USA- In fiscal year 2023, which ended May 28, pet product net sales for General Mills increased 9% to US$2.5 billion, according to the most recent financial data reported on June 29, covering the current quarter and all of the fiscal year 2023.
Additionally, the net sales increased 7% to US$655 million for General Mills’ pet foods, treats, and other pet segment products in quarter four of the fiscal year.
Dry pet food net sales increased by double digits while pet treat sales rose by high single digits. However, wet pet food net sales declined by high-single digits.
In addition, General Mill’s pet segment operating profit increased by 18% to US$133 million for the quarter.
“As we communicated over the past two quarters, our key pet food platforms are in different phases of recovery from our earlier capacity and service challenges,” said Jeff Harmening, chairman, and chief executive officer of General Mills, in the company’s fourth-quarter earnings call on June 28.
This growth was driven primarily by favorable net price realization and mix and cost savings, partially offset by input cost inflation, higher SG&A expenses, including a double-digit increase in media investment, and higher other costs of goods sold.
Net sales were up double digits for dry pet food and pet treats and were flat for wet pet food.
For the year, segment operating profit was down 5% to US$446 million, driven primarily by higher input costs, higher SG&A expenses, and lower volume, partially offset by favorable net price realization and mix.
Overall, General Mills expects the most significant factors impacting its performance in fiscal 2024 will be the economic health of consumers, the moderating rate of input cost inflation, and the increasing stability of the supply chain environment.
“As we look ahead, we expect to drive pet operating profit growth a bit faster than organic net sales growth in fiscal 2024, supported by improved volume performance, lower disruption-related supply chain costs, and benefits from our SRM capability,” Harmening added.
In response to why there is a drop in the performance of the company’s wet pet food during the earnings call, Harmening acknowledged that there are lots of trends going on at the same time but commented that a trend towards humanization was driving growth in its dry pet food business.
“Importantly, there’s still a trend toward humanization, which is why I think you see our dry pet food recovering so nicely and why you see our treats business recovering. At the same time, there is — people are more mobile. And so, the treats segment is down a little bit, and the wet segment is down a little bit because consumers are not home as much,” Harmening remarked.