General Mills, Inc. (NASDAQ:GIS) reported third-quarter financial results before the market open on Wednesday. The transcript from the company’s third-quarter earnings call has been provided below.

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Operator

Good morning and welcome to General Mills third quarter fiscal 2026 earnings conference call. All participants are in a listen only mode. After the speaker’s remarks, we will conduct a question and answer session. To ask a question at this time, you’ll need to press STAR followed by the number one on your telephone keypad. As a reminder, this conference call is being recorded. I would now like to turn the call over to Jess Seaman, Vice President of Investor Relations and Corporate Finance. Thank you. Please go ahead.

Jeff Siemon (Vice President of Investor Relations and Corporate Finance)

Thank you, Julianne and hello everyone. Thank you for joining us today for a live Q and A session on our third quarter fiscal 26 results. I hope everyone had time to review our press release, listen to the 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 and 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 with Jeff Harmoning, our chairman and CEO, Kofi Bruce, our CFO and Dana McNabb, group president of North America Retail and North America PET. And before we get to Q and A, I’ll turn it over to Jeff for some opening remarks.

Jeff Harmening (Chairman and Chief Executive Officer)

Thanks Jeff and good morning everybody. We’ll turn to Q and A here in a couple minutes, but I thought I’d just take a minute or two to provide some context on what we’ve been through through the first three quarters of this year. And then based on the progress we’ve been able to demonstrate, you know, how we’re positioned to deliver a significant step up in financial performance which will start in our fourth quarter. Which is why we reaffirmed our guidance for fiscal 26. You know, as a reminder, as we entered this fiscal year, you know, we made a proactive and strategic decision to reinvest to improve the remarkability of our brands with full awareness that this would weigh on near term results as we sharpened our competitiveness. So now three quarters into that plan, we’re seeing strength and momentum on critical building blocks for sustainable growth, namely household penetration, improved baseline volume distribution and market shares. And this progress only reinforces our conviction that this strategy is the right one for General Mills in North America Retail, you know, our investments and remarkability are resonating with consumers. We’re rebuilding household penetration and baseline growth which are the key indicators of future growth in pet. We’re adding households as well and fueling our fast growing cat feeding portfolio and also taking steps to accelerate our growth through Love Made Fresh. And we’re continuing to be competitive in North America, food service and international. We know there’s still more work ahead, we know that, but with most of the reinvestment phase behind us, we expect to deliver meaningful, better top line and bottom line performance in Q4 and beyond. I also want to talk briefly about the other piece of news you may have seen yesterday, which was our agreement to sell our Brazil business and this builds on a strong track record. We have portfolio shaping both in acquisitions and divestitures near a third of our portfolio once this is complete over the last number of years and Brazil includes our Yoki and Katano brands and while it’s not on the scale of pet or the yogurt transactions, it’s the same disciplined approach we’ve consistently taken to reshape our portfolio and namely our desire to prioritize our resources investments on brands and platforms where we have the strongest opportunity to generate profitable growth. This deal will enhance our margins and increases the international segment’s focus on our key global platforms including super premium ice cream, Mexican food, snack bars and pet food where we have stronger margin and excellent growth prospects. So with this transaction, as I said, we’ve turned over nearly a third of our net sales since fiscal 2028 as we as we look to fiscal 27 as well. As we said in our press release, our number one goal is going to be to continue to improve our organic sales results while at the same time maintaining our industry leading. As well as the transformation initiative, we have to make sure we’re maintaining efficiency in 2026. We’re really pleased with the pound share competitiveness we’ve had in NAR as well as dollar share in the other segments. As we look at fiscal 27, we’ll aim to improve our dollar share performance in NAR. Really? As we’ve lapped a lot of these price investments and the rest of our remarkability framework elements take hold. So with that, we’re confident in the strategy we have and want to make and we know that we’re making progress, we’ll continue to do that in Q4 and into fiscal 27. And with that, let’s open it up for Q and A.

Operator

As a reminder to ask a question, please press star followed by the number one on your telephone keypad. Our first question comes from Andrew Lazar from Barclays. Please go ahead. Your line is open.


Barclays Analyst

Great. Thanks so much for the question. Good morning, everybody. Morning, Jeff. Yeah, maybe Jeff. By the end of this fiscal year, General Mills will have the bulk of the pricing investments behind it along with, you know, a lot of the remarkability work. You mentioned in your prepared remarks, your expectation for more stable pricing next year as you lap the pricing. So I guess the key metric will be right. Can General Mills return to some level of volume growth in fiscal 27, even in the context of category growth? That remains for now anyway below the longer term level. I was hoping really for whatever you can share on expectations along these lines at this point, knowing you’re not obviously going to get into like specific 27 guidance yet.


Jeff Harmening (Chairman and Chief Executive Officer)

Yeah, I mean, Andrew, you’re on the right track. You know, in terms of our thinking, what I would say is that we look at fiscal 27, our, our goal really is going to be to increase our competitiveness in dollar terms. And this year we certainly did in pound terms as a result of all the pricing actions to be more competitive there. And in 27, you know, we’ll try to, we’ll try to maintain the pounds as well as, and at the same time let our innovation and the renovation on our core and our improved marketing and ROIs on our marketing campaigns do the job of increasing our dollar sales results. And so what we feel good about is that we’ve got the building blocks in place. And look, we’ve taken a step up on new product innovation and renovation this year from where we were before. I would look for us to take another step forward as we look at next year, both on innovation and renovation, particularly in NAR and in and in pet. And so that’ll be our goal. It’s a very volatile world. So what exactly that yields we’ll talk about in June. You know, we, we talked about at Cagny, our category is growing about 1%. But as I said, it’s volatile. We’ll come back with a revised view of what we think our categories will grow. But I can tell you definitively that our goal will be to increase our dollar share competitiveness across NARA as we have done in the other three segments.


Barclays Analyst

Got it. Okay, thanks for that. And then price mix obviously in your categories I think has continued to be positive despite some of your price investments. I guess. What have you seen competitively in your key categories? Sort of along these lines, following your own price investments. Thanks so much.


Kofi Bruce (Chief Financial Officer)

Good morning, Andrew. Thanks for the question. What I would say from a price mix standpoint is we have seen price mix in our categories up a little bit. That is behind some small brand Innovation, but predominantly in terms of our price mix this year. As you know, in the front half, it was about investing to get our base shelf prices right. It was not about promotion, activity, adding frequency or depth. It was about getting below key cliffs and gaps to the competition, getting that right. Which is why our price mix is down as we start to lap that. We laugh it a little bit in the back half of this fiscal year, but really the full lapping will occur in the beginning of next fiscal year. We’re starting and we expect to see that price gap close, starting first with our Pillsbury business, then cereal and then we’ll start to see some of our fruit snacks come along. And we do expect to get back to price mix growth in fiscal 27.


Barclays Analyst

Thank you.


Operator

Our next question comes from Leah Jordan from Goldman Sachs. Please go ahead. Your line is open.


Goldman Sachs Analyst

Hi. Thank you. Good morning. Just kind of building on some of that. You called out the step up in innovation this year. Just can you talk about how that’s been resonating so far? How is the growth tracking for new products versus the 25% goal that you had stated previously? And as we look ahead, I know you called out strong seasonal events for 4Q. What should we be looking for? Or any early commentary on 27 as well.


Jeff Harmening (Chairman and Chief Executive Officer)

Thank you. Yeah, overall I would say, you know, we’re really pleased with our innovation and we’re tracking at about 25%, maybe a little higher in North America retail and between 20 and 25% for the portfolio in aggregate. And I’m really pleased with what we’ve seen out of nar. So maybe I have Dana get kind of give a little bit of color on kind of what’s resonating.


Dana McNabb (Group President of North America Retail and North America PET)

Yeah. From a NAR perspective, I think we’ll land a little bit higher than the 25% growth from new products. We have really leaned into mainstream premium benefits such as protein and fiber. Better tasting news on some of our snacks items and that is running really well. I’ll use Cheerios protein as an example. The biggest brand getting a protein benefit that’s going to be $100 million by the end of this year. Some of the taste renovation that we’ve done on our salty snacks and our fruit snacks that is resonating incredibly well. And then of course big businesses like Pillsbury and Grain where we’ve been able to bring great tasting bake up bigger news or protein news, it’s resonating really well. So we’re getting really good trial and repeat on our new products this year, which of course is Encouraging for next year because it means year two on those items will be helpful to us next year. And then I think the plans next year are even better. We’re going to see another step change in new products. Again, better for you. Functional nutrition. We’re bringing protein to the number one cereal. Honey Nut Cheerios. Our Ghost protein bars, which we’ve just started to launch are turning very well. We’re going to scale that nationally. We make fiber taste great. We’ve got Annie’s fruit snacks coming with fiber, Barbara protein and fiber ratio, Granola and fiber and protein. And then as I look to some of the bold flavors we’re launching, we are launching a new authentic Mexican brand called La Tiara. We’ve got Hot honey coming on Pillsbury biscuits. We’ve got Tabasco, old El Paso kits and protein shells and chimichanga kits. So you name it, we have got really good innovation coming that’s starting to ship this quarter and we will support that with double digit media investment, seasonal events and really good in store and online execution. And I feel confident that now that we’ve got the shelf prices right and we’ve got pounds somewhat stabilized, when we lean into the rest of the remarkable experience framework, we’ll be able to improve our performance next year.

Goldman Sachs Analyst

Okay, great. Thank you. And then just a follow up on Love Made Fresh, you called out an acceleration in recent weeks after some of the changes that you plan to make that you highlighted previously at Cagny. Just any more color on the detail of the magnitude of that acceleration, how we should think about further distribution growth from here. And then also an update on how your on shelf availability is tracking. I know that’s been an area of focus for you guys.

Dana McNabb (Group President of North America Retail and North America PET)

Yes, thank you for the question. I think I’ll just reiterate that we are pleased with where we see the Love Made Fresh launch. So far we’ve made really good progress in a lot of areas. We like our execution. We’re above the 5,000 mark on coolers right now. We think our, our marketing execution has been strong and we are getting great product reviews from retailers and from consumers. As you pointed out, the place that we needed to focus was strengthening our turns at shelf. And so the number one place was you mentioned our on shelf availability. And what we realized is we needed to have our store reps go to the stores every, every week actually to make sure that the coolers were full. And we’ve had that happen now for about three weeks and we have seen a step up in turns in those stores. But again, it’s only three. I wouldn’t want to lean into any specific number there, but we have seen a step up. The other two items that I think are going to be really important to improving our turns are we didn’t have a stand up resealable pack and that pouch format is 55% of fresh sales that is launching now and we have that coming into the marketplace and that’s two times the dollar ring of rolls. So that’s going to really help us from a term standpoint and then from building awareness. We’re really pleased with how we’ve built broad awareness but we got to come down a little bit more in the marketing funnel and reach consumers and pet parents, tell them where we can find the product and do more to convert to trial. So where we’re at the next month is we are definitely going to be adding more coolers. We’re going to make sure on shelf availability in those coolers is better with reps visiting the store once a week. And we’re confident that we will see our turns improve.

Goldman Sachs Analyst

Very helpful. Thank you.

Operator

Our next question comes from David Palmer from Evercore ISI. Please go ahead. Your line is open.

Evercore ISI Analyst

Thank you. Just one quick question. Maybe this one is for Kofi. Just in terms of the gross margin, this quarter was relatively low, maybe lower than what we typically see in a fiscal 3Q versus your overall fiscal year. And I’m just, I’m wondering where you think, you know, if you can have a stable organic sales in fiscal 27, you know, where do you think gross margins can live for this company? And I’m really wondering about, you know, maybe something in the low 30s versus the mid-30s, you know, the streets near 34 for fiscal 27. And I’m just wondering if you do have a stable organic sales, can you get back to mid, mid-30s in terms of gross margins? And thank you.

Kofi Bruce (Chief Financial Officer)

Yeah, David, thanks for the question. I think, I think you’re starting with the kind of the right frame as we see it. We do see stable to growing volume as an enabler for returning and restoring our margins. We’re not ready yet to maybe go on record on where we expect them to be for 27. But I think the path to improvement is certainly paved and aided by volume stability. What we find is when we have that leverage improves, obviously across the enterprise, we get more leverage out of our hmm cost savings, which is always a significant contributor to stability and margin expansion in the middle of the P and L as well as supporting reinvestment in the business. As a reminder, we are in the middle of a multi year transformation initiative which I would expect next year on top of this year will add meaningful, meaningfully to productivity. And as Jeff referenced, we would expect to see improvement, price mix and be able to leverage more full suite of our SRM levers as we step into next year. So I think the combination of all those things will help us start moving back, you know, in terms of where we’d like to be for 27. I’ll go on record as we get out of Q4 and into the first quarter of next year.

Evercore ISI Analyst

Thank you.

Operator

Our next question comes from Michael Lavery from Piper Sandler. Please go ahead. Your line is open.

Piper Sandler Analyst

Thank you. Good morning. Just maybe following up on that and drilling in a little bit more to the inflation piece of it. You cited some inflation pressure this quarter already. Maybe for looking ahead, can you give a sense of what you see for fiscal 27, maybe both with and without potentially elevated oil or diesel or oil derivative costs and just an early sense of kind of how it’s shaping up. And I know you’ve got the hmm savings you’ve given some color on, but you know, how hard does that have to work to offset some of the inflation you might be looking at?

Kofi Bruce (Chief Financial Officer)

Yeah, no, appreciate the question and obviously not prepared to give you sort of the full suite of our assumptions for 27 yet. But our best estimate right now on range of inflation is roughly in line with this year, inclusive of maybe on margin at the far end of the range some more modest pressure from the macro basket labor probably still remains one of the biggest inflationary components of our cost structure. Just as we think about it, either embedded cost, whether it’s in logistics or manufacturing, or pass through even in our transformed commodities. So I’d share that. As a reminder. I think the other critical tent poles are we would expect another year of industry leading hmm, at least 4%. And then as I referenced in my last answer, some significant contributions on top of this year’s significant contributions from our transformation initiatives to help round out the picture. I think it’s important before I leave this point on 27 just to make sure that I give you maybe some of the other sides of the ledger, there will be obviously lapping. The 53rd week, which is a tailwind this year, will turn into a handwind next year. We’ve got one month of US Yogurt results reflected in this year’s results as a reminder that close at the end of June. And so we’ll expect to see that as some headwind and then incentive comp, we would expect to normalize next year. So those are kind of three things on the other side of the ledger as we look at the next year’s temp poll assumptions.

Piper Sandler Analyst

Okay, that’s really helpful. And just as you look at finishing fiscal 26 early in the year, you’d indicated you’d expect positive organic revenue growth in fiscal 4q. Now the language is just improved trends. Could you maybe be specific if positive organic revenue growth is off the table or is that still something that you think is in reach? And if so, would that be total company for nar? Maybe both. What’s the right way to think about how the rest of the year unfolds?

Kofi Bruce (Chief Financial Officer)

Sure. So you think if you kind of track from the midpoint of our guidance, implied in the annual guidance is probably about 75 basis points, 80 basis points at the midpoint of organic sales growth, we’re not while we are expecting continued competitiveness so poundshare and NAR dollar share and the rest of our business to hold, we’re not banking in this guidance on a dramatic turn in market performance in Q4. Instead, we’re expecting a lot of this to come from some mechanical factors. So we referenced in our remarks significant retailer inventory headwind in Q3 that we would expect to flip to a tailwind in Q4, and that’s on its own probably worth about 200 basis points of benefit to organic growth in Q4. And we’d expect the rest of the improvement to come from the reversal of trade expense timing, which was a headwind in Q3 and will become a pretty healthy tailwind as we lapped last year’s Q4.

Piper Sandler Analyst

Okay, great. Thanks so much.

Kofi Bruce (Chief Financial Officer)

You bet.

Operator

Our next question comes from Alexia Howard from Alliance Bernstein. Please go ahead. Your line is open. Good morning, everyone.

Alliance Bernstein Analyst

Can I ask about the food service weakness this time around? You mentioned bakery flour volumes. Is that something that’s likely to persist and what does it tell us about some of those category or channel dynamics in that segment?

Jeff Harmening (Chairman and Chief Executive Officer)

Yeah, I think for Alexia, for food service overall. Let me take a step back and then we’ll get the Flour here eventually as we think about food service eating occasions at home are about 86% and that’s been pretty stable over the last few months or so. Commercial traffic is down about a half a point and non commercial traffic is up about a point. As a reminder, we over index in the non commercial space and as we, as we looked at the third quarter, you see our volume decline a little bit and you see the, the profitability decline. I would remind you on the profit side, about half the decline is the yogurt divestiture. So when you see that big number for that decline, know that about half of it is yogurt and about another about 30, 35% is, is flour. So those are the, those are the two, Those are the 2 biggest items you, as I think about the fourth quarter, we’re not, we’re not thinking that our flower business will come back in the fourth quarter of this year. We’ll see what, we’ll see what happens. Because of the complex nature of distribution and food service, the movement is a little bit slower one way or the other. I am really proud of our competitiveness In K through 12 schools, the fact that we’ve changed to natural colors ahead of when we said we were going to do and we’re competing quite effectively outside of flower. And so I, outside of that one piece of our food service business, pretty pleased with our performance and our level of competitiveness and this forecast we have for the rest of this year. Wouldn’t contemplate becoming more competitive on flower for the next three months.

Alliance Bernstein Analyst

Got it. And then can I follow up on Love Made Fresh? You obviously had the 5,000 cooler goal for the end of January which I think you hit and it’s probably a little bit above that now. Is there another milestone a few months down the road in terms of additional distribution that you can share or at the moment is the focus on getting the turns up before you have another big move forward on the distribution side?

Jeff Harmening (Chairman and Chief Executive Officer)

Yeah. On the alexia on the distribution side I think, you know there are the number of coolers and then there are kind of the distribution within those coolers to the extent we just launched a stand up receivable pouch that you know that’ll add distribution but it may not add the number of stores, it’ll just add the number of skus we have in the stores we’re currently in. And we think that’s going to be the most productive. So our focus really is on enhancing the terms where we are and to the extent we get a little more distribution, that’s okay too. But as Dana talked about, you know, making sure that availability is increased significantly and that our marketing is taking place at the lower end of the funnel, closer to the point of purchase. That’s going to be our focus. We know we have a great product and now we have good distribution. And so now the job to do is make sure we keep improving the terms where we are. As Dana said, three weeks into having more people at the shelf more often, we’re seeing positive benefits of that and we’ll look to see that continue as well as re redoing our marketing mix so that we have more kind of at the point of attack, if you will.

Alliance Bernstein Analyst

Great. Thank you very much. I’ll pass it on.

Operator

Our next question comes from Robert Moscow from TD Cowan. Please go ahead. Your line is open.

TD Cowen Analyst

Hi. Thanks for the question, Dana and Jeff. I was hoping to dive into the high single digit decline in snacks. The salty snacks segment of the market has become much more competitive with price cuts and innovation. And I wanted to know if some of that’s just adjacent to you, but do you think that’s carving into your your brands at all and what gets us back to growth in that segment?

Dana McNabb (Group President of North America Retail and North America PET)

Thanks for the question. Rob. Good morning. I think starting first with salty, we in the categories we compete in are not seeing the same trends as some of the other salty competitors. One of the things that we’re seeing in salty actually is that this is a business where we’ve had three consecutive quarters of pound and dollar share growth. We’re seeing consumers respond to our price investments. We’ve had price pack architecture and then the product renovation that we did to just improve the flavor that’s resonating really well. So our salty business has performed incredibly well and we think that will continue into next year. The challenge that we have seen is really on our hot snack business. That is what’s driven the deceleration that you’re seeing in snacks. And as I’ve talked about before on hot snacks, one of the main drivers of that with Totino is that we did a price pack architecture conversion. We changed a bag to a box. And in today’s economic times when the consumers in stress they just didn’t see any value in that box and we saw sales decline significantly. And so we’re in process of converting that back now. The retailers have been really supportive. We think we’ve got the price right and we’ve really got to up the product quality and how we’re talking about the product to consumer which you’ll see go into marketplace this year. And so that’s our main focus for snacks going forward. On our grain snacks and our fruit snacks, it is about making sure we taste great and we have enough better for you. Innovation with protein and fiber, which we really do. And we’re leaning into the Annie’s business in our snacking categories which we also think will work incredibly well for us. So X Totino’s is snacks stable or how or can you, can you tease it out for us? Excotino snacks overall for us would still be down slightly. That is driven by our grain business. Our Nature Valley business is performing pretty well. We’ve got our proteins doing really well, our wafers business doing really well. And actually Fiber 1 is on the comeback with GLP1 users, but it’s still down. So what we see in grain is that consumers are moving towards more performance nutrition. And so that’s why you’ve really seen us ramp up this ghost bar innovation that again is performing really well. High protein, low sugar. We’re going to scale that nationally right now. We’ll continue to lean into everything that’s working well on Nature Valley and we will Double down with GLP1 users on our Fiber 1 and Protein 1 business.

Jeff Harmening (Chairman and Chief Executive Officer)

Yeah, as Dana said, you know, the biggest challenge really is Totino’s and a little bit in bars as well. Bars is about innovation. We think we have a good story there. You know, unlike what you might have heard from from others on salty snacks, our salty snacks business was up double digits in the third quarter. And I’m really pleased with Dana, her team, what they’ve done in salty snacks, I mean really good price back architecture checks mix is, is flying and our fruit retail sales are flat and so as you, as you decomp the whole thing, you know, we, we’re, we’re really strong and salty snacks and holding our own and fruit and, and the job to do really is primarily on Totinos with a little bit of, with a little bit of bars as well.

TD Cowen Analyst

Got it. Thank you.

Operator

Our next question comes from Scott Marks from Jefferies. Please go ahead. Your line is open.

Jefferies Analyst

Hey, good morning all. Thank you very much for taking our questions. First thing I wanted to ask about is some of the inventory, the retailer inventory adjustments that you called out. Could you just help us understand a little bit, you know, what parts of the NAR and pet business were impacted and then how we should be thinking about the reversal in each of those segments for fiscal Q4.

Dana McNabb (Group President of North America Retail and North America PET)

Yeah, thank you for the question. We definitely have seen some quarter to quarter fluctuations as it relates to Retailer inventories. I would say from a NAR perspective, we typically see our net sales and our retail sales track trends track relatively consistently. They were a little bit off in Q3 and we think that will revert back in Q4. It’s pet where we see the more significant gap. That’s about 3 points. And as we look to Q4, our current guidance does not really contemplate a headwind or a tailwind from PET in Q4. Historically it has been really hard for us to predict shipment timing and retailer inventory in pet. So we just think that the best planning assumption is to assume that it’s going to Be neutral in Q4.

Jefferies Analyst

Understood, thanks for that. And then just wanted to ask a little bit about the guide. Obviously holding the guide implies maybe, maybe a fairly wide range for Q4. So just wondering if you can help us understand maybe the swing factors that could push push results towards one end or the other.

Dana McNabb (Group President of North America Retail and North America PET)

Sure. And certainly the guide on profit is, is maybe even appreciably wider than on the top line. But obviously on the top line, as I referenced earlier, we’re expecting sort of the mechanical factors of the retailer inventory reset which we expect to be to improve our organic growth rate about 200 basis points over Q3, so about 50 basis points in the quarter and then our trade expense timing to kind of carry the rest on the top line. On the bottom line. You know, as Dana just referenced in her remarks, we saw some additional pressure on top of some things that we’d already anticipated going in. So specifically going into the quarter in Q3 we would have expected remarkability investments, divestiture headwinds and trade expense timing comparisons to be a drag. Those kind of accounted for 2/3 of the decline in Q3. And then the other remaining factor that was was frankly still variable and wide. As we came into Cagny and reset guidance were around the shipment time and the weather related factors that impacted shipment timing and supply chain disruptions for us and those added additional pressure to the results and largely account for the width of the range on profit. So our ability to recover fully from some of the cost overhang from the supply chain disruptions, we are making progress, but maybe at the low end of our guidance that would maybe not be able to fully recover. And then at the more positive end of our guidance or the more benign end of our guidance, we’d see a more full recovery in those costs as well as obviously the factors around trade supply chain retailer inventory flipping to tailwinds in the quarter. So, so the last thing I would just leave you with is a reminder that we do expect to see obviously a significant contribution from the 53rd week in Q4 and that’s baked into our guidance as well as a mechanical factor. But really the variability around supply chain and retail inventory recovery would probably account for the width of the range on profit.

Jefferies Analyst

Understood. Thanks very much. You bet.

Operator

Our next question comes from Peter Galbo from Bank of America. Please go ahead. Your line is open.

Bank of America Analyst

Hey guys, good morning. Thanks for taking the questions. Kofi, just back to the question around inflation for next year. I know it’s probably still a little too early to know fully, but a couple of your peers have called out freight as a potential headwind and I think freight even outside of what’s happened in diesel. So maybe you just comment on what you’re seeing in terms of driver tightness or anything that might be a potential hiccup on that side.

Kofi Bruce (Chief Financial Officer)

Okay, fair enough. And Jeff, maybe just I didn’t get a lot of airtime, but the decision on Brazil, I don’t think it comes as a huge surprise, but maybe you can just provide a few more details into just the thinking to kind of exit the market and what drove the decision, you know, this time. Thanks.

Jeff Harmening (Chairman and Chief Executive Officer)

Yeah, the really, you know, it stems from our strategy to really focus on our, our core global brands outside the US and you know, they’re, we have a great right to win with our core global brands. They’re fast growing and they’re, they’re quite profitable. And you know, as we looked at our Brazilian business, our Brazilian team’s done a really nice job. But the, but the challenge for us in Brazil is that not only we underscale but also our portfolio there is not really our global brands. It’s some good local brands brands. But the combination of having these local brands as well as not having the scale means that our Brazilian business has not been very profitable for quite some time. And so the idea to divest of our Brazilian business really is a factor of our focusing on our core global brands, which will enable us, in our international segment, to improve our margin profile, which we’ve done a really nice job of this year. But there’s another step change to go, and investing in this business will help us do that. And while maintaining our growth and increasing our margin profile. So that’s and in doing that, what we’ll be able to do is shift our resources to place we think we have a longer term right to win. It’s going to be more profitable for us.

Okay, thanks very much, Julian. I think that’s all the time we have this morning, so I think we should wrap there. Thanks, everyone, for the good questions and discussion, and we look forward to speaking with you over the course of the coming quarters.

Operator

This concludes today’s conference call. Thank you for your participation. You may now disconnect.

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