General Mills, Inc. (NYSE:GIS) Q4 2023 Earnings Call Transcript

Page 4 of 12

The same could be true set of our foodservice business where we sold less flower and more of other things. So our pounds were down. So how is a little bit tricky because of mix, but in all I would expect that our – our sales certainly won’t — our pounds certainly won’t be as negative as they were in, they may be positive. We’ll wait and see. But I think it will be much more competitive on that front. But for sure, we’ll see some pricing because we still see inflation in the marketplace.

Kofi Bruce: Andrew, this is Kofi. The only other thing I would add is just given the comps, we would expect a little bit more weighting to the front half on the growth profile versus the back half.

Andrew Lazar: Got it. And then just a super quick follow-up just to the inventory piece, just to put a sort of point on that. With supply chain constraints easing, and obviously, is looking to get back to much more active merchandising and display activity and all of that. I guess I would have thought that retailer inventory reductions would be sort of counter to that dynamic, right, wanting to get out there collectively and collaboratively and get going on merchandising and really driving volume and whatnot. I guess what am I missing on that thought process? Is it just that retailers are so much more confident now that they can get what they need when they need it from you and others that the safety stock that was more aggressive, just isn’t needed?

Or because I would think if it’s the first time in a couple of years that you can get out and really drive the business, everyone would be, I don’t know, maybe it’s naive, but okay with a little more inventory just to make sure you have it on hand?

Jon Nudi: Yes, Andrew, this is Jon. I think it’s a fair question for sure. I’ve had a chance to check in with a couple of our major retailers then. Again, I think everyone is just trying to figure out the way forward. And I think for the immediate term, and if you think about some of our bigger retailers, not only carry food but the carry general merchandise, there’s been a big focus on just making sure they get inventories in check. And they feel like when they’re in check, they can then drive the business moving forward. So they — we’re definitely holding a bit more stock because until six months ago, we had supply disruptions throughout many of our categories when they feel felt like they could bring it down a bit. As we move forward, again, I think as we get the bottom line the volume moving and it really gets back to merchandising.

We would expect retailers to certainly support that and bring it in. And again, I just think it was a point in time and that’s something we’re reading into the future. And again, as I talk to these retailers, I don’t think that they plan to bring them down to the future. And to the extent we can drive the top line, they’ll continue to invest behind inventory as well.

Andrew Lazar: Great. Thanks so much.

Operator: Thank you. Our next question is from the line of Cody Ross with UBS. Please go ahead. Your line is now open.

Unidentified Analyst: Hi, this is [Brandon Cohen] filling in for Cody Ross. Thank you for taking the question. So you mentioned in the prepared remarks that with your current debt levels, you have more flexibility for M&A going forward. What categories are you targeting? And what are the main characteristics that you’re looking for in an acquisition target? Thank you.

Page 4 of 12