Financial Performance - Q2 Fiscal Year 2026 - Net sales decreased by 7% to $4.861 billion, while organic net sales decreased by 1%[80] - Adjusted operating profit decreased by 20% to $848 million[80] - Adjusted diluted EPS decreased by 21% to $1.10[80] - Adjusted gross margin decreased from 36.3% to 34.8%[103] Segment Performance - Q2 Fiscal Year 2026 - North America Retail organic net sales decreased by 3%[87] - North America Pet organic net sales increased by 1%[89] - North America Foodservice organic net sales was flat[92] - International organic net sales increased by 4%[94] Fiscal Year 2026 Outlook - The company reaffirmed its fiscal year 2026 outlook, including organic net sales growth of -1% to +1%[10, 75] - Adjusted operating profit growth of -15% to -10%[75] - Adjusted diluted EPS growth of -15% to -10%[75]

Financial Data and Key Metrics Changes - Reported net sales for Q2 were $4.9 billion, down 7%, with a 6-point headwind from divestitures and acquisitions; organic net sales were down 1% [24] - Adjusted operating profit was $848 million, down 20% in constant currency, primarily due to lower volume and higher input costs [25] - Adjusted diluted earnings per share totaled $1.10, down 21% in constant currency [25] Business Line Data and Key Metrics Changes - North America Retail organic net sales were down 3%, driven by unfavorable price mix, but organic volume growth modestly outpaced Nielsen measured retail volume growth [26] - North America Pet segment net sales were up 11%, with organic net sales up 1%, driven by favorable price mix [27] - North America Foodservice organic net sales were flat, with growth in frozen baked goods and cereal offset by a decline in bakery flour [28] - International segment organic net sales were up 4%, driven by growth in Brazil, China, India, and North Asia [29] Market Data and Key Metrics Changes - In North America Retail, the company held or grew pound share in eight of its top 10 U.S. categories, with Nielsen measured pounds up 1% in Q2 [8][26] - The North America Pet segment saw mid-single-digit growth in cat feeding, while dog feeding results were mixed [16][27] - The international business held or grew dollar share in 54% of priority businesses, led by Häagen-Dazs and Nature Valley [29] Company Strategy and Development Direction - The company is focused on investing to strengthen brand remarkability to restore organic sales growth [3] - Key priorities include returning North America Retail to volume growth, accelerating North America Pet growth, and driving efficiencies to fund investments [5][6] - The Remarkable Experience Framework guides brand investment decisions, focusing on product, packaging, brand communications, omnichannel execution, and value [6][10] Management's Comments on Operating Environment and Future Outlook - Management noted a change in consumer behavior, with lower and middle-income consumers making more purchases on promotion due to economic pressures [9] - The company expects to drive further improvement in organic sales growth in the second half of fiscal 2026, reaffirming its fiscal guidance [4][33] - Management anticipates Q3 operating profit to be down more than previously expected, but expects strong profit growth in Q4 [33] Other Important Information - The adjusted gross margin was 34.8% of net sales, down 150 basis points due to higher input costs [30] - The adjusted effective tax rate was 23.3%, up from 20.1% a year ago, due to unfavorable earnings mix [31] - Capital investments in the first half totaled $253 million, with $659 million paid in dividends [32] Q&A Session Summary Question: What are the expectations for organic net sales in the second half? - The company expects improved organic net sales in the second half, driven by the expanded impact of remarkability investments [33] Question: How is the company addressing the challenges in the North America Retail segment? - The company is focused on returning North America Retail to volume growth by investing in remarkable experiences [5] Question: What are the plans for the North America Pet segment? - The company plans to strengthen the core Blue Buffalo business while driving growth through new product launches and expanded distribution [16][18]

Financial Data and Key Metrics Changes - The company expects profit results in Q1 to be significantly pressured by increased investment and the impact from the yogurt divestiture, with expectations of improvement in the back half of the year [9][60] - The profit performance in Q1 was better than expected, with gross margin benefiting from lighter inflation phasing and trade expense timing [57][58] Business Line Data and Key Metrics Changes - The company has strengthened its pound share in eight of its top ten categories and is holding pound share in the Pet segment [8][11] - New product volumes are up 25%, with strong performance expected in categories like baking and soup during key seasons [10][11] Market Data and Key Metrics Changes - The North America Retail category saw volume improvements in Q1, with the top ten categories performing slightly better than expected [91] - The company noted a shipment timing headwind in the Pet segment, impacting total company pounds in the quarter [29] Company Strategy and Development Direction - The company is focused on returning to profitable organic growth as the best way to create value for shareholders, with significant investments in innovation and new product launches [5][7] - The strategy includes adjusting base shelf prices and enhancing product offerings to meet consumer demand [47][48] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's approach, noting that while external factors impact the industry, many elements remain within the company's control [15][17] - The company anticipates continued pressure from inflation but expects to see improvements in the second half of the fiscal year [9][60] Other Important Information - The company is actively working on reformulating products to meet consumer preferences, including the removal of artificial dyes and other additives [74][78] - The company is leveraging technology for better demand planning and forecasting, which is expected to enhance marketing effectiveness [68][70] Q&A Session Summary Question: What is the outlook for volume growth? - Management expects volume growth to return by Q4, with current category volumes being flat but holding or gaining share in eight out of ten categories [22][23] Question: What are the trends in dog food and pet treats? - The core Pet business held pound share, with positive growth in Blue Life Protection Formula and Tiki Cat, while the Wilderness business needs improvement [32][34][36] Question: How is the company addressing pricing and competition? - The company is adjusting pricing strategies to remain competitive, particularly in the face of inflation and consumer demand for value [46][48] Question: What categories drove household penetration gains? - Household penetration improved in bars, fruit snacks, and cereals, driven by effective pricing adjustments and strong product innovation [64][66] Question: How is the company managing supply chain and demand planning? - The company is utilizing AI for better forecasting, allowing marketing teams to focus on demand generation rather than just forecasting [68][70] Question: What is the company's approach to reformulation and regulatory challenges? - The company is proactively reformulating products to align with consumer preferences and is confident in navigating regulatory changes [78][80]

Financial Performance - General Mills' Q1 Fiscal Year 2026 net sales reached $4518 million, a decrease of 7% compared to the previous year[82] - Organic net sales decreased by 3%[82] - Adjusted operating profit was $711 million, an 18% decrease[82] - Adjusted diluted EPS was $0.86, a 20% decrease[82] - The company reaffirms its full-year fiscal 2026 outlook, expecting organic net sales growth between -1% and +1%, adjusted operating profit growth between -15% and -10%, and adjusted diluted EPS growth between -15% and -10%[10, 77] Segment Performance - North America Retail organic net sales decreased by 5%[88] - North America Pet organic net sales decreased by 5%[91] - North America Foodservice organic net sales increased by 1%[93] - International organic net sales increased by 4%[95] Strategic Initiatives - The company is focused on restoring volume-driven organic sales growth[8, 116] - General Mills aims to return North America Retail to volume growth by investing in remarkable experiences to strengthen pound share and household penetration[20] - The company intends to accelerate N A Pet growth with an expanded portfolio, growing Core Blue Buffalo and driving category expansion opportunities[21, 22] - General Mills is driving efficiencies to reinvest in growth, delivering best-in-class HMM cost savings and executing a global transformation initiative[24]