General Mills’ pet segment remains flat in last quarter

General Mills’ pet segment revenue fell flat in Q1 FY2024, ending at the end of August, posting net sales of $580 million (€542M).

The amount is the same as in Q1 FY2023. According to the company, this was driven by “favorable net price realization and mix offset by lower pound volume.”

“Net sales were up mid-single digits for dry pet food, roughly flat for wet pet food, and were down double digits for pet treats,” says the company.

Operating profit dropped by 10% in Q1 FY2024 to $111 million (€103.7M). During the same period in FY2023, profits accounted for $123 million (€114M). General Mills says this was due to “higher input costs, lower volume, higher expenses, partially offset by favorable net price realization and mix.”

At the end of Q4 2023, CFO Kofi Bruce commented on his expectations for FY2024, saying that he expected pet operating profit growth to be “a bit faster” than organic net sales.

The Minneapolis-headquartered firm has reaffirmed its fiscal 2024 guidance. “Looking ahead, we will remain focused on executing our Accelerate strategy and driving strong growth for our brands,” says Chairman and CEO Jeff Harmening.

Optimism and challenges

General Mills is optimistic about the future of its pet brand, Blue Buffalo. In a recent speech at the Barclays 2023 Global Consumer Staples Conference, Bruce said that the company foresees long-term growth for the brand as the humanization trend prevails.

According to the company’s CFO, in the 5 years of General Mills owning Blue Buffalo, they have doubled sales, doubled household penetration and quadrupled distribution.

However, the manufacturer is experiencing some challenges with its super-premium dog food product Wilderness, which has been impacted by a change in pet parent behavior.

Nevertheless, the CFO notes that the premium category is supported by long-term pet population growth expectations in the low single digits.