General Mills, Inc. Barclays 19th Annual Global Consumer Conference

Okay, everybody. If we could just find our seats, we'll kick off our next fireside. Welcome back, everybody. Thanks for joining us, and thank you to General Mills for joining us once again on our conference stage. From the company, we've got Chairman and CEO Jeff Harmening, along with COO Dana McNabb. Jeff and Dana are going to kick it off just with some opening remarks, and then we'll get right into the Q&A. Thanks again. Andrew, over to you.

All right. Thanks, Andrew, and we'll keep it brief. We just wanted to provide a couple opening points of context and we'll do the Q&A, but we thought we'd talk mostly about building on our foundation of fiscal 2026, and then how we're going to continue and improve our organic growth in 2027 and then beyond. We did issue a press release this morning reiterating our guidance for the year. What I would say about that is, let's just some additional context, we're really encouraged by the first quarter and the momentum we have in the first quarter of this year, especially on the top line. It has been pointed out to us that inflation has been increasing throughout the first quarter.

What I would say is that for, as a reminder, we guided a 4%-5% inflation at the beginning of the fiscal year for us back in June. We're largely covered, and so even if our inflation at this point, we would still see it between 4% and 5%, even if it's tipping to the higher end of that range, it's still within that range. When we reiterated guidances with that in mind, I'm sure we'll get into the drivers of that probably later on. The other thing is, I would say we started the year with three priorities. The first is to strengthen our organic growth, the second is to accelerate our transformation, and the third is remain disciplined on our capital allocation. I'm really pleased to say that we're well on track as we end Q1 here on each of those three priorities.

Of course, there's always more work to do on all those fronts, but as it stands right now, we felt confident enough in what we've seen so far in Q1 to reiterate our guidance, and I can tell you that we're largely on track. With that, I'll turn it over to Dana.

All right. Well, thank you, Jeff. Good afternoon, everyone. What I thought I would do is just give you some context for what we did to improve the foundation of our business in FY 2026, and then what we are going to do to accelerate growth in FY 2027 and beyond. I think every person in this room is aware, painfully aware, of the challenges the food industry has faced the last couple of years. If you think about a stressed consumer, changing food values, increases in GLP-1, inflation, geopolitical, you name it, we have faced it. What we want everyone to understand is that in the face of all these challenges, General Mills is not standing still. We are making significant changes to address the changing food landscape and to make sure that we are serving consumers.

As you think about, you are all aware what we did in FY 2026, where we invested in price in order to improve consumer value. We have also accelerated the pace of our innovation and renovation, and we have taken moves to improve our cost structure. What I will tell you is that it is working. Now, we are not declaring victory. We are still in early innings, but what we believe is the moves that we have taken are the right ones. We are seeing the strategy play out the way that we expected. We are addressing the cost structure in a way that will allow us to meet our financial commitments in face of all this volatility, and that includes our capital allocation priorities and includes the dividend. So we believe that we are on the right track, and we really took some actions to try to get there.

I want to give you some context for why we have confidence. The first is that we took decisive action to fix our base prices and get under key cliffs and fix gaps relative to the competition, and we are seeing improved results from that. We used the Remarkability Experience Framework as our guide. We saw that gaps to the competition and cliffs were our biggest issue. We made the bold decision to invest, and we were the first food manufacturer to do that. As we exited our fiscal 2026, our business is in a better place. We have seen household penetration get back to growth. We have seen stabilized base volume, and we saw that we grew pound share in the majority of our categories. So we are in a better place. The second action we took was really accelerated the pace of innovation and renovation.

What we saw when we looked at Remarkability Experience Framework again is that we simply were not remarkable. Our products were just not good enough relative to the competition. We had to invest to get back to what the consumer values, give them benefits that they were willing to pay for. We did not just sprinkle protein on everything. What we have done is we said, "What does the consumer really value? Where is the growth going?" Bold flavors, humanized pet trends, clean label, and yes, some fiber and some protein. When you look at fiscal 2027 with that base price investment behind us, we are now focused on accelerating the innovation and renovation, and over two years, our innovation will be up 50% on big items like Honey Nut Cheerios Protein or renovation on our Häagen-Dazs Belgian chocolate ice cream brand.

We're going to bring big renovation on Blue Buffalo, something we haven't done in a long time. We're even launching emerging brands. Think La Tiara, which is more authentic taco shells and sauces, or bringing Wanchai Ferry frozen snacks into the U.S. So we're making progress on this front. We're not saying it's perfect, but we're making progress. Then we're also improving our operating profit and getting back to sustainable, profitable growth. That's when we announced $3 billion in transformation, $2 billion of which is our HMM and $1 billion is significant transformation efforts that are focused on one of the big areas, reimagining our supply chain. That entire effort is about improving our margins, reducing our leverage, accelerating our cash flow, and really giving us more strategic flexibility.

I took a little more than 3 minutes, but I just want to be clear that what I hope you hear at the end of this session is that while we are not satisfied with how we performed financially the last 2 years, we have made significant changes, we are seeing improvement in our results, and I really like the playbook that we're executing against, and I think we will get back to sustainable, profitable growth.

Good. Great. Thank you both for that.

Maybe we start the Q&A with a question for you, Jeff.

Okay. Dana mentioned this a bit, but let's zoom out and consider the significant change we've seen in the food industry over the past 10 years.

Having seen multiple cycles during your career, which you started at 14, so I'm I did.