Good morning and welcome to General Mills' third quarter fiscal 2025 earnings conference call. All participants are in a listen-only mode. After the speaker's remarks, we'll conduct a question-and-answer session. To ask a question at this time, you'll need to press star followed by the number one on your telephone keypad. As a reminder, this conference call is being recorded. I would now like to turn the call over to Jeff Siemon, Vice President of Investor Relations and Corporate Finance. Please go ahead. Thank you, Julianne, and good morning. Thanks to everyone for joining us today for our Q&A session on our third quarter fiscal 2025 results. I hope you all had time to review our press release, listen to our prepared remarks, and view our presentation materials, which were made available this morning on our Investor Relations website. Please note that in our Q&A session, we may make forward-looking statements that are based on management's current views and assumptions. Please refer to this morning's press release for factors that could impact forward-looking statements and for reconciliations of non-GAAP information, which may be discussed on today's call. I'm here with Jeff Harmening, our Chairman and CEO, and Kofi Bruce, our CFO. Let's go ahead and get to the first question. Julianne, can you please get us started? Absolutely. Just as a reminder to ask a question, please press star followed by the number one on your telephone keypad. Our first question comes from Andrew Lazar from Barclays. Please go ahead. Your line is open. Great. Thanks so much. Good morning, everybody. Good morning. Good morning. Jeff, you mentioned in the prepared remarks the sharp focus on accelerating organic growth as you move into fiscal 2026. You highlight the at least 5% savings, the additional $100 million in cost saves on top of this. I think I've said previously you plan to reinvest the 53rd week as well. I guess my question is, with the sizable step-up in investment planned for fiscal Q4, how do we think about the incremental investment that you think is needed for fiscal 2026 beyond what you're already doing in the fourth quarter this year? 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. Yeah, thank you, Andrew. Really, really fair question. Let me give you a couple of pieces of context and then answer your question more directly because I think the context is important. The first is that coming into this year, we thought the consumer environment would improve as the year got on. That has not really been the case. Consumers are still seeking value as much or more than they had when our fiscal year began. If you look at the most recent confidence indices, it would indicate that consumer confidence is actually below where it was three months ago and about where it was in 2008. The situation we find ourselves in is different than we thought the one coming into the year. Consumers are seeking value. We see that in the categories they are pursuing in many, many ways. The other thing I would tell you as we think about our investment going forward, we kind of looked at what's worked for us over the last year. When you look at Blue Buffalo, we were having a similar conversation a year ago, and we sharpened our price points. We got really focused on the things that mattered. We improved our marketing, our new products, and we've gotten to a place where we're competing effectively on Blue Buffalo. The same would be the case on Pillsbury. We talked about last quarter, what we needed to do. Yes, we sharpened our focus there on value, but also we have good new products there, and our marketing is really good. The focus on value actually allowed our marketing to work better. The same would be true of Totino's. Again, they got the value in line, and our marketing is really good on Totino's. As we look at those things or how we're competing with Häagen-Dazs globally, we know that getting the value in the right zone and that adding on top of that really good innovation and more improved marketing is the way to go. That's the context. As you look at our fiscal fourth quarter, obviously we're stepping up investment. We're investing some more in pricing, particularly in the fruit snacks area where consumers are really looking for value. That's very clear. Also, we're stepping up our marketing double digits. We're doing that on some of our biggest brands. We think our marketing is really good. You'll see that on Blue Buffalo. You'll see that on Pillsbury. You'll see that in cereal. As we look at next year, it'll be a year of reinvestment for us, and it'll be a combination of getting our value right. The place where you'll see that the most is in snacking, particularly fruit snacks. No need to wait until fiscal 2026. We started in the fourth quarter. The same with, that's where, as we look at pricing for next year. The other is that on pricing, we're lapping a lot of pricing we've done in the back half of this year into the first half of next year. In terms of kind of incremental activity we need to take on value, fruit snacks is the incremental value. Beyond that, we're going to improve our marketing on our core as we've done in some of the categories I've told you more broadly. We're going to increase our marketing spend, and we have some really good new products coming in the first half of next year. In fact, part of the investment we're making in the fourth quarter is the R&D resources to the admin necessary to get those products to market, as well as the supply chain. What we're looking at next year is to reinvest our savings, to reinvest in the 53rd week, as well as these efficiencies to get back to growth. That is the job to do. The rest of our P&L looks great, and it'll look even better once we get back to growth. My expectation is that our competitiveness will improve starting in the fourth quarter with the actions we've taken, and we'll look to carry that over into the first quarter, second quarter, third, and fourth of next year. Got it. Great. Thanks so much. I'll pass it on. Our next question comes from Ken Goldman from JPMorgan. Please go ahead. Your line is open. 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. I'm wondering if I'm missing anything here. 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 maybe, and you have those new cost efficiencies you talked about. 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. You have tariffs, stock-based comp, Yoplait dilution. I'm running through these very quickly, obviously, and 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. I really wanted to push a little bit on that if I could. Thank you. Ken, I think broadly you've actually got almost all the elements we'd want you to be tracking. I think Yoplait, obviously we don't know exactly when that's going to close. That'll be a significant, probably about five-point headwind that we want to make sure you have visibility to. We flagged that at CAGNY. It starts five-point headwind on profit. I think you've got kind of the texture of the rest of this. There'll be some annualization impact from the investments we've made this year that are important to factor in. We are building flexibility just in terms of our posture for next year for additional investment. We're very committed to getting the job done on improving growth trends both in the categories and our own competitiveness. To the extent that we go into next year, we want to make sure we have flexibility to do that. I think we'll obviously give you a little bit more perspective on where the commercial investments are going as we step into our Q4 and give guidance. I think you have the fence posts about right, though. Great. Thanks, Jeff It's fine. Our next question comes from David Palmer from Evercore ISI. Please go ahead. Your line is open. Thanks. 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 has 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 2026. I wonder if you could sort of characterize for us the level of innovation activity into 2026 and how it compared to how it will compare to 2025. Maybe you sound optimistic about it. What are the ways that you're changing the types of innovation, the messages that you think will work perhaps better per activity and marketing dollar next year? Yeah, David, good questions. I will give you as much context as I can without giving away exactly what we're going to be doing. First, you're right in that new product innovation kind of as a percentage of sales is still lagging where it was pre-pandemic. That's also true for us, although we are up significantly in our new product innovation as a percentage of sales this year than we were last year. So we are up, but still below where we were pre-pandemic. I hope that's clear. It's clear in my mind when I say it. I hope it's clear to those listening on the line. As we look at next year, I think there are two things that we need to do. The first is that the types of innovation we have, we probably need to support more robustly. We've had some good new product innovation like Cheerios Protein. We just talked about Pitmaster and what we've done with Old El Paso and soup. We've got stick bars coming in Asia and in Europe that are really good. Nature Valley Granola Protein is off to an amazing start. We need to, we've got some good new product innovation. I think we can probably do a better job even just supporting those a little bit more, which we intend to do. I think the theme for next year is probably going to be fewer, but bigger. We have a few big innovations that we'll talk about in June that I would love to talk about now, but we're not going to, that are going to come in the first half of next year in addition to kind of some of the things we already talked about. Fewer and bigger, I guess, would be, and then making sure we support well the good ideas that we have, and we have some good ideas. Thanks. I'll pass it on. Our next question comes from Michael Lavery from Piper Sandler. Please go ahead. Your line is open. Thank you. Good morning. Just looking at, you called out value and price gaps quite a bit, and obviously that's a focus. Looking at dough and Totino's, where you've 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 Q4. 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 endpoint of the question is, how do you know that as you've got your, it sounds like your 2026 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? Yeah. You mentioned, talked about cold, which were refrigerated dough and Totino's. You also add Blue Buffalo into that mix of things that we have executed well and opened some price points and also improved our marketing. That's the other piece of it, that getting the marketing right, whether that's new product innovation, marketing behind that, or marketing behind the core, which is also important. As we look at that, the value piece, we have the same price. We've got great brands. When we talk about that value piece, it really is kind of getting in the zone and price differentials and that sort of thing. It does not mean we have to price equally to everybody else. We just have to get into a zone in which our pricing is going to work. We have to consider all the other elements of our marketing mix. We use the remarkable experience framework to do that. We kind of go category by category to say, what are the things, where are we good, where are we missing elements. We go by that and we use that throughout the entire company. I am confident as we head into the fourth quarter and then into fiscal 2026, we have a much better handle category by category what jobs need to be done. In some cases, that is value. In some cases, that is marketing on the core. In some cases, that is innovation. Fruit snacks is probably all three of those things. That is the way we look at it. We have confidence because we have done it several times now with some big businesses, Blue Buffalo, Totino's, and Pillsbury. They're all billion-dollar plus brands. We've done it effectively there. We just need to make sure the job to do now is expand that to the rest of our portfolio, which we have been working on, which will start to manifest itself in Q4. In fact, I would expect our cereal business to come back in Q4. I would expect our soup business as well to show improvement in Q4 as we get the marketing in a good place and as the value is also in a good place. 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 maybe under review, so to speak? We have completed that across the company. That has led to some of the improvements that you've seen so far. Some things take longer than others. That is the work that has already begun. You'll see that in the fourth quarter and it will bleed into next year. You'll see that next year as well. I would also say it's an always-on kind of capability because context changes and the environment around us changes. One of the things, yes, I feel good that we kind of understand brand by brand what we need to do. I also know that the context changes and we have to be agile enough to change with the world around us. I also know that. That's helpful. Thank you. Our next question comes from Alexia Howard from Bernstein. Please go ahead. Your line is open. 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. They did not seem to be behaving in previous cycles with this value-seeking discretionary problem that we seem to have today. What is different this time around? 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 am just wondering what data you are looking at to really get at the root of what is driving the category weakness. Thank you, and I will pass it on. Yeah. Thanks, Alexia. Let me give you a couple of thoughts. As we look across kind of salty snacks, grain snacks, and fruit snacks kind of quarter on quarter, there's about a negative gap on the category between what was happening before and what is happening now. Our view is that a lot of that has to do with consumer confidence. I mean, yes, GLP-1 use is increasing. It's about 10% of the adult population now, about 5% or so used for weight loss, which is up significantly from the year before, but it didn't change that much quarter to quarter. We also seen the same kind of activity in dog treats. To my knowledge, there is not GLP-1s for dog treats. I do not think that, even though we take the GLP-1 kind of trend seriously, and as you see, we have a lot of protein coming in our new products and macronutrients and fiber are going to be important and portion size and lower sugar and all that. That is really not what we see in this environment. As to why we see the slowdown, you are right. In past recessions like in 2008, we did not see this. Our view would be that food at home is now elevated vis-à-vis what it was in 2008. It is elevated vis-à-vis what it was in pre-pandemic. Pre-pandemic, food at home consumption was about 83% of occasions. It is now 87% and has been 87% for a long time. What has changed is that in prior periods like we're experiencing now with consumer confidence, we had a lower percentage of people eating at home, and that increased as they got more anxious. That level has already increased. That really hasn't changed much. Our belief is that consumers have become much more value-conscious. That not only determines what happens in category, but also what happens in the rest of the store. If you look at the rest of the grocery store, you would see that things that are staples are the ones that are growing faster than things that are more discretionary. Staples like baking staples, for example, and some of the items on the perimeter, those are growing faster because they produce more value. The same would be true of why restaurant occasions are down slightly. We think it's much more about value now. That's the biggest difference is the eating occasions versus what we saw in the past recession. Thank you very much. I'll pass it on. Thanks. Our next question comes from Peter Galbo from Bank of America. Please go ahead. Your line is open. Hey, Jeff, good morning, guys. Good morning. Morning. Morning. Jeff, just a couple of 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 Mott's relative to Gushers. I think you had actually expanded Gushers' capacity about a year ago. Just wanted to clarify on that. 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. 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. Yeah. Let me start with fruit snacks a little bit. You're right. I mean, Gushers' capacity came back up in Q2, and we feel good about the trajectory of that business. When we look at the category, the fruit snacks category is down. Part of that is part of that discretionary, which we talked about. We haven't distinguished ourselves on the share front either. There are a couple of big players, a couple of our big retailers introduced private label during that period. There's no question that the job to do on fruit snacks is one of making sure our value is in the range, but also then getting back to innovation. We talked a little bit about Harry Potter fruit snacks and what we're doing there, as well as marketing on the core. I would liken what we have to do with fruit snacks a little bit to what we had to do with a couple of items on Blue Buffalo, where on Blue Buffalo a year ago, our pricing was good on Life Protection Formula, as it probably is on Gushers, but all we had to do is market it better. We started doing that, and that was the job to do. That was probably Gushers. When you come to some other items, it is probably like wet pet food and treats where we had to improve the marketing, which we did, and we had to improve the price points, which we did. It took a little bit longer, but we eventually got back to where we needed to go. That is kind of why I think that is the corollary to fruit snacks, if you would. On bars, bars was a tough quarter because we had a competitor who was off-shelf a year ago. I feel good about our bars business, some of the innovation we have coming on bars. We did not mention Cheerios Protein bars, I do not think, on this call, but it is coming up. We feel good about that. Nature Valley, the marketing is good on Nature Valley. Our bars business, I would look to rebound probably more quickly even than fruit snacks. Fundamentally, we are in a decent place on that. Thanks, Jeff. Just salty, anything there? Yeah. On salty snacks, there really probably is a value play, although salties are a relatively small part of our portfolio relative to fruit snacks and Nature Valley. I think on that one, value is certainly true. I would also say it's very clear that consumers are looking for bold flavors. Our ability to introduce some new products with some bolder flavors is also going to be part of our success in salty snacks. Great. Thanks very much. I'll pass it on. Our next question comes from John Baumgartner from Mizuho Securities. Please go ahead. Your line is open. 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 functional ingredients and functional innovation set against the broader focus on RFK and ingredients more broadly. How do you assess, Jeff, 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 has not always been as clear relative to being just sort of table stakes to remain competitive. Do you see anything changing on that front in terms of pricing power and premium mix at this point? Consumers, they're still going to value comes in a lot of different ways. Part of that is pricing, but obviously, the benefit part is also important. We see that playing out in proteins. We highlighted a lot of protein innovation we have coming now, whether that's Cheerios Protein or Progresso Protein, which is doing very well. You will see that. The key for us is really we're seeing a lot of value players, but we're seeing some things at the high end as well. It is kind of bifurcating. For us, value does not, as I mentioned earlier, I am going to repeat myself, but value does not mean getting a race to the bottom on pricing or getting to the same place to private label. It is just making sure we have the gaps correct. After a period of kind of record inflation for three years, those things can take a toll. It really is about getting the value right. Beyond that, it really is about talking about the benefits of our products. In some cases, that's functional benefits like protein. In other places, like Pillsbury biscuits, it's about how flaky they are. When it comes to Betty Crocker, maybe how chocolatey they are. It really depends brand by brand the benefits we're looking for. Yes, some functional health, but it's food. People really like stuff that tastes good. To the extent, like in Cheerios Protein, we can make it taste good and it has a functional benefit, that's an even bigger win. Okay. Thank you. Our next question comes from Chris Carey from Wells Fargo. Please go ahead. Your line is open. Hi everyone. 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 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 such to give us the ability to invest as we see fit, but the plans are still developing or something of the sort? That's just a kind of clarification. 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? 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 diagnoses? Is it value, the innovation agenda, the marketing messaging? I think we all think, oh, value is the key here. Invest in price and trade and that'll drive the improvement. When you assess the portfolio about why there's that relative underperformance, what are the buckets that are standing out the most to you? Thanks for those. Yeah. Let me take the second part of your question first, and then I'll pass it over to Kofi to take the first part of your question second. On the category growth, you make a really important point, which is that our categories are growing, and they're growing about 1%. That is below the kind of two to three we think will happen as we look into the future. The biggest delta, really the delta, is price mix. As we look at volumes, they're roughly in line with what we'd expect and what we could expect for 2-3% top-line growth, except that there's not a lot of, there's not much price mix in this environment, which given what we said about the consumer, I think kind of lines up. Our categories are growing. Because of that, the most important job we have to do is to get back to being competitive, which is what we will look to largely do in the fourth quarter. We have lots of areas that are competitive now. If I look at food service, if I look at Häagen-Dazs internationally, if I look at Blue Buffalo, or what we've done with Pillsbury, or Totino's, there are places where our market shares are increasingly good. The job for us to do is to get back to that more broadly, probably starting with volume share first. Ultimately, the ultimate arbiter is dollar share, but volume share first as we're getting our value realigned. That is the job to do. To get back to algorithm, then it takes a little bit of price mix on top of that, which we're not expecting in the near term, but which we're pretty confident will come back eventually. That is the most important thing that we need to do. I'll probably turn it over to Kofi to talk a little bit more about the reinvestment profile and what we're expecting there. Yeah. Just kind of picking up on where Jeff left off, I think to the extent that we see the path ahead next year really focused on driving improved growth and competitiveness, the purpose of the $100 million plus additional cost savings, the net above inflation, is to free up resources to reinvest for growth, right? The efficiency is there to drive growth. We're not trying to drive specific improvements in margin. Obviously, to the extent we have additional flexibility above that $100 million, you can expect our dial to be tilted probably towards reinvestment back into the business. We will talk more about specifically where and the nature of that investment in a little bit more detail, obviously, as we go into Q4 and give guidance for the next year. Kofi, let me come back to the second part of Chris's question, which I think I forgot the first time around. Being competitive is not only about price. I mean, we need to get the pricing back in the zone, but it is value holistically. As a CPG company, the recipe for success is relatively simple, even if it is difficult to execute, which is you need really good marketing on your core. You need good new product innovation, and you need the value to kind of be in the zone where your marketing can work. We know this has been true for decades. We have proven it again on the categories that I have talked about earlier, and we are going to start to prove it on some other areas as well. I think you will see that in cereal in the fourth quarter, where we have got good value, but we also have a double-digit increase in media. You will see it on soup, where we have good new products that we are going to market. Yes, we need to get the pricing roughly in line, but it is not only about that, and it cannot only be about that. We have got the best brands in our categories. It really is about marketing them effectively, which is marketing the core as well as new product innovation. We will look to dial up both as we look at the year ahead starting in Q4. Thanks, guys. Really helpful. You bet. Our next question comes from Leah Jordan from Goldman Sachs. Please go ahead. Your line is open. 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. With the mid-single-digit decline in U.S. retail in the quarter, just curious if you could 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. Yeah. As we look at the third quarter, let's see how deep we go on this. As we look at the third quarter in cereal, I mean, it was pretty close to what our expectations were in terms of what our reported net sales were. We knew we had a little bit of inventory built up from the second quarter. We talked about timing and that related to a few categories on our second quarter earnings call. Cereal was certainly one of those. Besides that, we did have a competitor who was off-shelf in the third quarter of the year, and we had a little bit less media and merchandising. Cereal, look, our cereal performance wasn't great in the third quarter, but it was about what we expected. The reason why I'm confident that it will get better in the fourth quarter is that we have an increase in media. We don't have the overhang from the inventory. Our merchandising is good. We've got a really good promotion in the fourth quarter. We have all the things lined up, kind of like we did in the second quarter. We had a pretty good second quarter on cereal. I think we'll have a good fourth quarter on cereal. The key to longer term is, honestly, giving consumers more of what they want. As we look at Cheerios Protein, clearly what they want, we've lost Ghost Cereal, which has done well. Our Nature Valley Granola Protein has also done well. It really is giving consumers more of what they want. All those things happen to be protein, but Lucky Charms are still magically delicious. People want that as well. Cinnamon Toast Crunch is still, in our view, the best-tasting cereal in the category, and people want that as well. The key to our growth, as it always has been, is giving consumers what they want. In some cases, that's functional benefits like protein. Other times, it's great taste. If we can get the two together, that's when we usually win the most. Our next question will come from Max Gumport from BNP Paribas. Please go ahead. Your line is open. Hey, thanks for the question. With regard to the unexpected portion of the retailer inventory headwinds in North America retail and 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? What is informing the view that there will not be any material changes in retailer inventory levels in the fourth quarter? Thanks very much. First of all, in PET, it was across some of our biggest retailers. PET inventory, through the six years or so that we've owned this business, has always been more volatile than the rest of our business. I suspect it will be because I think because of the e-commerce nature of the business. There was a five-point drag on PET this quarter from retail inventory. A lot of that was dry pet food, which is why you saw the results in dry pet food, especially dry dog food, the way that you did. Our inventory levels were not high before. They are even lower now. For the year, our inventory is about our retailer is about flat to where it was at the beginning of the year. That is what gives us the confidence that we will not have another drawdown in inventory in the rest of the year. As to whether that is an inventory trend, an industry trend, or just us, I will let everybody else talk about what their trends are. I just know what ours are. Okay. Julianne, I think we're going to, given that we have kind of hit past the time allocated here, I think we'll go ahead and wrap up. Thanks, everyone, for the attention and the time this morning. We're available all day for follow-ups as usual. I look forward to connecting here in the next few days, and we'll be back to discuss Q4 when we get to June. Thanks so much. This concludes today's conference call. Thank you for your participation. You may now disconnect.