BOSTON — After a tough fiscal 2024, General Mills, Inc. expects to return to a growth path amid a steadier operating environment and heightened brand investment to boost its competitiveness.

At the Barclays Global Consumer Staples Conference in Boston, General Mills reaffirmed its fiscal 2025 financial guidance, and top executives expressed confidence in achieving the Minneapolis-based food giant’s long-term target of 2% to 3% top-line growth.

“What gives me confidence we can do that is, if you look before the pandemic, our categories were growing in the 2% to 3% range, and we have regained momentum in most of our categories,” Jeffrey Harmening, chairman and chief executive officer, said in a fireside chat at the Barclays event on Sept. 5.

“So, they’re actually back to growth,” he said. “In fact, the (General Mills) North America Retail categories are at about the 1% growth range. So, they’re back to about where they were before the pandemic. And we certainly believe that we are approaching a space where the category growth is what it was before the pandemic.”

General Mills projects fiscal 2025 organic net sales to range between flat and up 1%, with adjusted operating profit down 2% to flat in constant currency. Adjusted earnings per diluted share are forecast at down 1% to up 1% in constant currency.

“We’re confident that we can at least hold our share in our current categories, because we’ve done it like five out of the last six years,” Harmening said. “By the way, we exceeded the 2% to 3% (top-line growth target) over the last three- and five-year periods. Importantly during that period, and even before the pandemic, we were holding or gaining share in at least 50% of our categories.”

Progress in fiscal 2025

General Mills is scheduled to report 2025 first-quarter results on Sept. 18. For the 2024 fiscal year ended May 26, net earnings declined 4% to $2.5 billion, equal to $4.34 per share on the common stock, from $2.59 billion, or $4.36 per share, in fiscal 2023. Adjusted net EPS was $4.52 per share versus $4.30 in the previous year. Net sales dipped 1% to $19.86 billion. Operating income was flat at $3.43 billion.

The core North America Retail business tallied fiscal 2024 net sales of $12.47 billion, down 1% from a year ago. Net sales fell by low single digits for the US Meals & Baking Solutions, US Snacks and US Morning Foods operating units but grew by mid-single digits in Canada.

Dana McNabb, group vice president for North America Retail, said General Mills is “seeing progress” so far in fiscal 2025.

“We’re really encouraged by the gradual improvement that we’re seeing in pounds (unit volume),” McNabb said. “If you look at our categories over the last three months, what we’re seeing for the period ending August is that pounds are up in our categories (by) 1%. That is an improvement of over 3.5 points versus this time last year and an improvement versus last quarter. It’s pretty much back to historical levels.

“And there are a lot of reasons for that. We’re through some of those big comps now, the pricing, the pantry destocking, the SNAP benefits (reduction). We’re also seeing a bit of an uptick in in-home food consumption, from about 86% to 87%. When you think about the fact that eating away from home is four times more expensive, that’s a little bit more than inflation. So when we look at the macro benefits, we believe that we will continue to see a gradual improvement in pounds.”

Harmening and McNabb pointed to General Mills’ roster of billion-dollar brands — including Cheerios, Betty Crocker, Pillsbury, Nature Valley, Old El Paso, Häagen-Daz, Yoplait, Blue Buffalo and, most recently, Totino’s — and stepped-up marketing investment as the main source of their optimism.

“First, we have leading brands in our categories; we have 9 billion-dollar brands,” Harmening said. “Second, we’ve invested quite a bit in marketing through this latest period. Our marketing spend is up about 43% over the last five years. We’ve invested in capabilities to drive growth, not only in strategic revenue management but also in media and evaluating media and online media.”

He added, “We spent a lot of time over the last four or five years working through product supply chain disruptions, inflation, pricing and all the rest. Now we’re back to a period where how you market really counts.”

Though small brands and private label have picked up market share by getting on-shelf availability back to pre-pandemic levels “earlier than we expected,” McNabb said, “there is no question that our (North American Retail) business is bigger and more profitable than it was pre-pandemic.”

Progress in pet

The priority for General Mills across all its “billion-dollar brands” is a return to profitability and this includes its pet food and treat category, led by its flagship Blue Buffalo brand.

“Getting Blue Buffalo back to growth is certainly a top priority for us and I’m encouraged by what I’m seeing in Blue Buffalo … and know that we have a lot more work to do,” Harmening said. “As we were sitting here a year ago our top line was struggling and our margins had eroded and what I’m proud of over the last year, although our top line was not as successful as we wanted it to be, we were able to restore our margins to the business and that gives us confidence to reinvest back into the growth of Blue Buffalo.”

“What we’re seeing now is a business that’s more profitable than it was a year ago and actually we’re starting to bend the trend on top-line growth,” Harmening added.

The company is leaning into advertising to support and promote its brands including its Life Protection Formula product line, which began a new advertising campaign nine months ago.

“We are starting to get traction,” Harmening said. “We are starting to gain market share in dry dog food.”

Its Wilderness product line continues to struggle; however, losses have been cut in half over the past year. The company also reports it is gaining share in dry cat food, thanks in part to its advertising campaigns for its Tastefuls line. Wet dog food is starting to gain market share, while the treats side of the business still has room to grow after another flat quarter, Harmening shared.

Despite the challenges, the company remains optimistic about a return to growth in the category.

“I feel like we are on a good path with the things that we have put in place — we have diagnosed the problems well. We are putting in solutions and those solutions, by in large, are working,” Harmening explained. “We’ve seen gradual improvement in the top line in our pet business and we’re looking to capitalize on the momentum of that business so at the end of the year we can say we have bent the curve on growth, and we are actually growing our pet food business.”

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