General Mills FY 3Q17 Earnings Call Notes

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Ken Powell – Chairman & CEO

Thoughts on weakness of Nielsen data

“So as we — you know, we’re obviously seeing the same trends for the industry. If you look at kind of where the food and beverage industry is now versus a year ago, there is about a four point difference from where it was than to where it is now; so sales were up about 1.5 this quarter a year ago and now it’s down to — about half of that is due to pricing; and so we’ve seen deflationary pricing across food and beverage over the past quarter and so as we think about that 4 point gap, half of that is pricing and so the unit volume really is about 2 points and there is really not one factor that impacts it. Although there are — certainly there is movement for the perimeter over the store and there is even more deflation in categories like meat and dairy; but also you see significant growth and increasing growth in channels that aren’t measured by Nielsen and e-commerce is certainly one of those which is growing at between 35% and 50% this year and is probably upto 1.5% of total food and beverage sales. And so without doubt there is increased growth and channels as not measured by Nielsen.”

Don Mulligan

Expect a more modest inflation outlook

“we have every expectation of seeing significant margin expansion, particularly given the fact that we see a bit more modest inflation outlook versus what we saw a year ago in the fourth quarter and last year’s fourth quarter we saw some significant margin contraction.”