GENERAL MILLS INC Q2 FY2025 earnings call

• Top priority is to accelerate organic net sales growth by delivering remarkable consumer experiences across leading food brands. - Created fuel for investment by generating strong levels of HMM cost savings to offset inflation and reinvest back into brands. - Continued to drive strong cash generation while maintaining disciplined capital allocation. - In North America Retail, strengthened competitiveness with pound and dollar trends improving in seven of top ten U.S. categories; took actions to improve refrigerated dough including adding value, stepping up taste renovation, launching new varieties, and increasing media support. - In North America Pet, restored business to growth with sequential market share improvement, high-single digit growth on Life Protection Formula dry dog food, reduced declines on Wilderness dry dog food, adjusted price points on wet food, and seeing green shoots in treats portfolio; proposed acquisition of Whitebridge Pet Brands' North American premium cat feeding and pet treating business. - In North America Foodservice, continued to deliver strong market share growth across segment, with net sales up 8% in Q2 driven by mid-single digit increase in organic pound volume and positive price/mix. - In International, made progress on global platforms but faced headwinds in China; drove sequential improvement in market share on Häagen-Dazs in retail outlets.

North America Retail: Q2 organic net sales were up 1%. Constant-currency segment operating profit essentially matched year-ago results, driven by HMM cost savings and favorable price/mix, offset by input cost inflation, higher other supply chain costs, and lower volume. North America Pet: Q2 organic net sales were up 5%. Segment operating profit was up 36% in constant currency, driven by HMM cost savings, higher volume, and lower other supply chain costs, partially offset by unfavorable price/mix and higher SG&A expenses. North America Foodservice: Q2 organic net sales were up 8%. Segment operating profit was up 24% in constant currency, driven by favorable price/mix. International: Q2 organic net sales were down 3%. Segment operating profit totaled $24 million compared to $35 million a year ago, driven by unfavorable price/mix and higher SG&A expenses, partially offset by HMM cost savings.

• Reaffirmed organic net sales guidance, current expectations toward lower end of range. - Adjusted operating profit and adjusted diluted EPS growth expected to be 2 points below prior ranges due to incremental investments. - Expect to deliver free cash flow conversion in line with previous expectation of at least 95% of adjusted after-tax earnings. - Outlook does not include impact of North American Yogurt divestitures nor Whitebridge Pet Brands acquisition as those transactions have yet to close.

• Challenging consumer trends in China continuing to present a headwind in that market. - Refrigerated Dough offering biggest opportunity for improvement with need to get back on track. - Treats portfolio in North America Pet still has most work to do. - Input cost inflation and unfavorable price/mix posing challenges.