Yahoo Finance General Mills Inc. (GIS) Q4 2018 Earnings Conference Call Transcript
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General Mills, Inc. (NYSE: GIS)
Q4 2018 Earnings Conference Call
June 27, 2018, 8:30 a.m. ET
Contents:
Prepared Remarks
Questions and Answers
Call Participants
Prepared Remarks:
Operator:
Ladies and gentlemen, thank you for standing by and welcome to the fourth quarter fiscal 2018 earnings conference call. During the presentation, our participants will be in the listen-only mode. Afterwards, we'll conduct a question and answer session. At that time, if you have a question, please press the 1 followed by the 4 on your telephone. If at any time in the conference you have to reach an operator, you can press the * followed by the 0. As a reminder too, this call is being recorded Wednesday, June 27, 2018. Now, I would like to turn the calls over to Jeff Siemon, Vice President Investor Relations. Please go right ahead, sir.
Jeff Siemon -- Vice President Investor Relations
Thanks, Tommy. And good morning, everybody. I'm here with Jeff Harmening, our chairman and CEO and Don Mulligan, our CFO. And I'll hand the call over to them in a moment. But before I do, I'll cover a few housekeeping items. Our press release on fourth quarter and full year earnings was issued over the wire services earlier this morning. You can find the release and a copy of the slides that supplement this morning's remarks on our investor relations website. And I'll remind you that our remarks this morning will include forward-looking statements that are based on management's current views and assumptions. The second slide in today's presentation list factors that could cause our future results to be different than our current estimates. Included in our press release this morning was a reminder that we'll be reporting results of our newly acquired Blue Buffalo business on a one-month lag to our corporate calendar. We took a similar approach in previous acquisitions including Annie's, Yoki, and Yoplait international.
As a result, our fiscal 2018 financials do not include net sales or operating profit from Blue Buffalo. Though, our 2018 earnings per share do include the impact of higher shares and interest due to acquisition financing. Don will provide details on the impact of Blue Buffalo on our 2019 financials later in the presentation. Finally, I'll note that starting with the first quarter of fiscal '19, we'll be adopting a new presentation of pension, post-retirement, and post-employment benefit expenses. This will separate the service costs from other benefit related expenses or income which will move below operating profit. When we report our first quarter earnings in September, we'll provide you visibility to how the new income statement presentation will impact our 2019 adjusted operating profit growth rate and related guidance, though it will not impact earnings per share or EPS growth. And with that, I'll turn you over to my colleagues, beginning with Jeff.
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Jeffrey Harmening -- Chief Executive Officer
Thanks, Jeff. And good morning, everyone. Fiscal 2018 represented an important step in returning General Mills to sustainable topline growth. We finished the year on a positive note in the fourth quarter, delivering top- and bottom-line results that met or exceeded our most recent guidance, including a third consecutive quarter of organic net sales growth as well as strong growth in profit, margins, and earnings per share. We made significant progress against our global growth priorities in fiscal 2018. We competed more effectively, improving our organic net sales trends by 400 basis points over the course of the year. We enhanced our capability as an e-commerce and strategic revenue management, and we moved to reshape our portfolio for future growth with the acquisition of Blue Buffalo, a fast-growing, highly profitable business that is leading the transformation of the US pet category. We're pleased with our broad-based topline performance.
And we know there is more work to do to address rising costs and deliver better results on the bottom-line. As we turn to fiscal 2019, we'll continue to follow our Consumer First strategy and invest behind our global growth priorities to accelerate our topline growth again. We're also keenly focused on maintaining our efficiency in this more inflationary cost environment. And we have initiatives under way to help protect our profitability and continue to drive cash flow. On slide five, you can see the key financial performance metrics for our fourth quarter. Net sales totaled $3.9 billion, up 2% from last year. Organic net sales increased 1%, driven by positive net price realization and mix across all four segments. We saw particularly good net sales performance on our accelerate platforms, including snack bars, Haagen-Dazs, and Old El Paso. Importantly, we gained share again in US cereal in the quarter, despite a double-digit reduction and merchandising.
And we grew our US yogurt market share in the quarter for the first time in three years. Segment operating profit in the quarter totaled $727 million, up 7% in constant currency reflecting favorable net price realization and mix, benefits from cost savings initiatives and lower SG&A expenses. Adjusted operating profit margin increased 170 basis points versus last year. In addition, adjusted diluted EPS totaled $0.79, an increase of 7% in constant currency. This result included a seven-point headwind from higher net interest and shares related to Blue Buffalo Financing. Turning to the full year results, fiscal 2018 net sales of $15.7 billion were up 1% as reported and were flat to last year on an organic basis. Organic sales growth in our convenience stores and food service and European and Australian segments was offset by the clients in North America retail and Asia and Latin America.
From a platform standpoint, net sales growth was led by our natural and organic, snack bars, and Haagen-Dazs businesses while yogurt declines moderated significantly from year-ago trends. Total segment operating profit of $2.8 billion declined 6% in constant currency. We delivered another strong year of HMM savings, and we reached our restructuring savings goal. However, those results were not enough to offset unexpectedly high freight and raw material inflation, increases in other operating costs, and higher merchandising. Full-year adjusted operating profit was down 90 basis points. Adjusted diluted EPS were $3.11, essentially matching year-ago levels and cost in currency. This included a two-point headwind from incremental interest and shares related to the Blue Buffalo financing. Finally and importantly, we delivered an excellent year of cash generation with free cash flow up 28% over year-ago levels. Earlier this year, we outlined three global priorities to return our business to consistent topline growth.
Compete effectively everywhere we play across all brands and geographies, accelerate growth on four key platforms where we have leading brands, capabilities, and attractive margins and which play in faster-growing categories, and reshape our portfolio for growth through acquisitions and divestitures We made progress against each of these priorities in fiscal 2018. Most of the improvement in our organic sales growth last year was driven by competing more effectively around the world. At the beginning of the year, we said we'd grow our global cereal business in fiscal 2018, and we accomplished that goal. We grew retail sales in market share in the US behind strong marketing campaigns like Good Goes Around on Cheerios and unicorn marshmallow news on Lucky Charms. We secured increased in-store displays at higher price points resulting in improved merchandising performance. And we launched the biggest innovation in the US category this year with chocolate Peanut Butter Cheerios.
TPW net sales were flat in constant currency in fiscal 2018 with growth in Asia and the Middle East offset by declines in western Europe. And we grew cereal in our convenience stores and food service segment including K-12 schools and colleges and universities, leveraging our strong taste brand like Cinnamon Toast Crunch, our broad portfolio of gluten-free cereal, including Cheerios and Chex, and our granola brands led by Cascadian Farms. In US yogurt, our goal was to significantly improve our performance by innovating in faster-growing segments of the category. Thanks in large part to our Oui by Yoplait and Yoplait Mix-in innovations, the two biggest launches in the category in fiscal '18, we dramatically reduced our net sale declines and drove share growth in the fourth quarter. We also competed more effectively in fiscal '18 across a number of regional businesses. We got in the zone on merchandising in the key seasons on our US soup, refrigerated dough, and dessert businesses.
And we supplemented that with target investment, including a new advertising campaign on Pillsbury and a new line of Progresso organic soups. As a result, we saw significant improvement in retail sales performance. And we grew market share and aggregate on these businesses for the year. Also, on our Wanchai Ferry frozen dumplings business in China, we launched premium innovation and expanded distribution helping drive double-digit topline growth in 2018. As consumers rapidly evolve the way they buy their food, our e-commerce capability is becoming increasingly critical to our ability to compete successfully. And we're continuing to leverage our advantage in this space. Our global e-commerce business grew at almost 50% in fiscal 2018, including nearly 70% in North America. Our full basket market shares online continue to over-index relative to the fiscal stores in both the US and Europe.
And General Mills is seen as a key strategic partner for our e-commerce retail customers, bringing differential insights and solutions to drive growth. On our four accelerate platforms, Haagen-Dazs, snack bars, Old El Paso, and natural and organic, we expanded distribution, launched innovation, and increased brand awareness in fiscal 2018, laying the foundation to accelerate their growth in 2019. Haagen-Dazs retail sales were up double digits in 2018 as we broadened distribution of mini cups and stick bars across Europe and Asia, modernized the brand with the rollout of new packaging and a global advertising campaign, and continue to launch remarkable innovation like green tea mochi, peanut butter flavors, and limited edition flower flavors. Retail sales for our snack bars were up low-single digits in fiscal 2018 with growth across all geographies, including North America, Europe, Asia, and Latin America. New layered bars and Soft-Baked Filled Squares generated growth for Nature Valley in the US.
And our businesses in Europe and Mexico leveraged a US product pipeline to accelerate Nature Valley sales. Fiber One has been a drag on results in the US as we right size the business and focus our shelf presence on the best turning items. But we saw excellent growth for Fiber One in Europe and Australia where the brand is relatively new by expanding distribution and driving brand awareness with increased media support. And increased availability and awareness drove strong double-digit growth for Larabar in the US and our Pillsbury snack bar business in India. Old El Paso performance in 2018 was mixed with overall retail sales up low-single digits. Retail sales in Europe and Australia were down modestly as more competitive category dynamics in France and Australia offset good performance in the UK and Nordics.
We drove retail sales growth in North America behind our Anything Goes In campaign as well as execution of initiatives to secure front of store display, allowing us to reach the Old El Paso consumers before they pass the produce aisle. For our North American natural and organic portfolio, retail sales were up mid-single digits in 2018 which represents a slowdown from the prior year as we exited some tail SKUs and channeled specific product lines. We continue to see stronger growth on our core products such as Annie's Mac and Cheese and Bunny Grahams, Cascadian Farms cereal and EPIC meat snacks. Beyond measured channels, our natural and organic brands are driving our course in e-commerce as early adopters for food online tend to over-index toward natural and organic brands. Overall, these four platforms led our growth in fiscal '18, and I am confident we'll see them accelerate in 2019 as we invest to launch innovation, expand distribution, and increase brand awareness.
Our third global growth priority is reshaping our portfolio for growth. And we took a major step in this direction in fiscal 2018 with the acquisition of Blue Buffalo, the leading brand in the fast-growing wholesome and natural pet food category in the US. The transaction closed on April 24th, and we're moving full steam ahead with our transition plans, working to bring General Mills expertise to bear where it's needed and ensuring we stay out of their way when it is not. I am very pleased to report that Blue Buffalo's solid business momentum has continued. Year-to-date through April, net sales continue to grow double digits driven by expansion in the food, drug, and mass channels and aggressive growth in e-commerce which are more than offsetting declines in the pet specialty channel that are in line with our expectations. This spring, we successfully started up our new treat facility in Joplin, Missouri.
And we expect to start production at the new Richmond, Indiana factory at the end of the summer which will help us fuel further distribution expansion. I am confident in our ability to deliver on our plans for continued growth for Blue Buffalo and fiscal 2019. Billy Bishop will share more about those plans at our investor day event in two weeks. On that note, let me review our company's three key priorities for fiscal 2019 which are summarized on slide 11. First, we plan to grow our core by competing more effectively and accelerating our differential growth platforms. We expect to deliver further improvement in yogurt in 2019 as we continue to drive innovation in faster-growing spaces in the category. We're launching some fantastic new products around the world this year, including a new platform in the US that offers consumers a modern approach to weight management by delivering a simply better yogurt with high protein and less sugar.
We'll continue to compete more effectively in cereal in 2019 behind great consumer news and innovation like Cheerios Oat Crunch that's hitting the US shelves this month. We have strong plans across many regional brands, including new product news on Totino's hot snacks, Progresso soup, Betty Crocker desserts, and Wanchai Ferry dumplings. In total, we expect to grow our global net sales from innovation in fiscal 2019. We also expect to improve our growth in emerging markets which underperformed in fiscal 2018. With lingering effects from Brazil's enterprise reporting system implementation now behind us, we expect to see better results in Latin America in 2019. And we're investing in accelerate plans for Haagen-Dazs and snack bars in Asia. On Old El Paso, we'll build on a strong 2018 fourth quarter in Europe and Australia driven by new gluten-free tortillas.
And we'll strengthen our natural and organic business with news on Annie's Mac and Cheese as well as increased distribution on core EPIC meat bars and new EPIC performance bars. We'll tell you more about all of these and other 2019 accelerate initiatives at investor day. Our second key priority is to successfully transition Blue Buffalo into the General Mills portfolio. Our focus on fiscal 2019 is on continuing the expansion into the food, drug, and mass channel while pressing our advantage in e-commerce and maintaining our strength in the important pet specialty channels. We'll also ensure smooth start-up of the Richmond facility. And we'll grow the Blue brand's relevance with pet parents behind superior communication and brand building support. We are confident that by leveraging the best of Blue Buffalo and General Mills, we'll continue this business's track record of double-digit topline growth and even faster bottom-line growth in fiscal 2019.
Our final priority for 2019 is to deliver our commitments on profit and cash by executing with excellence across the organization. To combat elevated input cost inflation, we'll increase our cost of good HMM savings this year, driven by a full year of benefits from our new global sourcing initiative. We'll also begin the process of streamlining our North American logistics network, taking miles out of our system and optimizing inventory levels. Beyond HMM, we'll look to drive price realization by leveraging our strategic revenue management capability. We came a long way in fiscal 2018 to build our SRM expertise. We hired an expert from the beverage industry to lead this effort. We brought in other external hires and combined them with internal talent who know General Mills and our categories. And we have developed systems, analytical tools, and consistent methodology for identifying the best opportunities for price realization by brand and geography.
In fiscal '19, we're taking actions against these opportunities, leveraging a wide range of SRM levers, including price pack architecture changes, trade optimization, mixed management, and list price increases. As we expect slightly higher benefits from assets, we expect slightly higher benefits from price mix in fiscal 2019 compared to last year. We'll also look to build on our track record of cash generation by capitalizing on opportunities to further decrease our core working capital. With those priorities in mind and including the addition of Blue Buffalo, we expect to deliver on the fiscal 2019 targets laid out on slide 12.
Namely, we expect net sales to increase 9% to 10%. We're targeting 6% to 9% growth in adjusted operating profit and constant currency, and we expect constant currency, adjusted diluting earnings per share to range between flat and down 3% Reflecting the investments we're making to build capabilities and accelerate growth as well as impact of purchase accounting from the Blue Buffalo acquisition. With that, I'll turn it over to Don Mulligan to review our fiscal 2018 results and 2019 outlook in more detail.
Donal Mulligan -- Executive Vice President and Chief Financial Officer
Thanks, Jeff. And good morning, everyone. Jeff provided a summary of our fourth quarter financial results. Now I'll share a few additional details starting with the components of net sales growth on slide 14. Organic net sales increased 1% driven by positive net price realization and mix across all four segments, partially offset by lower contributions from organic volume growth. Foreign currency translation was a one point benefit to net sales. Turning to our segment results on slide 15, North America retail, organic net sales were down 1% in the fourth quarter and for the full year. This represents a 400 basis point improvement over our fiscal '17 growth rate, driven by solid, fundamental execution, including better innovation, more compelling marketing and consumer news, and stronger in-store merchandising. These efforts translated into market share growth for seven of our top nine categories in the US in fiscal '18.
At the operating unit level, US snacks posted 2% net sales growth in the quarter and for the full year driven by Nature Valley innovation and product news on Larabar and fruit snacks. US cereal grew net sales 2% in the quarter behind effective consumer news on core brands, including Lucky Charms and seasonal varieties of Cheerios and Reese's Puffs. Full-year US cereal net sales were flat, while we estimate retail sales grew 1% including nonmeasured channels. On a constant currency basis, Canada net sales declined 5% in the quarter, and were down 1% for the full year. US meals and baking net sales were down 2% in the quarter and were flat for the full year with increases in Annie's Mac and Cheese, Totino's hot snacks, and Betty Crocker desserts offsetting declines on Helpers and specialty potatoes.
US yogurt net sales were down 5% in the quarter, marking the fourth consecutive quarter of improvement, as declines on Greek and light segments were partially offset by contributions from Oui by Yoplait and Yoplait Mix-ins innovations. Constant currency segment operating profit increased 7% in the fourth quarter due to positive net price realization and mix, increased HMM savings from global sourcing and lower SC&A expenses, partially offset by input cost inflation. Full year segment operating profit declined 4% in constant currency driven by input cost inflation, higher operational cost, and increased merchandising, partially offset by lower SG&A. In convenience stores and food service, fourth quarter organic net sales were up 5%, led by strong performance on our frozen meals, cereal, and snack platforms. Fruit snacks and our Pillsbury stuffed waffle performed well in C stores, while our cereal offerings continue to generate good growth in food service channels.
Full year organic net sales were up 3%, driven by growth on the focus six platforms and benefits from index pricing on bakery flower. Segment operating profit increased 11% in the fourth quarter, driven by benefits from net price realization and cost savings initiatives, partially offset by higher transportation cost and commodity inflation. Full year segment operating profit declined 2% reflecting higher input cost, partially offset by positive net price realization and benefits from cost savings initiatives that accelerated in the back half of the year. Our Europe and Australia segment finished the fiscal year with positive momentum and delivered a solid year on the topline. Organic net sales increased 4% in the fourth quarter, driven by strong growth on snack bars, Haagen-Dazs, and Old El Paso. Full year organic net sales were up 2%. Constant currency segment operating profit increased 37% in the quarter due to favorable sales mix, net price realization, and benefits from cost savings initiatives.
Full-year segment operating profit was down 22% in constant currency driven by a significant raw material inflation and currency driven inflation on products imported into the UK. In our Asia and Latin America segment, organic net sales were flat in the fourth quarter and down 2% for the full year. Remember that last year's fourth quarter included an extra month of results in Brazil, as we aligned that business to our fiscal calendar. Excluding that difference, organic net sales would have been up double digits in the quarter, led by continued growth in Haagen-Dazs in Asia, Wanchai Ferry in China, and our snacks businesses in India and Latin America. Segment operating profit declined $13 million in the quarter driven by higher input cost and SG&A expenses as well as the impact of the reporting difference. For the full year, segment operating profit was $40 million, compared to $84 million a year ago.
Turning to margins on slide 19, we delivered 70 basis points of improvements in our adjusted gross margin and a 170 basis point increase in our adjusted operating profit margin in the fourth quarter. Driven by positive net price realization and mix, increased benefits from cost savings initiatives, and lower SG&A expenses. Full year margins were down year-over-year due to higher input cost inflation, operational cost, and merchandising, partially offset by HMM savings, positive net price realization, and lower SGA expenses, including an 8% decline in media. Slide 20 summarizes our full year joint venture results. Jeff already shared fiscal '18 sales results for CPW. Haagen-Dazs Japan cost of currency net sales were up 1% for the full year driven by volume growth on core mini cups. Combined after-tax earnings from joint ventures totaled $85 million for the year, down 3% in constant currency, primarily driven by input cost inflation, especially on vanilla for HDJ and restructuring charge at CPW.
Slide 21 summarizes other noteworthy income statement items in the fourth quarter. Restructuring and impairment charges totaled $151 million, including $97 million of impairment charges related to the Yoki, Mountain High, and Immaculate Baking brand and tangible assets. On allocated expenses, excluding $30 million related to acquisition transaction cost as well as other items affecting comparability decreased $23 million from a year ago, driven by various non-recurring items. Net interest expense increased $68 million. Approximately half of that increase was due to incremental interest paid on newly issued debt. And the remaining portion was related to the Bridge Term Loan Financing for the Blue Buffalo acquisition which was excluded from adjusted earnings. The adjusted effective tax rate for the quarter was 26.7% compared to 26.8% a year ago. And average diluted shares outstanding increased 1% in the quarter, reflecting the additional equity raised in March as part of the Blue Buffalo financing.
Slide 22 provides our balance sheet and cash flow highlights for fiscal '18. A year in core working capital balance totaled $580 million, down 27% versus the prior year. And benefits from our terms extension program more than offset higher receivables and inventory balances from consolidating Blue Buffalo's assets acquired in the fourth quarter. Full year operating cash flow was $2.8 billion, up 18% from a year ago, primarily driven by improvements in working capital. Fiscal '18 capital investments totaled $623 million or 4% of company net sales. Full year free cash flow grew 28% to $2.2 billion which represent the 120% conversion rate on our adjusted after-tax earnings. Then we paid $1.1 billion in dividends in fiscal '18. Slide 23 highlights some key financial assumptions for fiscal '19. We expect input cost inflation to be approximately 5%, one point higher than fiscal '18 levels. We're roughly 40% covered on our global commodity positions at this point in the year.
We're targeting cost of goods sold, HMM savings of approximately $450 million which is ahead of year-ago levels, driven by a full year benefit from our global sourcing initiative. We plan significant growth investments in our accelerated platforms, especially Haagen-Dazs and snack bars as well as in global capabilities like e-commerce. These initiatives will enhance our growth in fiscal '19 and will drive further acceleration in 2020 and beyond. Below the profit line, we expect net interest expense to total approximately $550 million, driven by higher debt levels resulting from the Blue Buffalo financing. We're planning for an adjusted, effective tax rate of 23% to 24%, reflecting a full year impact of US tax reform. We anticipate average diluted shares to increase roughly 4%, driven by our equity issuance. And we expect the Blue Buffalo deal will be approximately $0.04 dilutive in fiscal '19, adjusted diluted EPS. This includes $0.09 of non-cash expenses from the inventory step up and purchase price amortization charges.
Based on these assumptions, slide 24 summarizes our fiscal 2019 outlook for our key financial metrics. As Jeff noted, reported net sales are expected to increase 9% to 10% including the addition of Blue Buffalo. We project organic net sales to range between flat and up 1%. On operating profit, we've made a change from our historic practice of guiding to total segment operating profit. And instead, we're providing guidance on adjusted operating profit which includes corporate items. For fiscal '19, we estimate constant currency adjusted operating profit will increase 6% to 9% from the base of $2.7 billion reported in fiscal 2018 with 11 points of growth coming from Blue Buffalo, inclusive of the purchase accounting impact. Constant currency adjusted diluted EPS is expected to range between flat and down 3% from the base of $3.11 earned in fiscal '18. We're targeting free cash flow conversion of at least 95% of adjusted after-tax earnings.
And as Jeff noted earlier, these targets include another year of double-digit topline and even stronger bottom-line growth for Blue Buffalo in fiscal '19, excluding the impact of purchase accounting. Let me also comment briefly on our view of phasing for the year. Blue Buffalo purchase accounting will be a $0.07 drag in EPS in Q1, driven by the inventory step up. In addition, while we entered the year with a high level of input cost inflation, we expect price mix benefits from SRM will build over the course of the year. As a result, we expect constant currency adjusted diluted EPS will be down double digits in the first quarter and will strengthen through the rest of the year. With that, let me turn you back over to Jeff for some closing remarks.
Jeffrey Harmening -- Chief Executive Officer
Thanks, Don. And let me close with some final thoughts. We took an important first step in fiscal 2018, returning our business to sustainable topline growth. And we're leveraging our Compete, Accelerate, and Reshape growth priorities to further improve our growth profile going forward. In 2019, we're investing behind capabilities and accelerate platforms to get our core business back to growth. And we'll successfully transition Blue Buffalo into the portfolio. And there's more work to do on reshaping the portfolio, including divestitures from some growth diluted businesses. We're taking actions on our margins as well. In fiscal 2019, we'll deliver higher HMM savings, and we'll see increased benefits from strategic revenue management and administrative cost savings actions announced last quarter. Still, those won't be enough to fully offset higher inflation and the incremental growth investments we're making this year.
So, we're also working on additional initiatives that will primarily drive efficiencies beyond 2019, including our logistics network reorganization, further enterprise process transformation efforts, and initiative to improve our international margins. And we continue to see opportunities to reduce working capital and drive free cash flow growth. In summary, we're committed to our Consumer First strategy and our global growth priorities. We're also confident that we're on the right path to consistently generate profitable growth and top-tier returns for our shareholders. With that, we'll wrap up our prepared remarks and open the call for questions. Operator, can you please get us started?
Questions and Answers:
Operator:
Thank you very much. And once again, ladies and gentlemen, if you'd like to register a question, just press the one followed by the four on your telephone. You'll hear a three-tone prompt to acknowledge your request. If your question has been answered, to withdraw your registration, press the one followed by the three. Using a speaker phone, turn off your headset before entering your request. One moment please for our first question. And we'll get to our first question on the line from Bryan Spillane with Bank of America. Please go right ahead.
Bryan Spillane -- Bank of America -- Analyst
Hey. Good morning, everyone. Just I guess a question about gross profits in fiscal '19. And I guess two questions. 1) I think if I did the HMM math correct, seems to imply that you'll need between a point and two points of price mix in order to hold gross margins flat for the year. Is that the right way to think about it?
Jeffrey Harmening -- Chief Executive Officer
Yeah, Bryan, it is. As we've said with higher inflation, even at 5%, given our HMM, a pricing of 1% or 2% is enough to combine with HMM to offset that level of inflation. So, that's the way to think about our F19 gross margin.
Bryan Spillane -- Bank of America -- Analyst
Okay. So, as we're modeling it out, we're looking at the operating profit growth expectation for the year. Is the assumption that you'll be able to get hold gross margins flat for this year? Or might that not be the case?
Jeffrey Harmening -- Chief Executive Officer
Well, we expect to be flat or better, especially with the inclusion of Blue Buffalo, with the accretion we'll get from Blue Buffalo in the year.
Bryan Spillane -- Bank of America -- Analyst
Okay. All right. Thank you.
Operator:
Thank you very much. We'll get to our next question on the line. It's from the line of Ken Goldman from JPMorgan. Please go right ahead.
Kenneth Goldman -- JPMorgan -- Analyst
Hi. Good morning. Jeff Harmening, I guess I was curious for your take on this. One of the questions I get on this space, in general, is how do we get out of the pendulum cycle where for a certain period of time, companies in the food space focus on margins. And then for a certain period of time, they focus on sales. And they may have to invest to get those sales. It feels like from a General Mills perspective, right now Mills is focusing more on the topline, willing to sacrifice some margin in the short-term. When do we, in your view, get to the period where we have sustainable topline growth and margin growth where you're not necessarily investing more every year to get to that topline growth. Is that a late 2019 thing? I'm just trying to get a sense for your timing for that because, without that, it's hard to get that bottom-line growth that the space used to have.
Jeffrey Harmening -- Chief Executive Officer
Yeah, Ken. I think it's a fair question. What I would say is that the key for us, as I've talked about, is to try to get to the middle of the boat. On the one side of the boat, all we're gonna do is drive cost savings. And the other side of the boat is you driving growth without regard to what your profit is. I think the key for us is to get to the middle of the boat. And what you've seen from us over this last year and what you'll see next year is a greater emphasis on topline growth than we've had. But it's certainly not at the expense of efficiency. And so, we're driving better topline growth across all of our four segments. And we plan to do that in fiscal '19. But at the same time, we are continuing to drive efficiencies. I think that's why I laid out that HMM's gonna be increasing next year. We took some administrative actions in the fourth quarter to reduce our admin load, and we're looking at redoing our logistics network. And so, for us, the key is to get in the middle of the boat.
As we look at 2019, one of the things that we realize that we'll have to do is we'll have to make some investments in growth capabilities in order to drive that continued growth. I'm really pleased with the 400 base improvement that we made this year. If we can make another 100 basis point improvement next year, that'll give us a long way to get back to sustainable growth. And if you add on top of that another maybe 75 points of organic growth from the growth of Blue Buffalo, you start to get to a place where you're between 1% and 2% growth. So, we feel like we've made significant improvements in '18.
We'll take another big step forward in '19. And my hope is that in the next year after that, we can get back to a sustainable level which is about 3% topline growth. So, we feel like we're making good progress on that front. And the key for us is to invest in the right capabilities, whether it's e-commerce or growth things like capabilities and Haagen-Dazs for driving freezers or things like that and to make sure we're doing that while maintaining our efficiency.
Kenneth Goldman -- JPMorgan -- Analyst
Okay. Thank you very much.
Operator:
Thank you. We'll get to our next question on the line from the line of Chris Growe with Stifel. Please go right ahead with your question.
Christopher Growe -- Stifel Nicolaus & Co., Inc. -- Analyst
Hi. Good morning. I just had a question for you, if I could. First of all, one of the things that was a big factor here for the fourth quarter was freight inflations. I wanna understand perhaps to Don, how much of that 5% inflation would you say is driven by freight cost being up year-over-year?
Donal Mulligan -- Executive Vice President and Chief Financial Officer
Yeah. Our logistics cost we expect to be higher than that 5%. So, it is driving it up. We also expected to see the heavier weight of that in the first part of the year because it accelerated as F18 unfolded. So, both expected to be -- one of the key drivers of our inflation is to be just a little bit more frontloaded.
Christopher Growe -- Stifel Nicolaus & Co., Inc. -- Analyst
Okay. And just a quick question I could ask in relation to Blue Buffalo. You have a lag in the way you're reporting that business. Is there an extra month that comes through in the year in terms of the way you report that extra month that's the month of May, if you will?
Donal Mulligan -- Executive Vice President and Chief Financial Officer
Not in fiscal '19. At some point, we would expect to align it with our reporting calendar, but that's not baked into our fiscal '19 plan or guidance.
Christopher Growe -- Stifel Nicolaus & Co., Inc. -- Analyst
Okay. Thank you very much.
Operator:
Thank you. We'll get to our next question on the line from Akshay Jagdale with Jefferies. Please go right ahead with your question.
Unknown Analyst -- Jefferies -- Analyst
Good morning. This is actually [Louby] on for Akshay. Apologies if I missed this earlier, but how should we think about organic sales growth in the North American retail business for fiscal '19? Are there any puts and takes that we should be thinking about here in the new year?
Jeffrey Harmening -- Chief Executive Officer
We didn't give any guidance for segment growth. And we'll talk more about what we expect out of our segments at our investor meeting in a couple weeks. What I will say is that if you look at our business next year, not only for North America retail but in general, I would expect it to get incrementally better again on yogurt in the US. We were down over 20% in the first quarter and reduce that to minus 5% in the fourth quarter. And we like our innovation coming out. And Oui is doing well.
And so, I would certainly hope and plan in the coming year that our yogurt business will continue to get better. We actually gained share in the fourth quarter. And I think more broadly, as you look at us as an organization, we had a rough first half in Brazil and not great in Asia, but we really accelerated growth in the back half of the year in those geographies behind our growth platforms. Namely, snack bars like in India and the Middle East and Haagen-Dazs and Wanchai Ferry in China. And so, I would expect incremental growth for us to come in our emerging markets, particularly with Brazil as we're lapping the systems implementation and in China where we saw a lot of growth coming in the second half of the year.
Unknown Analyst -- Jefferies -- Analyst
Thanks. So, just to follow up on that, in North America, obviously, the organic sales growth trends over the last several quarters have improved quite a bit. Do you expect in fiscal '19 to see positive organic sales growth in North America?
Jeffrey Harmening -- Chief Executive Officer
Look, we'll talk about that in detail in a couple weeks. And I don't mean to dodge the question, but I guess I'll dodge the question only to say that we'll talk more about that. What I will say is that one of the things I'm really pleased about our North American business is how broad our growth was. We gained share in seven out of nine categories this year, including some of our most important categories. Those categories represent 80% of our business. And I think when some folks talk about the year we had, they talk about lapping a tough year a year ago which is certainly true. And we gained share in soup, and we did better on refrigerated baked goods. But really, the gains were broad-based. So, if you look across our bars business, you look across yogurt, we improved. You look across cereal, we improved. And so, that momentum I think will carry into next year. In particular, I think what gets underestimated is that we came in the year with a distribution drag.
We were down about four, five points of distribution. And we're exiting the fourth quarter with distribution relatively flat. We've been gaining distribution. In fact, we've been gaining distribution in categories like cereal. And so, that'll be a tailwind for us that John Nudi will speak more about in a couple weeks.
Unknown Analyst -- Jefferies -- Analyst
That's helpful. Thanks. I'll get back in queue.
Operator:
Thank you very much. We'll get to our next question on the line. It's from the line of Jason English with Goldman Sachs. Please go right ahead.
Jason English -- Goldman Sachs-Analyst
Hey. Good morning, folks. Thank you for letting me ask a question. I'm actually gonna try to jam two questions in here. First, we came into the year with a lot of talk about this transitory pain on trade spend accrual with this anticipation of a sizable reversal late this year. You didn't make any comments about it, so can you comment now and maybe give us some quantification of how much of that reversal benefit was evident in fourth quarter results?
Donal Mulligan -- Executive Vice President and Chief Financial Officer
Yeah, Jason. This is Don. It came through as we had indicated. Again, it was a year-over-year comparison. So, it wasn't so much what we had to do in '18 as what the quirk of our '17 recognition. So, it came through as we expected. That's what allowed us to bring our operating profit, our segment operating profit in on guidance. So, it came at the magnitude we had guided before.
Jason English -- Goldman Sachs-Analyst
What was that magnitude? Can you remind me?
Jeffrey Harmening -- Chief Executive Officer
And then Jason, it's Jeff. Yeah. It was about 100 basis points in the first half of the year. Negative about a hundred basis points, positive in the second half. And you see that flow through, as we saw a little bit better price mix appreciation in the third quarter. That was a piece of it.
Jason English -- Goldman Sachs-Analyst
That's helpful. Thank you. And the question on the guidance. You're guiding to X buff, EBIT down 4% to 5% I think for the year. But you're guiding organic sales flat to up. You're guiding to -- in response to Spillane's question -- for flattish gross margins. What's driving the underlying, stand-alone, EBIT decline?
Donal Mulligan -- Executive Vice President and Chief Financial Officer
Our guidance for EBIT in total is 6% to 9% growth, 11 points of that coming from Blue Buffalo. So, you can do the math on what the base business is gonna do, down low-single digits, so maybe 5%. So, what's driving that? In total, we're getting the benefit of accretion from Blue Buffalo. We are getting benefit from increased HMM and from our pricing as well. But the headwinds are a higher level of inflation. Embedded in that, of course, is the purchase price accounting for Blue Buffalo.
That's part of the 11% from Blue Buffalo. But most importantly, below the gross margin, we're seeing increase in growth driving capability investments and accelerate investments. Jeff talked about many of these as we think about driving and putting additional investment behind Haagen-Dazs, snack bars, Old El Paso, e-commerce, continuing to build our data analytical capabilities to drive SRM. All those are embedded below the gross margin line. We also, frankly, have about a $40 million incentive true-up year-over-year. And then I mentioned a couple of discreet feeble nonrecurring items in our Q4 corporate that we'll lap as well.
Jason English -- Goldman Sachs-Analyst
Okay. Thank you. I'll pass it on.
Operator:
Thank you very much. We'll get to our next question on the line. It's from the line of Robert Moskow with Credit Suisse. Please go right ahead.
Robert Moskow -- Credit Suisse -- Analyst
Thank you, Jeff and Don. There was a comment during the script saying that your merchandising levels were actually down in fourth quarter. And I guess that means in terms of retail activity. Can you help explain why that was year-over-year? And then what kind of merchandising activity do you expect in fiscal '19? Do you expect to have equal amounts? More amounts? Trying to understand that. And then just one little thing. I think you said your inflation number embeds the purchase accounting increase. That doesn't sound like real commodity inflation. Did I hear that right? Thanks.
Donal Mulligan -- Executive Vice President and Chief Financial Officer
No, you did not hear that right. The 5% doesn't include any impact from the purchase accounting.
Jeffrey Harmening -- Chief Executive Officer
I think Don was saying it'll be 11 points of impact of EBIT growth includes the purchase accounting for Blue Buffalo.
Donal Mulligan -- Executive Vice President and Chief Financial Officer
Right.
Robert Moskow -- Credit Suisse -- Analyst
Okay. Thank you.
Jeffrey Harmening -- Chief Executive Officer
Yeah. Rob, you had a question about merchandising and Q4. I think the reference I had in the script was to our cereal merchandising which was down double digits. And I mention that only because there's been a lot of commentary about how we just bought share in cereal with merchandising up. But I think it's really important that people listening to this call understand that we actually drove share growth in cereal in the fourth quarter with merchandising being down double digits which really speaks to our baseline or our nonpromoted business which was up over 2% during the quarter end. The reason why that's important -- we had really good new products, and our marketing is terrific. I highlighted Lucky Charms and Cheerios.
I could also have highlighted Cinnamon Toast Crunch or Reese's Puffs. And so, as we look at this year, we're really pleased with our cereal business and the fact that we could grow share in the fourth quarter with merchandising and being down double digits I think speaks to what we've been talking about which is the strength of our marketing ideas and our marketing execution in cereal. As we look at next year, John Nudi will talk more about that in a couple weeks. So, I'll leave that to him. But I think we'll see some tailwinds from new products in our US business as we will for our business in general. And also, distribution. I think that's probably something that people underestimate is that we came into this year with some distribution gaps because we discontinued a lot of SKUs. And as we look at fiscal '19, we look to either hold steady or grow our distribution. That's on the basis of our broad topline momentum. And so, John will talk more about that in a couple weeks.
Robert Moskow -- Credit Suisse -- Analyst
I just had a follow-up. When you grow your distribution, does that come with higher slotting fees also?
Jeffrey Harmening -- Chief Executive Officer
In the US, slotting fees are not a huge expense in general. They come with some slotting fees, but that's not a huge cost driver for us.
Robert Moskow -- Credit Suisse -- Analyst
Okay. Thank you.
Operator:
Thank you very much. We'll get to our next question on the line with Pablo Zuanic with SIG. Please go right ahead with your question.
Pablo Zuanic -- SIG -- Analyst
Thank you. Just two questions. Jeff, on the rising front, obviously significant improvement globally and also in the US. Can you just put some context for that? We hear all this commentary about tough retail environment, retailer pressures being difficult for CBG companies to get pricing through. And obviously, pricing was a big labor for your company's quarter in terms of improving those margins. So, just help us understand that. What has changed? Or maybe nothing has changed and the pricing power was there all along, it was just a matter of timing. And then the second very brief question just down on Blue Buffalo, I'm trying to do the math in terms of the underlying sales year-over-year [inaudible].
Obviously, it's adding 9% to sales in fiscal year '19. But we don't know exactly what the base is. So, just some comments in terms of underlying growth there, embedding the projection. And if you can, any comments in terms of using the other plant on Cheerio? I know you said late summer. How aggressive can the entry be into FDM in fiscal year '19, i.e., Walmart? Any color you could give there in terms of sales strengths and outlook for Blue Buffalo would help. Thanks.
Jeffrey Harmening -- Chief Executive Officer
All right, Pablo. Let me try to take those one at a time. And if I miss one, it's not on purpose. But as we look at Q4 in pricing, I think the first thing to recognize when it comes to strategic revenue management, and you see that it's our first quarter we talked about pricing, there really are a lot of levers, including mix. And in our fourth quarter, we drove a lot of positive mix. And I'll give you a couple of examples. In Europe, these accelerators that we've talked about like Haagen-Dazs and Old El Paso and bars, not only are they in fast-growing categories, but they're also mix accretive. And so, to the extent we accelerate growth on those, you see it come through in the pricing. You see it come through in our margins. You see it come through in profitability. And so, in our fourth quarter in Asia and in Europe, you saw a quite a bit of mix. And so, you'll see that. In the US, you can see a pullback in merchandising a little bit in the fourth quarter. And that drove about a point of pricing for us in the fourth quarter.
And so, as we talk and think about pricing, it really is pricing and mix. So, there are a lot of different levers associated with that. In terms of the commentary on what's changed, if you look more broadly, we saw in 2018 about 2% pricing across our categories in North America as opposed to 1% pricing the year before. So, in our categories themselves, we've seen -- again, product mix is a part of that. But we've seen some pricing appreciation. I think it's because the external environment is changed. And we're all seeing higher inflations, whether it's on logistics or whether it's on labor costs and manufacturing or whether it's on input costs. And no one wants to lead with pricing. We're all trying to become more efficient, just like we are with our logistics network and HMM. That's certainly in the first line of defense. But when you get to levels of inflation for us that reach 4% in this current fiscal year, and we're projecting at 5%, you need a little bit of pricing in addition to all those other cost levers to offset it.
And I think we're seeing that broadly. The other theme, and I'm not sure that you asked this, but I think it's important is that there's been a lot of commentary about retailer competition. And there certainly is a lot of retailer competition, in particularly about e-commerce. And I don't want this point to go by, but we grew our e-commerce business by 50% globally this past year, and 70% in North America. And we over-index in the categories we compete and including about a 120 index on our full basket sales relative to what we have in brick and mortar. And so, there's been a lot of talk in the industry about e-commerce being the death of brands and especially food brands. And all we keep doing is growing our e-commerce business and growing our share within it. And so, we're particularly pleased about that. And that's why we're gonna continue to invest in that capability as we look into F19. Then you asked a question about Blue Buffalo. And I'm not gonna give specifics about our distribution plans.
Billy Bishop will talk about Blue Buffalo later. What I will say is that when it comes to supply chain, we've got a treats facility up online a little bit ahead of schedule. And the Richmond facility is due to come online later this summer. Blue Buffalo, I've been really impressed with their supply chain team. They've got really high-quality supply chain team. We're gonna add to that capability because we have more high-quality supply chain folks. And I think for us, the key is that with Blue Buffalo, I'm not sure we're gonna speed up their acceleration to the channel. I think what we're gonna help them do is execute with excellence, not because they don't have good people because they have a lot of good people, and we have a lot of good people. And together, we have enough people to get the job done. And so, we're confident in our FDM expansion plans. At the same time, we think we're growing our share in e-commerce. And that business is growing really quickly.
And we haven't forgotten about the pet specialty channel. And even though that channel is declining, it's still a very important channel for us. And we'll look to distinguish ourselves across the different channels on Blue Buffalo.
Donal Mulligan -- Executive Vice President and Chief Financial Officer
And Pablo, this is Don. Just in terms of the baseline, obviously, you have the Blue's reported results through calendar '17. Think about the accretion you'd expect in Q1 for them. And then that probably finds a pretty good base. We'll be issuing an 8K with the Pro Forma results for the combined company in just a handful of days. And that will give you a better line of sight.
Pablo Zuanic -- SIG -- Analyst
That's helpful. Thanks.
Operator:
Thank you very much. We'll get to our next question on the line from John Baumgartner with Wells Fargo. Please go right ahead.
John Baumgartner -- Wells Fargo Securities -- Analyst
Good morning. Thanks for the question. Jeff, can you speak a bit more to the reinvestment plans for fiscal '19? And how does that F19 plan differ from what was undertaken in F18? What did you learn from this past year's reinvestments in terms of what worked, maybe what was less successful versus expectations?
Jeffrey Harmening -- Chief Executive Officer
Well, what I would say is that we have increased confidence going into F19 that some of the things we put in place, if we double down those investments, that they'll work. And I'll use e-commerce as an example of that. We are gonna increase our investment in e-commerce this coming year because we saw the investments pay off. And that is indicated in our growth rates. But beyond that, I would say that we saw acceleration in the back half of this year, especially the fourth quarter. We put some money against acceleration on Haagen-Dazs and on bars. And we really saw some really strong results in both Asia and in Europe. And I'll give you a couple of examples. We turned on advertising for the first time on Fiber One bars in Australia and saw really good results. And so, we've decided to turn that advertising on in the UK. And my guess is we'll see good results there as well. And on Haagen-Dazs, we've doubled down on some of our new product efforts.
And I'm particularly pleased with how we've progressed in Asia behind our growth in Haagen-Dazs. And in the fourth quarter, we accelerated growth in Europe on Haagen-Dazs behind increased marketing spending as well as increased new product introductions. And so, we'll spend more on R&D, for example on those businesses as we look into the coming year. And then finally, I'll highlight India. We don't talk a lot about India, but we had tremendous growth in bars in India and the Middle East. And we'd like to continue that this next year. And so, what we've done at the end of fiscal '18, which you start to see in our fourth quarter will continue on to next year. And what I will also tell you is that there'll probably be some things that don't work as well as we want. And we're keeping a close eye on all of our investments. And we'll double down on the things that really work well. And if things don't work as well as we want, we'll shift those resources and put against things that are a higher return.
But what I will say is we have increased confidence based on what we saw in the fourth quarter that we're accelerating on the right platforms, and the things that we're doing are making a difference.
John Baumgartner -- Wells Fargo Securities -- Analyst
Great. And then Don, how should we think about advertising spend in F19? Is that up? And by how much? Not sure if I missed that.
Donal Mulligan -- Executive Vice President and Chief Financial Officer
Yeah. For our media spend for next year, we're really talking about a total brand investment. And we do expect it to be up in '19. Media for our base business will likely be flattish. But we'll have additional investment in customer activation and e-commerce, things that don't necessarily get the media line. Obviously, our total brand investment will be up significantly when you roll Blue Buffalo in. So, we have a number of tools that we use to grow our sales. They don't all land in the media line, as we talked about in the last few calls. But in total, we expect our media to be roughly flat at our base business.
John Baumgartner -- Wells Fargo Securities -- Analyst
Okay. Thanks for your time.
Operator:
Thank you very much. We'll get to our next question on the line from Steven Strycula with UBS. Please go right ahead.
Steven Strycula -- UBS -- Analyst
Hi. Good morning. Two part question. First part for Don. Wanna dig into the inflation a little bit in HMM productivity. What were the total HMM savings for fiscal '18?
Jeffrey Harmening -- Chief Executive Officer
About $400 million, Steve. This is Jeff.
Steven Strycula -- UBS -- Analyst
Okay. Gotcha. And then in terms of for your input cost inflation for 5%, is that just for raw materials and packaging? Or does that include the logistics inflation that was up significantly this year? Just wanna know if these are two separate pieces.
Jeffrey Harmening -- Chief Executive Officer
Nope. That's all in. 5% is everything against our cogs.
Steven Strycula -- UBS -- Analyst
Okay. Gotcha. All right. That's helpful. And then for Jeff, just do understand the core US business, and I realize you're not gonna guide to organic sales for next year until the analyst day. But can you give us a little bit of texture as to the different big businesses, whether cereal, yogurt? Should we think about this business for the full year next year? how should this trend relative to how we exited the fourth quarter? Just because the first half of 2018 was a little bit soft, so I just wanna understand how the go forward trend stack up versus how we exited 4Q. Thanks.
Jeffrey Harmening -- Chief Executive Officer
Yeah. Well, I would say one of the -- I'm at the risk of repeating myself. I appreciate the question. I think the thing I'm most pleased about is the broad-based improvement. And what I would hope for next year is that we continue to have broad-based improvement. As I mentioned, yogurt is the one that improved the most throughout the year. And we'll look for that to continue. The business we probably had outsized growth this year was on soup because we had a really tough year the prior year. We made some investments in our soup business. Our competitor didn't have the best year. And so, in 2018, we probably had some outsized growth on our soup business. And maybe we'll repeat that, and maybe we won't. But that one, I wouldn't look for outsize growth on that one only because we had a particular poor year the year before, and we came back with a particularly good year. On the rest of it, I think the key is that we really like our marketing efforts and our new product efforts.
And to the extent that your marketing is good and your innovation is good, those things are repeatable. And I think what you'll see for us next year is that broad base. We think our new product innovation is good. Retailers think it's good which is also important. And it's really good on our big categories, so cereal and snacks and yogurt. And we'll reveal those plans in more depth. But we had good, new product innovation at the end of last year. We'll have good, new product innovation this year. And that'll help us drive distribution growth which will be a tailwind for us as opposed to a year ago. And I'll save the rest for John Nudi in a couple weeks. And he can give you some more detail.
Steven Strycula -- UBS -- Analyst
All right. Thanks.
Jeff Siemon -- Vice President Investor Relations
Hey, Tommy, I think we'll try to get one quick one in here. I know everybody's gonna transition to another call in a couple minutes. So, maybe time for one more.
Operator:
Certainly. We'll proceed with our final question from the line of David Driscoll with Citi Research. Please go right ahead.
Alexis Borden -- Citigroup -- Analyst
Hi, this is Alexis Borden in for David this morning. Just a quick one. How did the truck strike in Brazil affect your fourth quarter if at all? And how might it flow into next year?
Jeffrey Harmening -- Chief Executive Officer
Well, as we think about the fourth quarter, I think it -- first of all, Brazil is less than 3% of our entire business. And it had a little impact on the last few days of the last quarter. And it'll have an impact on the first few days in the next quarter. But overall, as an organization, it's not gonna be a huge factor for us. Certainly, the SAP implementation from last year was a much bigger factor than what we've seen in the trucking so far this year in Brazil.
Alexis Borden -- Citigroup -- Analyst
Okay. Thank you.
Jeff Siemon -- Vice President Investor Relations
All right. That was a quick one. Thanks, Tommy. And thanks, everybody for your attention. Feel free to reach out over the course of the day if you have more questions. I'll be on the phone all day. Thanks again, and we'll talk to you soon.
Operator:
Thank you very much. And thank you, everyone. Ladies and gentlemen, that does conclude the conference call for today. We thank you for your participation and ask that you disconnect your lines. Have a great day, everyone.
Duration: 60 minutes
Call participants:
Jeff Siemon -- Vice President Investor Relations
Jeffrey Harmening -- Chief Executive Officer
Donal Mulligan -- Executive Vice President and Chief Financial Officer
Bryan Spillane -- Bank of America -- Analyst
Kenneth Goldman -- JPMorgan -- Analyst
Christopher Growe -- Stifel Nicolaus & Co., Inc. -- Analyst
Unknown Analyst -- Jefferies -- Analyst
Jason English -- Goldman Sachs -- Analyst
Robert Moskow -- Credit Suisse -- Analyst
Pablo Zuanic -- SIG -- Analyst
John Baumgartner -- Wells Fargo Securities -- Analyst
Steven Strycula -- UBS -- Analyst
Alexis Borden -- Citigroup -- Analyst
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