Jeff Harmening: Yes, Ken, this is Jeff. Let me start off with kind of how I see this broadly and then maybe Jon and Nudi can provide some commentary specifically. But — and look, I respect the fact that the factory inventory decline was a surprise given our strong deals and trends, and we feel great about our movement trends. And we did have a five point headwind in this quarter, and we didn’t see that coming when in the quarter began. So that is true. What I’m pleased with is actually we were able to hit our guidance on profitability and exceed margins and EPS despite the fact that we had this big headwind. We don’t see this as a General Mills-specific trend, and we don’t see this as something going forward. It truly is a couple of big customers were trying to get their inventories back to a good place and which I understand, the carrying cost of inventory is higher, interest rates are up.
They’re trying to work their balance sheets. And so in retrospect, perhaps it shouldn’t have been a surprise, but it certainly was an order of magnitude. I don’t see it as a red flag for us. And I’m not – I don’t see it actually as a red flag for the industry as well. But I want you to know from my chair, is something that’s kind of behind us and it’s not General Mills specific. But Jon, if you have any specifics you want to add?
Jon Nudi: Yes, absolutely, Ken. So as I mentioned, we did see a five point gap between the Nielsen movement and quarter. For the year, that was a two point gap. And it’s not something that’s new. We’ve seen this phenomenon for six of the last eight quarters. So as Jeff mentioned, retailers are focused on inventory. One of the things that we feel more confident about is being able to supply the business after all the supply disruptions in the last few years, then feel like they don’t have to carry as much safety stock. In addition to that, obviously, the inventory is more expensive. So working capital is a focus as well. As we look at the absolute levels of inventory, there are some of the lowest levels we’ve seen on record. So again, we don’t believe that we can go much lower.
What we can focus on are the controllables. So that’s making sure that we have good marketing and driver baselines and our merchandising, and we feel great about that. We feel really good about the movement of 10% in Q4. So again, we feel like this was a onetime headwind. We’re not expecting to rebuild those inventories. But at the same time, we don’t expect another leg down in fiscal ’24.
Ken Goldman: And if I can just ask a very quick follow-up for Jeff, the Pet business, had a little bit of a down during this past year. I mean a lot of which is sort of out of your control in terms of supply. Is it reasonable to expect that we’ll see an acceleration in your organic growth this year? Or is it still going to be held back for most of the year by some of the supply issues that you have that are, of course, temporary?
