General Mills Inc Q3 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Andrew Lazar - Barclays - Analyst : Great, thanks so much. Good morning, everybody.

Question: Andrew Lazar - Barclays - Analyst : Jeff, you mentioned in the prepared remarks the sharp focus, right, on accelerating organic growth as you move into fiscal '26. And you highlight, at least, 5% HMM savings, the additional $100 million in cost saves on top of this. And I think you've said previously you plan to reinvest the 53rd week as well. So I guess my question is, with the sizable step up in investment planned for fiscal 4Q, how do we think about the incremental investment that you think is needed for fiscal '26 beyond what you're already doing in the fourth quarter this year? And in thinking about those investments, I guess, what does the balance of spend look like or the mix between work that still needs to be done on price points specifically versus let's say innovation, in-store activity and media expense. Thanks so much.

Question: Andrew Lazar - Barclays - Analyst : Got it. Great. Thanks so much. I'll pass it on.

Question: Ken Goldman - JPMorgan - Analyst : Hi, thank you. Just to build on Andrew's question, I was hoping we could run through a quick, very broad exercise of kind of the tailwinds and headwinds into next year just on a general basis, not looking at any numbers. And I'm wondering if I'm missing anything here. So as I think about the tailwinds, you've talked about a little more trade, better marketing in general that should help volume. Innovation, your tone is great there. Maybe you have some easier laps from some of the trade destocks, obviously you have a little more HMM maybe and you have those new cost efficiencies you talked about. And then, as I think about the headwind side, excuse me, obviously a little more trade than what you initially expected, although you talked about some easier laps there, some investments in brand communication. Maybe a bit more slotting. Then, you have tariffs, stock-based comp, Yoplait dilution. I'm running through these very quickly, obviously, that I'm putting you on the spot, but is there anything obvious that I'm missing there? Because honestly, you talked about how your job is to get back to growth. It seems that those headwinds are a little stronger than the tailwinds, and that's kind of what we're hearing from the buy side today. So I really wanted to push a little bit on that if I could. Thank you. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 19, 2025 / 1:00PM, GIS.N - Q3 2025 General Mills Inc Earnings Call

Question: Ken Goldman - JPMorgan - Analyst : Great. Thanks, Kofi.

Question: David Palmer - Evercore ISI - Analyst : Thanks, and thanks for those comments on innovation. I wanted to follow up on that. I've seen some data that, in general, in the food space, there's been less innovation. The innovation in the category in general packaged food is not really recovered to pre-COVID levels. It's been slow to essentially ramp back up. You're certainly ramping up innovation heading into fiscal '26. I wonder if you could sort of characterize for us the level of innovation activity into '26 and how it will compare to '25? And maybe you sound optimistic about it, like what are the ways you're changing the types of innovation, the messages that you think will work perhaps better per activity and marketing dollar next year?

Question: David Palmer - Evercore ISI - Analyst : Thanks. I'll pass it on.

Question: Michael Lavery - Piper Sandler - Analyst : Thank you. Good morning. Just looking at -- you called that value and price gaps quite a bit and obviously that's a focus. Looking at Dough and Totino's where you kind of had the test cases already, it's maybe a little harder on Totino's to see how much it's coming through because it looks like it picked up kind of later in the quarter or into 4Q. But Dough had sales growth up I think around 4% with volumes up around 8%. I guess, maybe in those categories, how did you or do you understand or figure out what the right price adjustments are and then really, how does that translate more broadly? I guess the kind of end point, the question is how do you know that as you've got your -- sounds like your '26 plans are broadly set. How do you know the price investments you're anticipating are enough and how do you think about -- just, you said maybe you can be nimble there. Is that part of how you plan for it as well?

Question: Michael Lavery - Piper Sandler - Analyst : That's great color. Would it be fair to assume that that evaluation exercise that you talked about, have you completed that across the company or is there still some brands or categories that maybe under review, so to speak? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 19, 2025 / 1:00PM, GIS.N - Q3 2025 General Mills Inc Earnings Call

Question: Michael Lavery - Piper Sandler - Analyst : That's helpful.

Question: Alexia Howard - Bernstein - Analyst : Good morning, everyone. Can I start with -- come back to snacks. As I think about previous economic slowdowns like the financial crisis and so on, snacks seem to do okay as a sort of feel-good treat at a low-ticket price. And they didn't seem to be behaving in previous cycles with this value-seeking discretionary problem that we seem to have today. So what's different this time around? And could this accelerated uptake of GLP-1 drugs, for example, or increasing consumer concerns about the healthiness of indulgent snacks be another part of the issue here? I'm just wondering what data you're looking at to really get at the root of what's driving the category weakness. Thank you, and I'll pass it on.

Question: Alexia Howard - Bernstein - Analyst : Thank you very much. I'll pass it on.

Question: Peter Galbo - Bank of America - Analyst : Hey, Jeff, Kofi, good morning, guys.

Question: Peter Galbo - Bank of America - Analyst : Jeff, just a couple questions, if we can dig in a little bit more on the snacks business. The first would just be around fruit snacks. I'm assuming when you're talking about kind of the value piece of it, you're talking more moths relative to gushers. I think you had like actually expanded gusher's capacity about a year ago. So just wanted to clarify on that. And then the second piece is just if you can expand a bit more on the remediation plans. I guess, in snack bars, you have a competitor who was off shelf and is now back on shelf. And maybe salty as well, just maybe in the same level of detail that you provided around fruit snacks would be super helpful. Thanks very much.

Question: Peter Galbo - Bank of America - Analyst : Thanks, Jeff. And just salty, if anything there?

Question: Peter Galbo - Bank of America - Analyst : Great. Thanks very much. I'll pass it up.

Question: John Baumgartner - Mizuho Securities - Analyst : Good morning. Thanks for the question. I just wanted to come back to the consumer and this interaction between value-seeking and Mills' mention of a functional ingredients and functional innovation set against the broader focus on RFK and ingredients more broadly. How do you assess the willingness and ability for consumers to pay up for healthier ingredients and better quality? I think in the past, the ability to extract premium pricing for premium ingredients, that capacity hasn't always been as clear relative to being just sort of table safe to remain competitive. Do you see them changing on that front in terms of pricing power and premium mix at this point? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 19, 2025 / 1:00PM, GIS.N - Q3 2025 General Mills Inc Earnings Call

Question: John Baumgartner - Mizuho Securities - Analyst : Okay. Thank you.

Question: Chris Carey - Wells Fargo - Analyst : Hi, everyone. So one slight clarification and then a bigger picture question. Just on the clarification, with the savings targets for next year, is there a message today that the savings targets between HMM and the incremental $100 million are there to be fully reinvested back into the business? Or is the message today simply we're putting forth strong savings just to give us the ability to invest as we see fit, but the plans are still developing or something of the sort? So that's just a kind of clarification. And then the bigger picture question is, if I look at your category growth rates, the categories in which you compete, they're actually growing, which is really positive, right, because that means if you can close category gaps, you're back to growth. When you assess why your portfolio is not growing in line with category, what are the major diagnosis? Is it value, the innovation agenda, the marketing messaging? Because I think, we all think, oh, value is the key here. Invest in price and trade and that'll drive the improvement. But when you set the portfolio about why there's that relative amount of performance, what are the buckets that are standing out the most to you? So thanks for those.

Question: Chris Carey - Wells Fargo - Analyst : Thanks guys. Really helpful.

Question: Leah Jordan - Goldman Sachs - Analyst : Good morning. Thank you for taking my question. I just wanted to go back to Cereal. I know that's been a big area of concern for investors recently, and with the mid-single digit decline in US retail in the quarter. Just curious if you provide more detail on that, how it compared to your internal expectations. And then going back to what gives you the confidence to driving the improvement in the fourth quarter. And really just how are you thinking about the durability of the category longer term. Thank you.

Question: Max Gumport - BNP Paribas - Analyst : Hey. Thanks for the question. With regard to the unexpected portion of the retailer inventory headwinds in North America retail in pet, can you provide a bit more color on what drove it? Is this an industry-wide phenomenon or is it specific to some of the categories you compete in or your product specifically? And then what's informing the view that there won't be any material changes in retailer inventory levels in the fourth quarter. Thanks very much.