General Mills, Inc. (NYSE:GIS) Q1 2020 Earnings Conference Call Transcript
Sep 18, 2019 • 08:30 am ET
Jeffrey L. Harmening
and we delivered positive results here in Q1. And our final priority for 2020 is to maintain a disciplined focus on cash to achieve our fiscal 20 leverage target and we had a good start to the year on this measure as well. With these priorities in mind, I'll cover our Q1 segment results in detail. With a particular focus on the top line before turning it over to Don to review our performance on margins and cash flow.
Turning to the components of net sales growth on Slide 7, organic net sales were down 1% from a year ago, driven by a lower volume, partially offset by a positive price mix across all five segments. Foreign exchange was a one point drag in the quarter. First quarter organic sales for North America Retail were flat compared to the prior year which was a two point improvement on our fourth quarter trend. And we delivered net sales improvement across most of our operating units. In U.S. Cereal, we maintain our positive momentum with net sales up 1%. We saw early traction in U.S. snacks with net sales down 1% compared to a 4% decline in fiscal 2019.
U.S. Yogurt net sales were flat to last year and I'm happy to say that our strategic revenue management actions drove one point of positive price mix. Constant currency segment operating profit increased 2% in the first quarter driven by benefits from HMM cost savings and positive price mix, partially offset by input cost inflation and higher brand-building investments. Our end market performance in North America -- North America Retail also stepped up in Q1.
As you can see on Slide 9, we've driven a steady improvement in our two year retail sales trends since fiscal '17. In the first quarter, our U.S. Nielsen-measured retail sales were flat versus a year ago and we held our -- held or grew share in 5 of our 10 largest categories including Cereal, Refrigerated Dough and soup. We know we still have room to improve, including some key categories like yogurt and snacks and we'll continue to focus there to strengthen our overall growth profile.
Let's dive into a bit deeper into our first quarter performance in North America Retail starting with Cereal. We grew U.S. Yogurt retail sales in fiscal '18 and '19 and a result accelerated in the first quarter with retail sales up 1%. We outpaced the category, expanding our share leadership position through increased investment behind compelling consumer ideas such as our cereal heart health campaign and strong in-store execution and events. We also had another impressive quarter on innovation, with the top five new products in the category, including Blueberry Cheerios and Cinnamon Toast Crunch Churros. I am very pleased by our performance in U.S. cereal, and I'm excited about the plans we have for the rest of the year to continue our momentum. We're executing well on the fundamentals of innovation and brand building, and we'll continue to drive the