通用磨坊 (GIS) 2023 Q3 法說會逐字稿

Greetings, and welcome to the General Mills Third Quarter Fiscal '23 Earnings Q&A webcast. During the presentation, all participants will be in listen-only mode. (Operator Instructions) As a reminder, this conference is being recorded Thursday, March 23, 2023. It is now my pleasure to turn the conference over to Jeff Siemon. Please go ahead.

您好，歡迎收看 General Mills 第三季度 23 財年收益問答網絡直播。在演示過程中，所有參與者都將處於只聽模式。 （操作員說明）提醒一下，本次會議將於 2023 年 3 月 23 日星期四錄製。現在我很高興將會議轉交給 Jeff Siemon。請繼續。

Thank you, Tina, and good morning to everyone. Thank you for joining us today for this Q&A session on our third quarter fiscal 2023 results. I hope everyone had time to review the press release, listen to our prepared remarks and view our presentation materials, which were made available this morning on our Investor Relations website.

謝謝你，蒂娜，大家早上好。感謝您今天加入我們，參加關於我們 2023 財年第三季度業績的問答環節。我希望每個人都有時間閱讀新聞稿，聽取我們準備好的評論並查看今天上午在我們的投資者關係網站上提供的演示材料。

It's important to note that in our Q&A session, we may make forward-looking statements that are based on our 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.

重要的是要注意，在我們的問答環節中，我們可能會根據我們當前的觀點和假設做出前瞻性陳述。請參閱今天上午的新聞稿，了解可能影響前瞻性陳述的因素以及非 GAAP 信息的對賬，這些可能會在今天的電話會議上討論。

I'm here with Jeff Harmening, our Chairman and CEO; Kofi Bruce, our CFO; and Jon Nudi, Group President of our North America Retail segment. So let's go ahead and get to the first question. Tina, can you please get us started?

我和我們的董事長兼首席執行官 Jeff Harmening 一起來的；我們的首席財務官 Kofi Bruce；以及我們北美零售部門的集團總裁 Jon Nudi。那麼讓我們繼續討論第一個問題。蒂娜，你能讓我們開始嗎？

(Operator Instructions) The first question comes from David Palmer of Evercore -- one moment please. The first question comes from Andrew Lazar of Barclays.

（操作員說明）第一個問題來自 Evercore 的 David Palmer——請稍等。第一個問題來自巴克萊銀行的安德魯·拉扎爾。

In Pet, you called out high single-digit takeaway through nine months. And I'm curious what you have is takeaway in fiscal 3Q specifically and regarding 4Q, I believe you've previously spoken to your expectation for double-digit sales growth in Pet in both the third and fourth quarters. So I guess, given where we can see consumption trends currently, trying to get a sense of what gives you confidence in that outcome, given is it more inventory rebuild to go or a step-up in consumption along with better service or more of a benefit from pricing or some combination of these?

在 Pet 中，您在九個月內取得了高個位數的收益。我很好奇你在第三季度和第四季度的具體收穫是什麼，我相信你之前已經說過你對第三季度和第四季度 Pet 銷售額實現兩位數增長的預期。所以我想，考慮到我們目前可以看到消費趨勢的地方，試圖了解是什麼讓你對結果充滿信心，考慮到更多的庫存重建還是消費的增加以及更好的服務或更多從定價或這些的某種組合中獲益？

Yes, Hi Andrew, this is Jeff, and thanks for the question about Pet. I would say, first, I would say our third quarter sales was roughly in line with what we thought it would be at 15% and it is true that we rebuilt some retail inventory. I think importantly, when you look at it, we built about as much inventory back in the third quarter as we lost in the second quarter. And for the year, our inventory and our -- I mean, our sales out and our reported net sales are about the same. So just you know, as we end the third quarter, we don't have a big retail inventory build they really are about the same.

是的，嗨，安德魯，我是傑夫，感謝你提出關於寵物的問題。我會說，首先，我會說我們第三季度的銷售額大致符合我們預期的 15%，而且我們確實重建了一些零售庫存。我認為重要的是，當你看它時，我們在第三季度建立的庫存量與第二季度損失的庫存量差不多。今年，我們的庫存和我們——我的意思是，我們的銷售額和我們報告的淨銷售額大致相同。所以你知道，當我們第三季度結束時，我們沒有大量的零售庫存，它們實際上是一樣的。

I would also say, and this may sound like a little bit of a spin, but I'm actually glad that we could build -- rebuild some inventory in the third quarter. We didn't think we're going to be able to. But because our supply chain got better pretty quickly in the third quarter, our service levels got to 90% or so. Especially in Dry Dog Food as well into the 90s. Because that happened, we were able to rebuild our inventory. Our customers are glad. Our retail customers are glad we're back in business. And so we shipped some inventory for promotions and so forth. So we're pretty pleased with the pet business, and there's more work to do.

我還要說，這聽起來有點繞口令，但我真的很高興我們可以在第三季度重建一些庫存。我們認為我們無法做到。但由於我們的供應鏈在第三季度迅速好轉，我們的服務水平達到了 90% 左右。特別是乾狗糧以及 90 年代。因為那件事發生了，我們能夠重建我們的庫存。我們的客戶很高興。我們的零售客戶很高興我們恢復營業。因此，我們運送了一些庫存用於促銷等等。所以我們對寵物業務非常滿意，還有更多工作要做。

For sure, there's more work to do, but it was a good quarter in terms of the ability to rebuild some inventory.

當然，還有更多工作要做，但就重建一些庫存的能力而言，這是一個不錯的季度。

The other thing I would say, a couple of more points. I think when you look deeper into our third quarter and retail movement, what you'll see is that our Dry Dog Food business really performed quite well and light protection formula continued to accelerate and is up -- was up 23% in dollar terms, but also 9% in pounds. And so we're feeling really good about our Dry Dog Food business, which is good because that's one we thought we'd recover the fastest followed by treats and then wet.

我要說的另一件事，還有幾點。我認為，當你深入了解我們的第三季度和零售活動時，你會發現我們的干狗糧業務確實表現非常好，光保護配方繼續加速增長——以美元計算增長了 23%，但也有 9% 以磅計算。因此，我們對我們的干狗糧業務感覺非常好，這很好，因為我們認為這是我們恢復最快的業務，其次是零食，然後是濕狗糧。

And that seems to be the case. The other thing I'd point out about retail movement is that our third quarter last year in Pet was very, very strong. And so as you look at the comparisons, we actually sold more dog food and pet food in Q3 than we did in Q2, both in terms of pounds and RNS. So it sequentially got better even if the comparisons don't look that great to Q3 in retail movement. And so as we said before, we'll grow double digits in the back half of the year, and we certainly did that in the third quarter, and we'll see what the fourth quarter brings.

似乎是這樣。我要指出的關於零售運動的另一件事是，我們去年第三季度在寵物方面非常非常強勁。所以當你看比較時，我們實際上在第三季度銷售的狗糧和寵物食品比我們在第二季度銷售的更多，無論是在磅還是 RNS 方面。因此，即使零售活動的第三季度比較看起來不太好，它也會依次變得更好。正如我們之前所說，我們將在今年下半年實現兩位數的增長，我們當然在第三季度做到了這一點，我們將看看第四季度會帶來什麼。

And then just a quick follow-up. You mentioned mid-single-digit inflation expected for fiscal '24. I'm curious if you think the carryover benefit from pricing already implemented and in place would be enough along with productivity to handle this? Or perhaps would other actions maybe be necessary, at least based on what we can see today. Admittedly, it's dynamic.

然後只是快速跟進。您提到了 24 財年預期的中個位數通脹。我很好奇您是否認為已經實施和到位的定價帶來的結轉收益足以與生產力一起處理這個問題？或者也許有必要採取其他行動，至少根據我們今天所看到的情況。誠然，它是動態的。

Yes. No, I appreciate the question. We don't want to get too far ahead here of our expectations. I will tell you, as we always do, we'll approach the fiscal year with an eye towards leveraging first, the productivity we get through our HMM cost savings programs. And to the extent that there is additional margin that we need to protect, we'll use the other levers we have. [Optune], including SRM. But I think we're not going to say much more at this point about fiscal '24.

是的。不，我很欣賞這個問題。我們不想在這裡超出我們的期望太遠。我會告訴你，一如既往，我們將著眼於首先利用我們通過 HMM 成本節約計劃獲得的生產力來接近財政年度。就我們需要保護的額外利潤而言，我們將使用我們擁有的其他槓桿。 [Optune]，包括 SRM。但我認為我們現在不會對 24 財年多說什麼。

The next question comes from Steve Powers of Deutsche Bank.

下一個問題來自德意志銀行的 Steve Powers。

Great. Maybe a follow-up on Andrew's Pet question. It sounds like on the --in from a retail perspective, you think any of the sort of the deceleration we've seen is more a product of year-over-year comparisons. But I guess, I guess when we cut in the data, it looks as though there is a deceleration and maybe the deceleration in General Mills' market share performance as well as just year-over-year growth.

偉大的。也許是安德魯的寵物問題的後續行動。從零售的角度來看，這聽起來像是——你認為我們所看到的任何一種減速更多是同比比較的產物。但我想，我想當我們切入數據時，通用磨坊的市場份額表現似乎在減速，也許是在減速，而且只是同比增長。

So how are you thinking about that? And to the extent that you are seeing some slowdown in takeaway relative to the overall category, is that a byproduct more of ongoing supply constraints that should improve with time? Or is it maybe more of a byproduct of category dynamics and some degree of demand softening and then trade down in the category?

那你怎麼想的？就您看到外賣相對於整體類別有所放緩的程度而言，這是持續供應限制的副產品，應該隨著時間的推移而改善嗎？或者它可能更多是類別動態和某種程度的需求疲軟的副產品，然後在類別中進行交易？

Yes. No, I appreciate the follow-up question about Pet. I would say, first, it's not about dynamics in the category. I mean the trend towards humanization is quite strong and remains quite strong. And so we really don't see a lot of trade down to private label, for example, or lower-priced brands. I mean it really is a function if there's a change in the category dynamics is that more people are going back to the office, and so mobility is a little bit higher. And so there's a little bit of feeding of wet dog food, for example, and more dry dog food and maybe a little bit less treating because people, again, are at their place of work more. So we see a little bit of that in the dynamic.

是的。不，我很欣賞關於寵物的後續問題。我會說，首先，這與類別中的動態無關。我的意思是，人性化的趨勢非常強勁，而且仍然非常強勁。因此，我們真的看不到很多交易，例如自有品牌或低價品牌。我的意思是，如果類別動態發生變化，那就真的是一個功能，那就是更多的人回到辦公室，因此流動性會更高一些。因此，例如，餵了一點濕狗糧，餵了更多幹狗糧，可能少了一點治療，因為人們再次在他們的工作地點工作。所以我們在動態中看到了一點。

So as we look at the category, I mean, we were -- our pounds were down 2% or so and what we can read in the category and the pounds in the category are down flat. So we're trailing -- we're still trailing the categories, so we still have some more work to do. But it certainly is not as big as a delta as it had been before. And so as we look ahead, one of the things we said is that we were pleased to see Life Protection Formula do so well, which tells us that the Blue brand is really good. And so we're pleased with that.

因此，當我們查看該類別時，我的意思是，我們的體重下降了 2% 左右，我們可以在該類別中讀到的內容和該類別中的磅數持平。所以我們落後 - 我們仍然落後於類別，所以我們還有更多的工作要做。但它肯定不像以前那樣大。因此，當我們展望未來時，我們說過的一件事是，我們很高興看到 Life Protection Formula 做得這麼好，這告訴我們 Blue 品牌真的很棒。所以我們對此感到滿意。

And so the first key is to get service levels up, and we've done that on dry dog food. The next is to turn our advertising and marketing back on. And again, we've done that in dry dog food, and we've seen the results. Now those service level is getting better on treats, now it's really time to activate our marketing on treats, and we would think that, that would get better over time. And then the probably the last to come along will be wet pet food, which is a combination of our service levels still only being in the 80s as well as a pet parent behavior and mobility. So that's kind of the order of things. And I guess I would characterize our pet businesses, we feel good that we have improved and yet we know that we have more work to do in several of our areas

所以第一個關鍵是提高服務水平，我們已經在幹狗糧上做到了這一點。接下來是重新啟動我們的廣告和營銷。再一次，我們已經在幹狗糧中做到了這一點，並且我們已經看到了結果。現在這些服務水平在零食方面越來越好，現在是時候激活我們的零食營銷了，我們認為隨著時間的推移會變得更好。然後可能最後出現的是濕寵物食品，這是我們仍處於 80 年代的服務水平以及寵物父母行為和流動性的結合。這就是事情的順序。我想我會描述我們的寵物業務，我們對自己的進步感到高興，但我們知道我們在幾個領域還有更多工作要做

Okay. Great. And maybe shifting gears a bit. Just want to ask around how you're thinking about elasticity. I know in the in what you put out this morning, you talked about expectations for little change in elasticity through the end of fiscal '23. I guess just maybe a little bit more on the puts and takes you're seeing there? And what I'm really curious about is how you think all of different accelerate strategy points of focus -- may help your portfolio hold up to the extent that we see more broad-based consumer slowing over the course of the calendar year. Just how you're thinking about those dynamics and your specific positioning should the consumer weaken as we progress forward?

好的。偉大的。也許換檔一點。只是想問問你是如何看待彈性的。我知道在你今天早上發布的內容中，你談到了對 23 財年末彈性變化不大的預期。我想可能只是多一點點，你在那裡看到了嗎？我真正好奇的是，你如何看待所有不同的加速戰略重點——可能有助於你的投資組合保持到我們看到更廣泛的消費者在日曆年中放緩的程度。如果隨著我們的進步，消費者會減弱，您將如何考慮這些動態和您的具體定位？

Let me take that at a top level, and then I'll probably pass it to John -- maybe give a couple of examples about NAR. Yes, I would say for the rest of our fiscal year, I mean, we're seeing little change in elasticities. And we have seen consumption of food at home remains stable over this past year. Despite all the volatility and puts and takes and theories. I mean the consumer seems to be reasonably robust. And at the same time, they're eating at home more than they were during pre-pandemic. And so we see a continuation of that.

讓我把它放在頂層，然後我可能會把它傳遞給約翰——也許會舉幾個關於 NAR 的例子。是的，我會說在我們財政年度的剩餘時間裡，我的意思是，我們看到彈性幾乎沒有變化。在過去的一年裡，我們看到家庭食品消費量保持穩定。儘管有所有的波動性、看跌期權和理論。我的意思是消費者似乎相當健壯。與此同時，與大流行前相比，他們在家吃飯的次數更多。所以我們看到了這種情況的延續。

I will say there are a couple of things. One private label exposure in our categories around the world is lower than what you see on the average. And I think that's a benefit to us. The other thing is that we've been investing, we've been investing in marketing. And so you see, over the last 4 years, our compound annual rate of growth and marketing spending is up, I think, about 4% or 5%. And if you look at this year, our marketing spending is double digits. And so it's not an accident that our brands -- we had strong brands to begin with, but we also know that brands are kind of organic in nature, if you will, and that you need to keep them growing. And so we've invested in marketing spending as well as capabilities. And we continue to do that through the third quarter of this year.

我會說有幾件事。我們類別中的一個自有品牌在全球範圍內的曝光率低於您所看到的平均水平。我認為這對我們有好處。另一件事是我們一直在投資，我們一直在投資營銷。所以你看，在過去的 4 年裡，我們的複合年增長率和營銷支出上升了，我認為大約是 4% 或 5%。如果你看看今年，我們的營銷支出是兩位數。因此，我們的品牌並非偶然——我們一開始就擁有強大的品牌，但我們也知道品牌本質上是有機的，如果你願意的話，你需要讓它們保持增長。因此，我們在營銷支出和能力方面進行了投資。我們將在今年第三季度繼續這樣做。

And so is not really an accident that private label is lower in our categories, and I think it pretends well for our future because even during the last recession, what we found is that even though private label gained a little share back in 2008 to 2010, we were able to hold -- we were able to hold market share due to our brands, thanks and our investments in consumer spending.

因此，自有品牌在我們的類別中排名較低並不是偶然的，我認為這對我們的未來來說很好，因為即使在上一次經濟衰退期間，我們發現，儘管自有品牌在 2008 年至 2010 年獲得了一點份額，我們能夠保持——由於我們的品牌，我們能夠保持市場份額，這要歸功於我們對消費者支出的投資。

But John, do you want to talk a little bit about NAR?

但是約翰，你想談談 NAR 嗎？

Yes. So just budding on what Jeff talked about. So as part of Accelerate, and Jeff touched on this, capabilities is something that we're very focused on. And one of those capabilities is strategic revenue management. So we've probably been at that one the longest 5 or 6 years now and feel really good about the capabilities that we've built. So we leverage the entire toolbox. So Obviously, with the inflation we've seen this past year, we've taken list price increases, focus on a lot on promotional optimization.

是的。所以只是開始了解 Jeff 所說的內容。因此，作為 Accelerate 的一部分，Jeff 談到了這一點，能力是我們非常關注的事情。其中一項功能是戰略收入管理。因此，我們可能已經在那個時間最長的 5 或 6 年了，並且對我們已經構建的功能感覺非常好。所以我們利用了整個工具箱。所以很明顯，由於我們去年看到的通貨膨脹，我們已經採取了標價上漲，重點關注促銷優化。

So if you look at what's happening in the market, frequencies coming back from a trade standpoint as we get healthier from a service standpoint, but price points were up double digits across our categories. And again, we're getting smart about how we look at pricing, not only at list price but also from a promotional standpoint as well. We look at Pie Crust's architecture index as well. So we are much more sophisticated today than we were even a few years ago. And I think that's helping us to make the right moves in market, which is helping with the elasticities as well. So it's something we'll stay focused on.

因此，如果你看看市場上發生的事情，隨著我們從服務的角度來看變得更健康，從貿易的角度來看頻率會恢復，但我們類別中的價格點上漲了兩位數。再一次，我們對如何看待定價變得越來越聰明，不僅是從標價，而且從促銷的角度來看。我們也查看 Pie Crust 的架構索引。所以我們今天比幾年前更加成熟。我認為這有助於我們在市場上採取正確的行動，這也有助於提高彈性。所以這是我們將繼續關注的事情。

And as Jeff mentioned, if we do run into a recessionary period, historically, we've held up pretty well. Obviously, private label does well during that period. But we've held our own and hold share relatively flat. It's really the third and fourth tier players in categories that seem to get hit the hardest from a share standpoint.

正如傑夫所提到的，如果我們確實遇到了衰退期，從歷史上看，我們表現得很好。顯然，自有品牌在那段時間表現不錯。但我們持有自己的股份，持有的份額相對持平。從份額的角度來看，似乎真正受到重創的是類別中的第三和第四梯隊玩家。

The next question comes from Ken Goldman, JPMorgan.

下一個問題來自摩根大通的 Ken Goldman。

One quick follow-up on Pet and then I had one on North American retail, if I could. Is there any way to roughly quantify how much maybe the gap between shipments and consumption or maybe the trade load however you want to put it, kind of helped company margins or segment margins during the quarter. And Pet, I realize there's back and forth and things have gone around quarter-to-quarter. So i'm just curious if we get a little bit of quantification around that, if possible?

一個關於 Pet 的快速跟進，然後我有一個關於北美零售的，如果可以的話。有沒有什麼方法可以粗略地量化出貨量和消費量之間的差距，或者貿易負荷之間的差距，無論你想怎麼說，這對本季度的公司利潤率或部門利潤率都有幫助。和寵物，我意識到有來回，事情已經每季度進行一次。所以我很好奇我們是否可以對此進行一些量化，如果可能的話？

It's really difficult to quantify, Ken, this is Jeff. It's really difficult to quantify what's going -- the contribution of inventory rebuild with margin for Pet in the third quarter. I would say, but there are a couple of things. First of all, I would say our margin in Pet was roughly in line with what we thought it would be. And the fact that our profitability decline in Pet was not a surprise to us. And is really based on a couple of factors.

這真的很難量化，肯，這是傑夫。很難量化正在發生的事情——第三季度庫存重建對 Pet 利潤的貢獻。我會說，但有幾件事。首先，我想說我們在 Pet 上的利潤率與我們的預期大致相符。 Pet 的盈利能力下降這一事實對我們來說並不意外。並且確實基於幾個因素。

One is -- and by the way, even though our margin actually did improve slightly from the second quarter. The factor that is really contributing to the fact that our profit decline in the third quarter in Pet was that we did see significant inflation and we did see a lot of costs coming in due to capacity expansion as well as some external sourcing. And so these are things we expected. The other thing I would point to is that when we saw Life Protection formula really doing well behind our marketing efforts in the second quarter, we decided to spend more against it in the third quarter. And that's paying dividends as our Life Protection formula has continued to accelerate, but it does mean our marketing spending had a negative impact on the P&L in the third quarter over the although it's clear over the long run -- that this is such a good idea.

一個是 - 順便說一句，儘管我們的利潤率實際上確實比第二季度略有提高。真正導致我們第三季度 Pet 利潤下降的因素是我們確實看到了顯著的通貨膨脹，而且我們確實看到由於產能擴張和一些外部採購而產生的大量成本。所以這些都是我們所期望的。我要指出的另一件事是，當我們看到 Life Protection 配方在第二季度的營銷努力背後確實表現出色時，我們決定在第三季度投入更多資金。隨著我們的 Life Protection 公式繼續加速，這正在帶來紅利，但這確實意味著我們的營銷支出對第三季度的 P&L 產生了負面影響，儘管從長遠來看很明顯——這是一個好主意.

So I want you to know that when it comes to Pet, the margins that we saw in the third quarter are very much in line with what we thought even if it's difficult to quantify the impact of margin rebuild. It's just our service is getting better, which I think is a positive.

所以我想讓你知道，就 Pet 而言，我們在第三季度看到的利潤率與我們的想法非常一致，即使很難量化利潤率重建的影響。只是我們的服務越來越好，我認為這是積極的。

Got it. But if I'm reading between the lines, it doesn't sound like it was a major impact if the margin came in somewhat close to what you thought. Is that correct?

知道了。但是，如果我從字裡行間看出，如果利潤率有點接近你的想法，這聽起來並不是一個重大影響。那是對的嗎？

That is correct. It's not a major impact, Ken. And I would also say, you didn't ask this, but I guess a bonus answer would be that in our fourth quarter, we actually -- we expect that our profitability will be up in our fourth quarter as we see our pricing that took place at the end of the quarter come into effect as we see a little bit easing on inflation, we see the service getting better. And so the drags that we see less on, we see a little bit more pricing and so we would anticipate that in Q4, our profitability will be up in Pet.

那是對的。影響不大，肯。而且我還要說，你沒有問這個，但我想一個額外的答案是在我們的第四季度，我們實際上 - 我們預計我們的盈利能力將在第四季度上升，因為我們看到我們的定價採取了地方在本季度末生效，因為我們看到通貨膨脹有所緩和，我們看到服務越來越好。因此，我們看到的阻力減少了，我們看到了更多的定價，所以我們預計在第四季度，我們的盈利能力將在 Pet 中上升。

And just to clarify, is that dollars margin, both?

只是為了澄清一下，美元保證金，兩者都是嗎？

Both.

兩個都。

Both perfect. Yes. I'll let it go there.

兩者都很完美。是的。我會讓它去那裡。

You have a question about NAR? I'm sorry.

您對 NAR 有疑問？對不起。

The next question comes from Alexia Howard of Bernstein.

下一個問題來自伯恩斯坦的 Alexia Howard。

Two questions. Can I ask about marketing spending to begin with? I know that you said it was up mid-single digits, I think, 4% to 5% over the last few years and up double digits, I believe, this year. Do you anticipate that this sort of strong level of marketing reinvestment or increase as a percent of sales is going to continue. And then linked to that, promotional activity, are you seeing any changes there? Is it sort of steady Eddie because obviously, that's come in or down quite a bit since the pandemic began. Do you anticipate not a big resurgence, as I think you've said before on the promotional side?

兩個問題。我可以先問一下營銷支出嗎？我知道你說過它在過去幾年中增長了 4% 到 5%，我相信今年增長了兩位數。您是否預計這種高水平的營銷再投資或增加銷售額的百分比會持續下去。然後與促銷活動相關聯，您看到那裡有什麼變化嗎？埃迪是不是有點穩定，因為很明顯，自大流行開始以來，這種情況已經出現或下降了很多。正如我想你之前在促銷方面所說的那樣，你預計不會有大的複蘇嗎？

Yes, I would say -- Alexia this is Jeff. I'll answer the first part of that question, and maybe Jon Nudi can give any insights on the second. I would say, in general, what we -- in general, what we would expect is that marketing spending growth would be roughly in line with sales growth. And we've seen last year, we've seen so much inflation on the food then on the cost of ingredient side. Our marketing spending has grown 4% or so, but it hasn't kept up with the sales growth. That's because we saw so much food inflation. But it actually has kept up more than kept up with pound growth. And the same is true this year, we're seeing double-digit increase in marketing spend. But over time, we -- our goal would be to increase our marketing spend roughly in line with our sales growth.

是的，我會說——Alexia，這是 Jeff。我將回答該問題的第一部分，也許 Jon Nudi 可以就第二部分給出任何見解。我想說的是，總的來說，我們——總的來說，我們期望的是營銷支出增長將與銷售增長大致一致。我們在去年看到，食品方面的通貨膨脹率如此之高，然後是配料方面的成本。我們的營銷支出增長了 4% 左右，但跟不上銷售增長的步伐。那是因為我們看到了太多的食品通脹。但它實際上跟上了英鎊的增長速度。今年也是如此，我們看到營銷支出呈兩位數增長。但隨著時間的推移，我們 - 我們的目標是增加我們的營銷支出，大致與我們的銷售增長保持一致。

So John, do you want to take the second part of the question?

約翰，你想回答問題的第二部分嗎？

From a merger standpoint. So if you look at versus pre pandemic levels, merchant of categories is still down double digits. I will say you're seeing frequency this past year increased high single digits. And that's really driven by the fact that we're getting back into merchandising in some categories that we couldn't support from a service standpoint over the last few years. At the same time, you're seeing merch price points up double digits across our categories as well.

從合併的角度來看。因此，如果你看看與大流行前的水平相比，類別的商家仍然下降了兩位數。我會說你看到過去一年的頻率增加了高個位數。這確實是由於我們正在重新開始某些類別的商品銷售，而在過去幾年中，我們從服務的角度來看無法支持這些類別。同時，您會看到我們類別中的商品價格也上漲了兩位數。

So again, as all of us are dealing with inflation and leveraging our SRM capabilities. We're raising the floor on many of our merch promotions. So as we move forward, service is still not back to historical levels. So we don't expect there to be significant inventory to be getting aggressive from a pricing standpoint. And obviously, everyone in the industry is dealing with increased costs and inflation as well. So we expect to continue to make sure that we're rational from a merchandising standpoint as we move forward.

再一次，因為我們所有人都在應對通貨膨脹並利用我們的 SRM 能力。我們提高了很多商品促銷活動的底價。所以在我們前進的過程中，服務仍然沒有回到歷史水平。因此，從定價的角度來看，我們預計不會有大量庫存變得激進。顯然，該行業的每個人都在應對成本增加和通貨膨脹。因此，我們希望在前進的過程中繼續確保從商品銷售的角度來看我們是理性的。

The next question comes from John Baumgartner of Mizuho.

下一個問題來自瑞穗的 John Baumgartner。

I wanted to come back to Steve's question, I think, on U.S. retail. The elasticity still favorable, but that elasticity alone sort of masks the underlying percentage volume declines from this pricing? And that's an industry issue, not just mills. But since food at home is not losing share to away from home. I mean you also think, I guess, once consumers normalize to these new prices, volume declines should also moderate independent of recession.

我想回到史蒂夫關於美國零售業的問題。彈性仍然有利，但僅憑這種彈性就可以掩蓋該定價導致的潛在成交量百分比下降？這是一個行業問題，而不僅僅是工廠。但由於在家吃東西的份額並沒有輸給出門在外的人。我的意思是你也認為，我猜，一旦消費者對這些新價格正常化，銷量下降也應該溫和，不受經濟衰退的影響。

So I'm curious, Jeff, for Jon, absent a bounce from recession, how you're thinking about that path to volume normalization? And then just given your brand-building innovation, do you think the portfolio's volume plus mix can grow reliably with population over time? Do you aspire to ahead of population growth? Just what's the expectation for that normalized performance at the portfolio level where you sit right now?

所以我很好奇，傑夫，對於喬恩來說，如果沒有從經濟衰退中反彈，你是如何考慮通向交易量正常化的道路的？然後就您的品牌建設創新而言，您認為投資組合的數量和組合能否隨著人口的增長而可靠地增長？你渴望領先於人口增長嗎？在您現在所在的投資組合層面，對標準化表現的期望是什麼？

Let me start this is Jeff. Let me start with the end in mind. And the end is that we think absent the current inflation environment we see, which, by the way, we don't think is going away anytime soon as we talk about mid-single-digit inflation in our next fiscal year. But absent a heightened inflationary environment we would expect our portfolio -- our exposure to growth to be in the 2% to 3% range, so call it 2.5% range. And that's what we talked a little bit about at CAGNY. And that would imply some level of volume growth as well as some level of pricing growth, a mix of those 2, which would, of course, fluctuate based on what happens in any particular year.

讓我開始，這是傑夫。讓我以終為始。最後是我們認為沒有我們看到的當前通貨膨脹環境，順便說一句，我們認為在我們談論下一個財政年度的中等個位數通貨膨脹時不會很快消失。但如果沒有通脹加劇的環境，我們預計我們的投資組合——我們對增長的敞口將在 2% 至 3% 的範圍內，所以稱之為 2.5% 範圍。這就是我們在 CAGNY 談到的一點點。這意味著一定程度的銷量增長和一定程度的定價增長，兩者的結合，當然，這會根據任何特定年份發生的情況而波動。

But we would think once we get back to a normal environment, which we don't see coming actually in the next 12 months. But in a normal environment, we would see some level of pound growth and some level, a little bit of pricing as dictated by the growth in our categories. And then you may --you had another deeper question about recession versus non recession. I'm not really sure how to go about all of that other than to say that what we do see is mid-single-digit inflation coming in the next 12 months.

但我們會認為，一旦我們恢復到正常環境，我們認為在接下來的 12 個月內實際上不會出現這種情況。但在正常環境下，我們會看到某種程度的英鎊增長和某種程度的定價，這是由我們類別的增長決定的。然後你可能 - 你有另一個關於衰退與非衰退的更深層次的問題。除了說我們確實看到未來 12 個月將出現中等個位數的通貨膨脹之外，我真的不確定如何處理所有這些問題。

I guess just thinking about the depth of the volume decline, and it feels like you're not seeing a shift out-of-home channel. So it feels like it's more to be just more left over consumption at home. I mean do you sense that consumers are getting close to normalizing to the new prices on shelf and that should just over the next couple of months sort of roll off with less deep volume declines going forward at this point in terms of the adjustment process for the consumer?

我想只要想想銷量下降的深度，感覺就像你沒有看到戶外渠道的轉變。所以感覺更多的是在家裡消費剩下的更多。我的意思是，你是否感覺到消費者正在接近正常化新的貨架價格，並且在接下來的幾個月內應該會隨著調整過程的調整過程而減少銷量下降幅度消費者？

Yes, John. So obviously, volumes are down for NAR. And as we look at that, we expected it, frankly, with the amount of pricing that we've taken, historical elasticities would suggest much bigger declines. So again, we feel comfortable with where we are. That being said, as we pivot into fiscal '24, we want to get back to growing not only dollars but growing pound volume as well. And it's going to be really all about the fundamentals.

是的，約翰。很明顯，NAR 的銷量下降了。當我們看到這一點時，我們預計，坦率地說，根據我們所採取的定價數量，歷史彈性將表明更大的跌幅。因此，我們再次對自己所處的位置感到自在。話雖如此，隨著我們轉向 24 財年，我們不僅要恢復美元增長，還要恢復英鎊交易量增長。這將真正關乎基本面。

And as Jeff mentioned, we're investing in marketing. We feel really good about our marketing on our major brands. Innovation is something that we haven't pulled back on through the pandemic, and we'll continue to press the advantage there. And we think that we've got some great items coming in the coming year. And the capabilities that we're investing in from an accelerated standpoint are really helping as well. I mentioned that around -- in addition to that, digital marketing is something that's very exciting right now in terms of the ability to really have one-to-one relationships and target consumers and over 50% of our marketing now across NAR is digital, and that will continue to increase. So it will be back to the fundamentals, and we feel really good about our ability to compete in that role as we move forward.

正如傑夫提到的，我們正在投資營銷。我們對主要品牌的營銷感到非常滿意。創新是我們在大流行期間沒有退縮的東西，我們將繼續發揮那裡的優勢。我們認為來年我們會推出一些很棒的產品。我們從加速的角度投資的能力也確實有幫助。我提到過——除此之外，就真正建立一對一關係和目標消費者的能力而言，數字營銷現在是非常令人興奮的事情，現在我們在 NAR 上超過 50% 的營銷是數字的，並且會繼續增加。所以這將回到基本面，我們對我們在前進的過程中扮演這個角色的能力感到非常滿意。

The next question comes from Chris Carey, Wells Fargo.

下一個問題來自富國銀行的 Chris Carey。

So just a couple of quick questions around inflation. Just on the mid-single-digit inflation. You noted in the prepared remarks that, that is split between labor and conversion costs primarily. I wonder if you could just aggregate that. And then what are you seeing from a commodity standpoint within that mid-single-digit equation?

所以只有幾個關於通貨膨脹的快速問題。只是中個位數的通貨膨脹。您在準備好的評論中指出，這主要在勞動力和轉換成本之間分配。我想知道你是否可以匯總一下。然後，從商品的角度來看，您在那個中個位數等式中看到了什麼？

Yes. I appreciate the question. So I won't decomp it very deeply other than to tell you that what we're tracking is some of the headline commodity numbers have been obviously coming off of their peaks. Part of the reason we're giving this expectation is because embedded within the inflation expectations for our total input cost a fair amount of conversion cost behind some of we're not taking in just raw commodities. So as we think about the impact of continued labor pressure, energy costs, those and other conversion costs that go into taking raw materials, creating value-added inputs that go into our products. That's what's driving the inflation.

是的。我很欣賞這個問題。所以我不會很深入地分解它，只是告訴你我們正在追踪的是一些標題商品數據顯然已經從高峰期回落。我們給出這種預期的部分原因是因為在我們的總投入成本的通脹預期中嵌入了相當數量的轉換成本，而我們不只是接受原材料商品。因此，當我們考慮持續的勞動力壓力、能源成本、那些和其他轉化成本的影響時，這些成本和其他轉換成本會進入原材料，創造進入我們產品的增值投入。這就是推動通貨膨脹的原因。

So I think the key here is it probably is an overread to look just at the commodity softening on some of the key commodities and assume that there's going to be a more benign inflationary environment. So we'll give you a decomp and a little bit deeper dive when we come back in Q4 and provide guidance for the next year.

因此，我認為這裡的關鍵在於，僅僅看一些主要商品的商品走軟並假設將會有一個更溫和的通脹環境可能是一種過度解讀。因此，當我們在第四季度回來並為明年提供指導時，我們會給你一個分解和更深入的潛水。

Okay. That's helpful. One quick follow-up. On the last earnings call, I believe there was a question just around whether the non-commodity pieces of the equation were appropriate buckets to come to retailers with an inflation story, right? And so this mid-single-digit inflation, are these the types of a typical inflation drivers that typically, you would be able to come to a retailer with the pricing story. I appreciate HMM and other offsets are going to be important, including revenue growth there of SRM. But just in the context of this total inflation idea that we're hearing across the space right now, is that really sticking with the retailer? I just wonder if you could provide any context on that.

好的。這很有幫助。一個快速跟進。在上次財報電話會議上，我相信有一個問題是等式中的非商品部分是否適合與通貨膨脹故事一起來到零售商那裡，對吧？因此，這種中等個位數的通貨膨脹是典型的通貨膨脹驅動因素的類型，通常，您可以帶著定價故事來到零售商處。我很欣賞 HMM 和其他補償將很重要，包括 SRM 的收入增長。但是，就我們現在在整個空間聽到的這種全面通貨膨脹的想法而言，這真的與零售商保持一致嗎？我只是想知道您是否可以提供任何背景信息。

Yes. I'll talk broadly for the enterprise. And Jon, if you want to jump in and provide some specific perspective from NAR, and we can do that. Broadly, we look at the entire basket of our input cost. So that includes manufacturing, sourcing and freight. So as we think about the combination of those 3 things, that's generally or we go and we talk to retailers about the total input cost basket.

是的。我會為企業廣泛地談論。喬恩，如果你想加入並提供一些來自 NAR 的具體觀點，我們可以做到。從廣義上講，我們會查看整個投入成本籃子。這包括製造、採購和貨運。因此，當我們考慮這三件事的組合時，這通常是或者我們去與零售商討論總投入成本籃子。

What's probably not included in that we have talked about in past earnings calls is the other costs to serve in this environment. Some of the added pressures that come from supply chain disruptions, some of the short-term decisions we've had to make wrong product changes and external supply chain that have allowed us to service in a disrupted environment. Those things probably a little bit harder to include in the conversation.

我們在過去的財報電話會議上討論過的可能不包括在這種環境中服務的其他成本。供應鏈中斷帶來的一些額外壓力，我們不得不做出錯誤的產品變更和外部供應鏈的一些短期決策，使我們能夠在中斷的環境中提供服務。這些事情可能有點難以包含在對話中。

I would just say, as we talk to retailers, we're focused on multiple things. I mean, still focused on supply chain. So again, we're still short order. We've been historically in the 98% to 99% service level. So well certainly better than where we were a year ago. That continues to be a focus and something we spend a lot of time talking about. And then it is about growth. And again, obviously, dollars have grown strongly. I think all of us want to get back to not only growing dollars but also growing units as well, and that's something that we stay very focused on.

我只想說，當我們與零售商交談時，我們專注於多個方面。我的意思是，仍然專注於供應鏈。所以，我們仍然缺貨。我們一直處於 98% 到 99% 的服務水平。所以肯定比我們一年前更好。這仍然是一個焦點，也是我們花了很多時間談論的事情。然後是關於增長。顯然，美元再次強勁增長。我認為我們所有人不僅希望恢復增長的美元，而且還希望恢復增長的單位，這是我們一直非常關注的事情。

In terms of SRM and whether what levers we pull into the coming year, we pull extra levers every year regardless of inflation. And as we see inflation next year, we'll continue to leverage SRM. And obviously, our retailers are being impacted by inflation as well. So we'll see how the year unfolds. At this time last year, we certainly didn't envision the number of moves that we've taken this year. One of the things we're really proud of is the way that we've reorganized over the last few years as an enterprise, we're much more agile. So we feel really good about being able to deal with what comes our way, and we'll have any appropriate conversations with retailers if we get to that point.

就 SRM 而言，無論我們在來年使用什麼槓桿，無論通貨膨脹如何，我們每年都會使用額外的槓桿。當我們明年看到通貨膨脹時，我們將繼續利用 SRM。顯然，我們的零售商也受到通貨膨脹的影響。所以我們將看看這一年如何展開。去年這個時候，我們當然沒有預料到我們今年採取的行動數量。我們真正引以為豪的一件事是過去幾年我們作為一家企業進行重組的方式，我們變得更加敏捷。因此，我們對能夠處理遇到的問題感到非常高興，如果我們到了這一點，我們將與零售商進行任何適當的對話。

The next question comes from Bryan Spillane of Bank of America.

下一個問題來自美國銀行的 Bryan Spillane。

Just two for me. One, what is just in the quarter was up pretty meaningfully, just in absolute dollars, and I understand there's a pretty strong marketing component. Can you just maybe copy, give us a little more insight in terms of outside of marketing or advertising, just what else is driving SG&A and I don't know, it's just sort of the level we should be looking at as we model the fourth quarter? So just some perspective there. And then I have a follow-up.

對我來說只有兩個。第一，本季度的增長非常有意義，就絕對美元而言，我知道有一個非常強大的營銷部分。你能不能複制一下，給我們更多關於營銷或廣告之外的見解，還有什麼在推動 SG&A，我不知道，這只是我們在模擬第四個模型時應該關注的水平四分之一？所以只是一些觀點。然後我有一個後續行動。

Yes. So let me -- you're absolutely right. In the third quarter, media was a big driver. It was up strong double digits. We expect it to actually be a driver of SG&A as we head in the fourth quarter as we've been turning marketing back on, on Pet, putting additional spending on key platforms. And as a reminder, I think it's important as we were coming out of a period where 5 years, 6 years earlier, we had pretty much depleted pretty significantly the amount of marketing spending. So we've been sort of investing through this cycle to ensure that we have appropriate support behind strong marketing ideas. I think the rest of it outside of marketing spending, we have seen some increase in admin primarily related to comp and benefits as we've seen our performance improve.

是的。所以讓我——你是絕對正確的。在第三季度，媒體是一個很大的推動力。這是強勁的兩位數。我們預計它實際上將成為 SG&A 的驅動力，因為我們一直在第四季度重新開始營銷，在 Pet 上，在關鍵平台上投入額外支出。提醒一下，我認為這很重要，因為我們正在走出 5 年、6 年前的一段時期，我們已經大大減少了營銷支出。因此，我們一直在通過這個週期進行投資，以確保我們在強大的營銷理念背後得到適當的支持。我認為除了營銷支出之外的其餘部分，我們已經看到主要與薪酬和福利相關的管理有所增加，因為我們已經看到我們的績效有所提高。

Obviously, that increases our incentive accrual, we've seen some increase related to charitable contributions. Those have been kind of the big non-marketing spend drivers as we look at the quarter.

顯然，這增加了我們的應計激勵，我們已經看到一些與慈善捐款相關的增長。當我們看這個季度時，這些是非營銷支出的主要驅動因素。

Okay. And those seem like they're more transitory, meaning we shouldn't see an absolute dollar levels, probably not the same level of SG&A in the fourth quarter that we saw in the third quarter?

好的。這些似乎更短暫，這意味著我們不應該看到絕對的美元水平，第四季度的 SG&A 水平可能與我們在第三季度看到的水平不同？

I think that is generally fair.

我認為這通常是公平的。

Okay. All right. Cool. And then second question just on food service. And maybe, Jeff, if you can just kind of give us a perspective on kind of where that business stands now? You took the convenience piece out of it. It looks like food sales are coming back even if you strip out the benefit of Flower milling. So can you kind of give us a perspective on kind of where you see that business today in terms of where you kind of envision it going forward now that it's really focused on food service? And also just a comment on profitability, the margins, again, kind of back into the mid-teens level. It used to be kind of a higher-margin business pre-COVID just trying to get a sense of like -- is this early innings in terms of kind of what you envision for what this business could be like, both from a revenue and a profitability standpoint.

好的。好的。涼爽的。然後是關於餐飲服務的第二個問題。傑夫，也許你能給我們一個關於該業務現在所處位置的觀點嗎？你把它的便利部分拿走了。即使剔除花卉加工的好處，食品銷售似乎也在回升。那麼，您能否給我們一個關於您今天看到該業務的觀點，以及您對它真正專注於食品服務的未來發展方向的看法？而且只是對盈利能力的評論，利潤率再次回到十幾歲的水平。在 COVID 之前，它曾經是一種利潤率較高的業務，只是想獲得一種感覺——從收入和盈利能力的角度。

Yes. So on Food service, you're right, we took convenience stores out of our food service business and put them in North America retail, and that's been going very well. Really pleased to see that combination of businesses in North America retail. At the same time, we also expanded our food service business to not only be just U.S.-focused but North America focused. And we're really pleased with that, too, because we have a lot of customers that operate across North America. So we're really pleased how we're executing the convenience piece in NAR but also adding food service and to make it North America Food service was also meaningful for us.

是的。所以在食品服務方面，你是對的，我們將便利店從我們的食品服務業務中剝離出來，並將它們放在北美零售中，而且進展非常順利。真的很高興看到北美零售業的這種業務組合。與此同時，我們還擴大了我們的食品服務業務，不僅專注於美國，還專注於北美。我們對此也非常滿意，因為我們有很多客戶在北美開展業務。所以我們真的很高興我們如何在 NAR 中執行便利部分，同時也增加食品服務並使其成為北美食品服務對我們來說也很有意義。

I'm really thrilled to see the momentum that we have in this business. As you can imagine, with fewer people eating in restaurants. It was a little bit tougher for our food service for a number of months. But we've got a strong K-12 school business that has served us very well. We continue to gain share in many of our categories across food service. And as we look, as you can see, it's back to pretty strong growth now. Last year was a tough third quarter. So the comparison in the third quarter are easy. And yet, in aggregate, we have really good momentum in our food service business. And so what I believe is that our food service business can continue to be an accelerator of top line growth, but also continuing to expand margins.

看到我們在這項業務中的發展勢頭，我真的很激動。可以想像，在餐館吃飯的人越來越少。幾個月來，我們的餐飲服務有點艱難。但我們擁有強大的 K-12 學校業務，為我們提供了很好的服務。我們繼續在食品服務的許多類別中獲得份額。正如我們所看到的，正如你所看到的，它現在恢復了相當強勁的增長。去年是艱難的第三季度。所以第三季度的比較很容易。然而，總的來說，我們的食品服務業務發展勢頭非常好。因此，我相信我們的食品服務業務可以繼續成為收入增長的加速器，同時也可以繼續擴大利潤率。

When you talk about the profitability, they were hit particularly hard on the profit side. And I think it's fair to say that we're still in the early innings on driving back margin growth into our food service business, and we're confident that we can and we're also confident that we need to. And so we'll continue to drive margin growth as we still grow our top line sales growth. So we think we can do both of those at the same time in food service and are pleased with the momentum that we've regained in there.

當你談到盈利能力時，他們在利潤方面受到的打擊尤其嚴重。而且我認為可以公平地說，我們仍處於推動食品服務業務利潤率增長的早期階段，我們有信心我們可以而且我們也有信心我們需要這樣做。因此，我們將繼續推動利潤率增長，因為我們仍將實現營收增長。因此，我們認為我們可以在餐飲服務中同時做到這兩點，並對我們在那裡重新獲得的勢頭感到滿意。

Thank you. At this time, I'd like to turn the call back over to our speakers for any closing remarks.

謝謝。此時，我想將電話轉回給我們的發言人，聽取任何結束語。

Okay. Thanks, everyone. I think that's all the time we have this morning, but I really appreciate the good engagement. And we will obviously be available throughout the day for follow-ups. Otherwise, we'll look forward to seeing you over the spring. Thanks again.

好的。感謝大家。我想我們今天早上就這樣了，但我真的很感謝大家的積極參與。我們顯然會全天候跟進。否則，我們期待在春天見到你。再次感謝。

Thank you. This does conclude the conference call for today. We thank you for your participation and ask that you please disconnect your lines. Thank you, and have a good day.

謝謝。這確實結束了今天的電話會議。我們感謝您的參與，並請您斷開您的線路。謝謝你，有一個美好的一天。