earnings per share (EPS) for the quarter was $0.74, down 27% from $1.01 in the prior year[71] - Adjusted net earnings attributable to General Mills for the fiscal year 2025 were $2,345.4 million, or 12.0% of net sales, down from 13.2% in 2024[76] - Adjusted operating profit for the quarter ended May 25, 2025, was $622.5 million, a decrease of 22% compared to $799.8 million for the same quarter in 2024[70]