MINNNEAPOLIS — Third quarter financial performance finished below General Mills’ expectations, with the company’s North America Pet segment witnessing unexpected retailer inventory headwinds. The company shared this and more in its third quarter and nine-month financial performance released March 19. 

“Our third-quarter organic net sales finished below our expectations, driven largely by greater-than-expected retailer inventory headwinds and a slowdown in snacking categories,” said Jeff Harmening, chairman and chief executive officer of General Mills. “At the same time, we drove continued positive market share trends in pet, foodservice and international, as well as improvement in Pillsbury refrigerated dough and Totino’s hot snacks, two businesses where we made incremental investments last quarter and saw positive returns.”

For the third quarter ending Feb. 23, net sales for the company’s North America Pet segment remained flat at $623.7 million. Segment net sales represented 16.4% of General Mills’ total net sales, compared to 20.5% in 2024. Organic net sales for the segment dropped 5% driven by a reduction in retailer inventory. Operating profit was $102.2 million, a significant decrease of 20% from $128.3 million in the prior year period, which was attributed to a double-digit increase in media investment and higher input costs. 

Breaking this down further, General Mills revealed that net sales for wet pet food and pet treats increased mid-single digits, whereas those for dry pet food decreased by mid-single digits. Despite all this, the Blue Buffalo brand experienced pound share growth during the quarter, largely driven by its Life Protection Formula (LPF) dry dog food. 

“Our results on LPF have been driven by strong media investment and activations across key retail partners,” Harmening explained. “We also recently launched our biggest new product of the year — Life Protection Formula Salmon. Salmon is an on-trend protein variety geared toward pet parents who are increasingly seeking chicken-free options. This addition to our LPF portfolio has already received strong retail enthusiasm and early distribution wins.

“Our Wilderness line continues to show year-to-date improvement and is now posting retail sales growth across some of our key customers,” he added. “Successful innovation is a theme here, too, with our latest launch of Grain-Free varieties performing above our initial expectations and highly incremental to our core Wilderness offerings.”

Throughout the quarter, the company experienced retailer inventory headwinds, impacting its pet food performance. According to Harmening, the company experienced inventory challenges with its biggest retailers. 

“Pet inventory through the six years or so that we’ve owned this business has always been more volatile than the rest of our business,” he explained. “I suspect it will be a bit I think because of the e-commerce nature of the business. So, there’s a five-point drag on pet this quarter from retail inventory. A lot of that was dry pet food, which is why you saw the results in dry pet food, especially dry dog food, the way that you did.” 

According to General Mills, its acquisition of Whitebridge Pet Brands’ North American business in the third quarter of fiscal 2025 is expected to benefit the overall business. 

“We’re excited about adding the Whitebridge business to our pet portfolio this quarter,” Harmening shared. “The Tiki Cat brand continues to drive great momentum, with retail sales for wet cat food up 19% over the past 52 weeks.”

For the nine-month period ending Feb. 23, net sales for the segment were $1.8 billion, a 1% increase from $1.77 billion in the prior year. Segment net sales represented 20.1% of General Mills’ total net sales, an increase from 19.3% in 2024. Organic net sales matched those from the prior year. Operating profit was $360.9 million, a 6% increase from $342 million in the prior year period, which was attributed to HMM cost savings and higher volume and offset by unfavorable net price realization and mix, input cost inflation and increased media investment.

“While we’re proud of the improvements we’ve made to our pet business in recent quarters, we know there is still work to be done to get back to the level of growth we aspire to over the long term,” Harmening said. “We’ll look to continue building on our positive momentum in Q4, supported by another strong increase in media investment.”

Outside of North America, the company also remains optimistic about its Edgard & Cooper brand, which it acquired in the 2024 fiscal year. 

“We’re also encouraged by the strong momentum for our Edgard & Cooper European pet food business, which continued to post double-digit net sales growth, including benefits from their recently launched Cat Treats line,” Harmening revealed.

Third quarter net sales for General Mills overall were $4.84 billion, a 5% decrease compared to $5.09 billion in the third quarter of 2024, which the company attributed to lower pound volume. Organic net sales were also down 5%. Gross margin was up 40 basis points to represent 33.9% of total net sales, which was attributed to Holistic Margin Management (HMM) cost savings and offset by unput cost inflation and unfavorable net price realization and mix. Adjusted gross margin was down 60 basis points to represent 33.4% of total net sales.

Operating profit was $891.4 million, a 2% decrease compared to $910.7 million in 2024. Selling, general and administrative (SG&A) expenses rose to $844.40 million, a 4% increase compared to $790.9 million in the prior year period. Net earnings were reported at $626 million, a 7% decrease from the prior year period.

Nine-month net sales were $14.93 billion, a slight 1% decrease from $15.14 billion in the prior year period. Organic net sales were also down 1%. Gross margin was up 60 basis points to represent 35.2% of total net sales, which was attributed to HMM cost savings and offset by input cost inflation. Adjusted gross margin was up 30 basis points to represent 35.1% of total net sales. 

Operating profit was $2.8 billion, a 6% increase from $2.65 billion in the prior year period. SG&A expenses were $2.55 billion, a 4% increase from $2.46 billion in the prior year period. Net sales were $2 billion, a 3% increase from the prior year. 

In addition to its financial performance, General Mills also shared its outlook for financial 2025. To help overcome retailer inventory headwinds, slowdowns and softer consumer demand, General Mills plans to invest in consumer value, media support and in-store visibility in the fourth quarter. Additionally, the company is also planning new product launches. 

Operating net sales for the full-year fiscal 2025 are now expected to be down between 1.5% and 2%, compared to the previous expectation of flat to up 1%. Adjusted operating profit is expected to be down 7% to 8%, compared to the previous expectation of down 2% to 4%, reflecting lower net sales. The company highlighted that this guidance does not include any potential impacts from new tariff actions in 2025. 

Looking further to the future, General Mills remains committed to accelerating its organic sales growth through fiscal 2026. The company’s Holistic Margin Management (HMM) productivity program is expected to support this, delivering at least 5% savings in cost of goods sold, representing about $600 million in gross productivity savings. It is also reviewing several cost-savings efforts that aim to save at least $100 million in fiscal 2026. 

“We’re focused on improving our sales growth in fiscal 2026 by stepping up our investment in innovation, brand communication and value for consumers,” Harmening said. “We’ll fund that investment with another year of industry-leading HMM productivity, coupled with expected new cost-savings initiatives designed to further boost our efficiency and enable growth.”

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