Consumer Staples

General Mills CFO Says Do Not Expect The Operating Profit Margins To Improve This Year。

General Mills Reaffirms FY24 Sales Growth Of 3% – 4%; Adj EPS Growth Of 4% – 6%.

General Mills’ pet-food business was an unexpected bright spot in the food maker’s otherwise dark fiscal 4Q, rebounding from several tough quarters before that, but fiscal 1Q has put the unit back in the dog house. The segment delivered flat sales as a 5% increase from pricing and mix was offset by a 5% drop in volumes. Sales of dry pet food were up in the mid-single digits, but roughly flat for wet food and down double-digits for pet treats. The segment’s operating profit was down 10% at $111M, primarily due to lower volume, higher input costs and higher overhead expenses.

General Mills says flat pet food sales in the most recent quarter reflect pet owners who are increasingly uncertain about their economic outlook. Some pet owners are shifting to more value-oriented products and channels and smaller pack-sizes. They are also spending more time away from home, pressuring sales of pet treats and wet food. General Mills says it is adapting its plans on pet food in response, including shifting its advertising to highlight the superiority of its ingredients and making sure it has the right sizes and prices in place. The company says it expects its pet business to remain challenged throughout FY24, though it is confident in growth opportunities for the business for the longterm.