General Mills Inc

NYSE:GIS

Good morning. My name is Audra and I will be your conference operator today. At this time, I would like to welcome everyone to the General Mills Third Quarter and Fiscal Year 2024 Earnings Call. Today's conference is being recorded. [Operator Instructions] At this time, I would like to turn the conference over to Jeff Siemon, Vice President of Investor Relations and Treasurer. Please go ahead.

Thank you, Audra and good morning to everyone. Thank you for joining us this morning for our Q&A session on our third quarter fiscal 2024 results. I hope everyone had time to review the press release, listen to our prepared remarks and view our presentation materials, which we made available this morning on our Investor Relations website.

It's important to note that in our Q&A session, we may make forward-looking statements that are based on management's current views and assumptions. Please refer to this morning's press release for factors that could impact forward-looking statements and for reconciliations of non-GAAP information, which may be discussed on today's call. I'm here this morning with Jeff Harmening, our Chairman and CEO; and Kofi Bruce, our CFO.

Let's go ahead and get right to the first question. So Audra, if you can get us started, please.

[Operator Instructions] We'll go first to Andrew Lazar at Barclays.

Jeff, in the prepared remarks, you mentioned the expected impact in the fourth quarter in terms of reported results from the lapping of the trade expense benefit last year. If we put that aside, which sort of seems like more mechanical, how do we think about momentum for the company in the fourth quarter in terms of what you'd expect in terms of in-market performance and consumption, right, as the company looks to really build momentum going into fiscal '25. Would you expect sort of an acceleration from what we saw in fiscal 3Q or something similar to 4Q.

Yes. And I would agree with you, the timing of the trade phasing is more mechanical in nature. So I think you're right about that. More broadly, what I would say is, I mean, we're encouraged by the third quarter results and the improvement that we saw in underlying performance, particularly the level of competitiveness in North America retail and the improvement we saw in Pet. And as we said -- as I said, kind of going into the quarter, in the back half of the year, we thought there'd be 3 external factors, which would play a role in our performance.

The first was lapping of pricing of last year. We thought we'd see a benefit from doing that and we're seeing that benefit in the third quarter. The second is that lapping the reduction in SNAP benefits from a year ago, which we said we'd probably start to see in March and April and there's a little bit of evidence to suggest that we're starting to lap that and see a little bit of benefit. And then the third would be lapping on-shelf availability. And so those are the 3 factors. We've seen the first play out a little bit in our third quarter results. So we are encouraged.

I would say is that outside of the trade phasing kind of mechanical issue you referenced, I mean, we're assuming that our fourth quarter in terms of sales would look about like the third quarter in terms of year-over-year performance. And it's hard to say exactly because we have inventory movements and things like that. But our expectation would be that it would look pretty similar to the third quarter. And -- but I would also say that there are a lot of moving pieces, right, in the fourth quarter and we'll just have to see how those moving pieces play out in terms of the external environment.

Got it. Got it. And then obviously, Pet was a significant source of upside to organic sales versus at least sort of street expectations. What really drove the outperformance? And I guess more importantly, do you see this as sustainable. I didn't know if you had like an all-channel consumption number for Pet this quarter and whether you see that sort of continuing to improve sequentially from here? Or should we not get ahead of ourselves based on what we saw in 3Q?

Yes. Well, the third quarter Pet results were pretty good. I mean, which is to say that they're better than maybe even we expected. The movement was a little bit better and paced by Life Protection Formula, which was up but also [indiscernible] dry business, which also showed improvement as well, as well as an improvement in our wet business. We still have a lot of work to do in pet and we know that. And particularly with regard to Wilderness and specific channels, the -- what I feel good about the third quarter is what it shows that the areas we've put emphasis on, we've seen growth in and certainly improvement, which tells us that Blue Buffalo equity is good and that we're working on the right things.

And on Wilderness, we kind of know what the -- we know what the challenges are and we know what to do to get it back on track but it's not going to take a month or two to get that back where you want. It's going to take a couple of quarters. So I'm not going to get ahead of myself. I don't think it's time to declare a victory on pet, even if we're encouraged that the things that we have done, have seen them work the way we wanted to. I would note the other thing on pet is that we drove some good profitability increases in the quarter.

Our productivity levels are quite high in pet. And we had a lot of disruption costs during the pandemic that we've had to get out. And we're in the process of doing that and you see that in the results in the third quarter. And so we're really pleased by that. We're kind of getting our feet under us from an executional standpoint. So while I'm encouraged by the third quarter, I think it's probably a little bit early to say kind of what's going to happen from here on out but we do see some green shoots in pet.

We'll move next to Ken Goldman at JPMorgan.

With the understanding, it's too soon to quantify or really even discuss next fiscal year, I just wanted to clarify something at first and that's, at CAGNY, I believe you said you were hoping for a year, even though it's too early, that was relatively benign. And with the understanding, again, no numbers at this time, I assume, what does relatively benign mean in the context of your longer-term algo? And I'm asking because you have easy comparisons in pet, you're hopefully still performing well in market. You said previously, you'll have HMM savings above 4% or you hope to. Inflation should be disinflationary for lack of a better word, you're going to get help from lapping SNAP. I could reel off a lot of potential positives into next year but that you weren't yet ready to kind of say it would be on algo. And I'm just trying to get a better sense of a month later than CAGNY you're in a little bit of better position to be somewhat more specific about how to think about maybe some of the puts and takes for next year.

Well, Ken, yes, you reeled off a lot of things we said at CAGNY, so pleased to hear hat. And you're right, when I say the benign environment, what we hope to be, I guess it would -- with regard to a couple of things, hopefully, with regard to inflation, we still see an inflationary environment. It's 4% now. It was double digits last year. And long term, it's been kind of 2% to 3%. And so hopefully, we're headed in the long-term direction as we look at next year, we'll certainly give guidance in June on what that exactly looks like. But to the extent we can have a more benign inflationary environment and a supply chain environment, we don't see the disruptions we've seen combined with good productivity. That's a good start.

And I think then the question for us, which we still really haven't answered yet, even a month after CAGNY, is how exactly are some of these external factors going to play out in the fourth quarter as we lap SNAP and as we lap on-shelf availability of private label and some of our smaller competitors, those things are a little bit, I would say, too early to call. But I will say the third quarter played out largely as we expected and the benefits of lapping pricing played out as we expected. And so it may be completely unsatisfactory but I'm not going to comment on F'25 at this time other than to reiterate productivity is good. We've seen inflation slowing, although there still is inflation and we'll know a lot more about what to expect out of the top line performance in a couple of months.

I knew going in, I'd be partially unsatisfied but that was helpful. And then quick follow-up. You mentioned that -- and just now, again, you mentioned SNAP reductions coming in the U.S. In a number of states, a decent chunk of those reductions have already been lapped. I don't know if your data would show this but I don't mean to put you on the spot but is it fair to say that you've seen improvements in these states? Or is it just a little more complicated than that? I'm just trying to get a sense because so much of what you're talking about depends on a little bit of that macro and how consumers react.

Yes. The answer to your -- the short answer is yes and yes and I'll explain. I mean, the first yes is that, yes, we have seen a small benefit in the states where we've lapped the SNAP benefits. And so we have seen that. I think it's important to remember a couple of things. One, that will take a while to play out as not if there's 1 event and it just kind of -- it happens and there's a cliff change. The other is that, that benefit is not huge. I mean there is some benefit but it's just not a -- it's not a huge benefit.

The other yes, as you said, there's some complicating factors. And the answer is, of course. I mean, because we're lapping pricing and pretty soon, we'll have on-shelf availability changes. So there's just a lot of factors in the environment that make it a little bit noisier than a perfect correlation but the short answer is, we're seeing a little bit of benefit in the places where we've lapped SNAP so far.

We'll move next to Max Gumport at BNP Paribas.

First on Pet, it looks like the action plan you discussed for the pet segment last quarter are starting to bear fruit. So on wet pet food specifically, I think you inflected from a minus double-digit decline in 2Q to growth in 3Q. I was hoping you could talk about any early signs of success you might be seeing with these more value-oriented multipacks and how they may or may not inform your view of what the 24-pound bag could be doing for Wilderness over the coming quarters in pet retail.

Yes, I would say on the wet pet food side, we certainly have seen improvements, whether it's all weighted back to growth or not. I mean I'm not sure it's all the way back to growth but it's -- but we certainly have seen improvements. And importantly, we've seen the improvements in that in the wet pet food business in the places where we got our price points back in line with what we thought would be beneficial. So that's good. We haven't gotten them back everywhere yet. So that's still a work in process and I think that will play itself out in the fourth quarter. But we are encouraged that the actions that we took, that we thought would have a benefit are having the benefit that we thought. And so something like, you're barely, be there. But that is -- so that feels good. How that relates to 24-pound bags of Wilderness? I just -- I guess I would say on Wilderness, I think it's going to be more complicated than just that. I mean we need to do, we need to get back to advertising Wilderness with messages kind of resonate to consumers. We have some ideas on that. We're working on that now. That will be important.

And then working with the pet specialty channel, in particular, where Wilderness has had a challenge. And they want to work with us and we want to work with them. And so that's positive. But we have some more work to do in that channel. And then there's some SKUs that we need to bring back. So I wish Wilderness were as simple as getting 24-pound bags in but I think it's going to be a little bit more complicated than that and take a little bit longer. But we are encouraged by the fact that what we have diagnosed on wet pet food and then the actions we have taken have largely played out the way that we thought.

Max, this is Jeff Siemon. I'll just add a point on the -- you mentioned net sales on wet food were up and that we didn't include that in our prepared remarks. That was true. They're up modestly. There's some inventory differences as you look at the individual subline. So retail sales on wet food are still down. They're moving -- they're better but they're -- but we still have some work to do to get them all the way to [indiscernible]. But you were right that, that from a net sales standpoint, they were up slightly in the quarter.

Yes. I think I saw that in the slide deck. And then one follow-up would be, just given the clean balance sheet and the continued emphasis on portfolio reshaping, I think it's safe to assume you're actively looking at acquisitions. I think past commentary would suggest you're focused on snacking and pet food categories and also businesses that play in your 8 core geographies. That said, I'm just curious given some of the recent industry news, how you might view ice cream, especially knowing that it is one of your global platforms.

Sure. I appreciate the question. Yes, on portfolio shaping, we really haven't changed our approach to portfolio shaping. We're pleased with what we have done and the 20% change we've made so far. We also know there's more to do, both in terms of acquisitions and divestiture to get back to the growth levels that we're looking for. But we've been looking for a while. And it's important to note that we have been and we'll be very disciplined when it comes to looking at acquisitions. And we're only going to do things that make sense for the shareholders, not just to chase a growth goal. And we remain disciplined over that over the years.

And the places that we're looking at I think will be growth accretive and certainly, Pet is a place that we like. You mentioned snacks, there some meal categories we like as well. And so there are a number of places where we could go, that would be either in categories we're in or tangential to categories and geographies where we feel like we've got some competitive advantages. I'm not going to talk about the recent announcements in ice cream specifically. I'll leave that to our competitors and I don't talk about M&A and particular deals.

We like our ice cream business. I mean we -- Häagen-Dazs is a great brand. And it's a super premium brand and it's growing nicely. It's good in Europe. It's really good in Asia. And so we -- it's 1 of our 5 global platforms. So we obviously like the category but particularly, we like Häagen-Dazs. And that is a super premium brand, is playing in growth spaces and we feel very good about that brand.

Next, we'll go to Chris Carey at Wells Fargo.

So just 1 follow-up and another question. Jeff, you mentioned in response to Andrew's question that fiscal Q4 revenues should look similar to Q3. Were you referring to the consumption or actual organic sales growth in the quarter?

I was referring to the consumption growth because as we look at it because of the timing of some of our expense phasing, there will probably be about a 3-point headwind on what we report. What I was referring to was the consumption, which is really the most important piece, the others, not that it's not important but it is an accounting catch up and would be kind of mechanical in nature, as Andrew suggested. So what I was referring to was the sales out, if you will.

Yes. Perfect. Okay. That's what I thought. And Kofi, just on -- clearly, sales were better than expected. Gross margins, I think, were a bit light relative to Street expectations, namely given positive pricing, easing inflation, strong productivity. Can you just expand a bit on maybe some of the key factors in the quarter that offset some of those positives? I think inventory work down, the volume deleverage relative to the year ago, year ago growth. Just any context on those items and how durable they might be into your Q4 and potentially a bit more medium term.

Yes, sure. I appreciate the question. And I think you've got the plot on the key drivers. The only thing I think would be helpful to add just to give you some additional perspective is that the inventory absorption which was, frankly, one of the side benefits of supply chain stabilization as we've been able to take down our levels of inventory recurring. And while that was a benefit to working capital and cash flow, it was about a 70-basis point headwind on gross margin, which I think would probably close most of the gap that you're referring to.

Next is Rob Dickerson with Jefferies.

Great. So this might be just kind of a broader question. I know within our, I guess, kind of calling out a little bit more pressure, let's say, in meals and baking and snacks. And maybe there's a little bit more strength in other areas. So I'm just kind of curious, like, broadly speaking, right now that we've kind of gone through what we would all consider fairly material pricing phase, have you seen any kind of like general shifts, let's say, in this category consumption, like consumers seem to be kind of consuming more -- a little bit more here than they used to relative to other areas. I'm just trying to kind of consider any types of shifts in kind of the value proposition of some of your brands and also just the category positioning.

Yes, I'll start with -- let me start in a little bit different place and I'll work my way back maybe to your question. I would say one of the shifts we've seen since the beginning of the pandemic is more food consumption at home. And so food consumption at home is a couple of points higher than it was going into the pandemic. So roughly about 86% of food is served at home. And the reason for that is because foodservice at home is such a great value and it's about 4x less expensive to eat at home than it is to eat out in a restaurant on average. And so as Americans have felt the challenges with inflation, part of the way they deal with the value is that they eat food at home rather than out and obviously, we were a great source of value when it comes to that.

That's actually probably one of the biggest shift. Interestingly, private label shares are about the same now as where they were before the pandemic. In the categories that we're in, private label is about 10% of the category. In fact, they're down 10 basis points from when the pandemic began and overall food and beverage is about 19 points. And so we haven't actually seen a big shift when it comes to value there. When it comes to specific categories, one of the things I'm most pleased with our performance over the last few years is our ability to hold our growth share in half of our categories over that time. And so -- that so is broad based. And we've seen some big gains in our business like Pillsbury refrigerated dough, which has done quite well in meals and baking over time.

The same with fruit snacks. Both of those businesses are up 60% over the last few years. And we've consistently gained market share in those businesses. Obviously, we haven't in Pillsbury this year because private label is getting back on shelf but over the course of time, so we feel really good about that. We've had some struggles in bars, as you well know. But I can say one of the things I'm pleased with as we look at our business now, Nature Valley is back to growing share and it was even before one of our competitors had a big recall. So it's not a recall induced kind of activity.

We've had some good new product innovation in Nature Valley. Our marketing is working in Nature Valley. I think we shared some of that at CAGNY. And so that's one category where we had struggled, where we feel like we're getting a little bit of momentum. And then on yogurt too, it's an area where we have struggled as well. But we have done well. We've got Yoplait protein out there right now, which is off to a nice start. And so -- but broadly speaking, I would say we haven't seen huge changes category by category in consumption.

All right. Fair enough. And then just quickly, you called out in the prepared remarks just a little bit of pressure maybe from the consumer in China and also Brazil. Maybe just kind of give us the quick kind of State of the Union, what you're seeing in both countries and that's all.

Yes, sure. In China, the biggest factor in our -- and we did say that, the biggest factor in our China business, I think it's important to note, is in our Wanchai Ferry frozen dumplings, where a year ago, Chinese consumers were kind of on lockdown. And so there's a lot of at-home consumption. So we're lapping that. And so the comparisons are very, very difficult. And that's the biggest driver of our challenges in China, if you will.

The other driver though is that we have had -- the store traffic in China is down a little bit from where it had been before. And I think that's probably a function of the Chinese consumer feeling the pinch of the economy that has slowed down over the past year. And so -- but the bigger driver is actually the Wanchai Ferry frozen dumplings. And in Brazil, it's kind of similar to the U.S., we're at the point now where we're lapping pricing from a year ago. And our hope is, we start to see the Brazilian -- our Brazilian business start to stabilize here over the coming quarter or two. That's been the big challenge. They've seen huge commodity price increases in Brazil. And so our input costs have gone up quite a bit in Brazil and we're lapping those now in Brazil kind as we are here in the U.S. And my hope is that as we head into our fourth quarter that we start to see our comparisons kind of ease a little bit.

We'll move next to Robert Moskow at TD Cowen.

This is Jacob Aiken-Phillips, on for Rob. Two quick ones. So I understand the trade timing 3% impact this year in 4Q. But last 4Q, you talked a lot about inventory reduction headwinds and you said about 3% then. So did you ship ahead in 3Q? Or is there some other factors that we're missing?

Yes, again, let me answer that to the best of my ability. But if I didn't get the question exactly right, ask it again and that -- because I'm not trying to avoid it. I would say in the third quarter, we had built inventory a year ago. And this year was pretty benign, I would say. Our -- if you look at our Nielsen data in North America retail, you see a 2-point difference. Some of that is due to the fact of unmeasured channels, we're growing faster than measured channels and only the balance of it is inventory growth. So our inventory is in a good position as we head out of the third quarter. And as we look at the fourth quarter, it's tough to say what's going to happen. You're right, last year, we bled inventory, several points worth of inventory in the fourth quarter last year. And so you may ask, well, does that mean you're going to build it this year or not? The answer is, I'm not really sure. It's really difficult to predict inventory changes. What I would say is that we feel like we're in a good place as we end the third quarter with our retail customers, whether that's in North America retail or whether that's in Pet. We don't have too much inventory but I think we have enough.

And so what to -- we're not expecting any change in the fourth quarter. And to the extent there is a change, we think it would be modest but we'll let that play itself out.

Yes, you got the question. And then, to follow -- another one is, so reduction in incentive comp. I know you have the trade timing headwind in 4Q but are there any changes to your expectations of investing in media or in the brands going into 4Q? Or is it how you're expecting last quarter?

No, I think -- I appreciate the question. I would say one of the things that worked really well and I want to make sure it didn't get lost in the strong profit performance in the quarter is that we have continued to invest behind our brands at a mid-single-digit rate. I wouldn't expect that to change as we go into Q4 even as we're driving better-than-expected profitability in a year in which we've seen obviously some top line pressure.

So from where I sit, I think what we're hearing is, we'll continue to keep our foot on the pedal. I don't expect a material change. So I'd expect around the year out somewhere in the mid-single-digit range of increase on our media, which will put us comfortably ahead of our top line expectations.

We'll take our next question from David Palmer at Evercore ISI.

A question on North America retail and what you're looking to see from that segment as you think about fiscal 2025. Obviously, that's a key high-margin segment and there's some big categories that make a lot of money for you in that segment. And I'm wondering, for those of us that are watching the scanner data and thinking about how you'll be thinking about the business and whether you can be sort of on algo for fiscal '25. What should we be looking for that will give you that confidence? For example, do you need to see volume approach flat year-over-year? Are there a couple of categories that you're reviewing a little bit more closely than others.

I'd say, you know, on -- without giving guidance to fiscal '25, we're still trying to kind of answer the tone of the question. I guess I would say we'll look for continued improvement in North America retail and hopefully, we'll see it in Pet too. But North America retail since you ask about that, hopefully, continued improvement. We saw a little bit in the third quarter and we'll see about what happens in the fourth quarter, particularly in volume improvements. And we'd hope to see that broadly. I mean, of course, we always look at the cereal category and what we're doing there and snacks in Mexican, some of our big categories. But I would say that would be broadly speaking, that's what we're looking for.

So we'd like to get back to -- we'd like to get back to a position of growth as a company and we're going to continue to invest to do that, to make sure we invest in marketing to make sure we grow. And so in a year where we hope productivity is still strong as we talked about earlier and inflation is still there but hopefully, relatively benign, hopefully, we can reinvest some of that productivity back into marketing spending so that we can continue to grow the top line of the business because we've been very good in the middle of the P&L. The biggest challenge, obviously, this year has been with growth. And so it's really important for us as a company and now in particular but everybody really to get back to growth.

And then you were talking about early signs of a SNAP -- lack of SNAP subsidy headwind, I should say. What are you seeing? Is there -- is that -- is that something you were just seeing in the last week or two? Is it specific to certain categories that you think are a little bit more family oriented or meal oriented? I mean what are you seeing there?

Yes. The first thing, a couple of important points about SNAP, I said them earlier but I'm going to reiterate because I think they're important. The first is that, we have seen a little bit of a benefit but it's not going to be a step change. It's not going to come in and, frankly, week by week and it will roll in over time. And the benefits we're going to see from those are going to be modest. I mean, there may be -- we think there will be a benefit but I think they're going to be modest in nature.

The other thing I guess, the other context I would add and I'm not going to go category by category but the benefits do accrue category by category. And so they're not going to be even from one category to the next. And so as we look at it, yes, we'll aggregate them because that's the easiest way to do it. But some categories are different than others. And certainly, when you're serving families as we do some -- for our portfolio, those are categories that tend to benefit from SNAP benefits more than others.

We will go next to Pamela Kaufman at Morgan Stanley.

Just in thinking about some of the headwinds that may be abating over the couple of quarters, do you have an estimate of how much you think that SNAP may have impacted your overall growth or industry growth? And also just that the improvement in on-shelf availability, how much of a tailwind can that be to your growth outlook?

Yes. I think, Pam, I'm not going to -- this would be unsatisfactory, so I apologize but I'm not going to try to quantify either one of those two things only because there are so many moving pieces. We've got -- we are lapping pricing as well in the external environment. But I would say the SNAP benefits are pretty modest. They're there but they're pretty modest. But look, I'll take a modest benefit at this point. The on-shelf availability should also provide a modest benefit to us. But again, that will be over time and it won't be a onetime event. And that will really start kind of at the end of April, beginning of May, we would start to see the benefits of that into our first quarter. And so I think as we talk to you in June, hopefully, we'll give a little bit more satisfactory answer about kind of what we're seeing because we will -- we will have seen both of these things play out for a period of time.

Okay. Understood. And then just on corporate expense, pretty notable reduction year-on-year. What's contributing to that? And should we be extrapolating these levels going forward?

Pam, appreciate the question. The primary driver in the quarter was reduction in our incentive-based comp accrual as we obviously are tracking a lower top line performance and comping last year, where we had to increase it pretty sizably on outstripping our top and bottom line performance last year. So I expect this to be a benefit that we'll see specific to the quarter. The other item is related to recall insurance recovery, which we booked in the quarter. So those are specific to the quarter and I wouldn't expect them to be part of the base expectation going forward.

We'll go to the next question from John Baumgartner at Mizuho Securities.

Jeff, I wanted to come back to the value-seeking consumer. And in North America retail, the areas where volumes have still been lagging. You look at cereal, go, frozen snacks, the category pricing is up 1/3 to 50% in 2019. What can we do at this point? Any levers left to maybe enhance the volumes that are a bit more independent of the macro. I mean, can you go to the pack changes as you're doing in pet, can you innovate or market consumers into higher prices? Or is it just that some categories overshot on pricing, relative to what consumers can bear and now it's down either taking prices the other way or just waiting for consumers to grow into these levels financially?

Yes. A couple of things I would say. The most important thing I would start with is that what you see in all the categories you mentioned, is a significant change in input cost inflation. So we've been the recipients of quite a bit of inflation over time. More than 30%, in fact, I think, it's 32% over the past 3 years or so. So the cause of prices going up really has been input cost inflation and the prices that we received.

As we look category by category, we don't think we're out of line to where we were pre-pandemic actually. And I think it's important, as consumers seek value, they seek in a variety of ways. The most important way are the benefits that our brands provide. And so part of the reason that we continue to invest in media and marketing and will continue to do so is that our brands have value and what they provide, Cheerios provides heart health. And Pillsbury provides quick, easy, convenient meals at dinner time. And so that's the most important thing.

But then more specifically, consumers also look at value in different ways when it comes to pricing and some want to buy in bulk. So they'd be going to a mass store to buy a big boxes of cereal, for example, for the lowest price per ounce, where they'll be buying 80 packages of fruit snacks at a time at a warehouse store. Otherwise, they'd feed the soccer team. Otherwise, they may be stopping off at a dollar store, at a discount store to buy a 1 pack at a time. And so there's not 1 monolithic consumer. Every consumer looks for value in their families in a variety of different ways, including trying to feed their families at home.

So we don't think that our pricing has gotten ahead of inflation. In fact, it hasn't. And we feel good about where we are in the categories. I think what we have to do is lap some of the onetime on shelf availability, things we've seen now, we've lapped pricing. And once we do that, we feel good about our ability. And I think you see that in the third quarter. We -- in North America retail, we grew market share in about 45% of our categories in the third quarter, which is a significant improvement from what we had seen in the quarter before. And hopefully, as we lap some of these other factors, snapping on shelf availability, we'll see continued improvement.

Okay. I think that's all the time we have. Before we wrap here, I think I'll pass it back to Jeff for some closing comments.

Yes. So well, thanks, everyone, for the time this morning. I guess I would start by saying we're encouraged by our third quarter results, particularly improvement in competitiveness in our categories. We're competing effectively and we thought that we would. And a lot of this is driven by lapping some pricing from a year ago and our ability to continue to execute well. We have innovated well. We have grown distribution. We have done -- we're executing our plan well. As we look to the fourth quarter, I mean, there are some timing issues as we talked about with expense -- the timing of expenses. But broadly speaking, we would expect our third quarter sales to kind of play out in the same magnitude that we saw in the third quarter. And our goal really now is to gain some -- regain some top line momentum as we continue to be very disciplined in the middle of our P&L. And we think that combination of factors will serve us well. We'll see how it plays out. There are a number of factors in the coming months, including this lapping of the SNAP benefit as well as on shelf availability and we'll be able to come to you in June with certainly a clear picture of what we expect in fiscal '25 and what some of those benefits are that we'll lap over the coming couple of months.

Great. So we'll wrap it there. Thanks, everyone, for the time this morning. Feel free to reach out if you've got follow-up questions throughout the day. Have a good day, everyone. Thanks.

And this concludes today's conference call. Thank you for your participation. You may now disconnect.