General Mills Reports Fiscal 2026 First-quarter Results and Reaffirms Full-year Outlook

• First-quarter results were in line with company expectations on organic net sales and slightly ahead of expectations on adjusted operating profit and adjusted diluted earnings per share (EPS)
• Net sales of $4.5 billion decreased 7 percent, including a 4-point headwind from the net impact of divestitures and acquisitions; organic net sales¹ were down 3 percent
• Operating profit of $1.7 billion increased 108 percent, including a $1.05 billion gain on the U.S. yogurt divestiture; adjusted operating profit of $711 million was down 18 percent in constant currency
• Diluted EPS of $2.22 increased 116 percent; adjusted diluted EPS of $0.86 was down 20 percent in constant currency

¹ Please see Note 7 to the Consolidated Financial Statements below for reconciliation of this and other non-GAAP measures used in this release.

General Mills, Inc. (NYSE:GIS) today reported results for its first quarter ended August 24, 2025.

"Our primary goal in fiscal 2026 is to restore organic sales growth by investing in greater value, innovation, and product news for consumers," said General Mills Chairman and Chief Executive Officer Jeff Harmening. "I'm pleased that we're seeing the returns we expected on these investments, helping us grow or hold pound share in 8 of our top 10 U.S. categories while continuing to drive strong competitiveness in foodservice and international markets in the first quarter.

"We will continue to drive further improvement this year behind disciplined execution of our price investments, new advertising campaigns, stronger in-store events, and exciting innovation like Blue Buffalo's launch into fresh pet food that is just now starting to ship to customers," Harmening continued. "We'll also continue to generate world-class efficiency through our Holistic Margin Management productivity program and our global transformation initiative, which will free up more resources to reinvest in growth."

In fiscal 2026, General Mills is investing in its brands to restore volume-driven organic net sales growth, with initiatives that touch all elements of the company's Remarkable Experience Framework: product, packaging, brand communication, omnichannel execution, and consumer value. These efforts are expected to result initially in improved pound growth and market share. The company expects to return to dollar growth after the initial price investment phase, as improved remarkability for consumers drives pound growth with favorable price/mix. The combination of these growth investments, divested earnings from the North American Yogurt divestitures, and normalization of corporate incentive expense is expected to be a headwind to operating profit and EPS in fiscal 2026, but position the company for stronger, more sustainable, and more profitable growth over the long term.

First Quarter Results Summary

• Net sales were down 7 percent to $4.5 billion, including a 4-point headwind from the net impact of divestitures and acquisitions. Organic net sales were down 3 percent, driven primarily by unfavorable organic net price realization and mix reflecting price investments and unfavorable trade expense timing in North America Retail.
• Gross margin was down 90 basis points to 33.9 percent of net sales, driven primarily by higher input costs, partially offset by the favorable impact of net price realization and mix to gross margin, largely due to a product mix benefit from the North American Yogurt divestitures, as well as favorable mark-to-market effects. Adjusted gross margin was down 120 basis points to 34.2 percent of net sales, driven primarily by higher input costs, partially offset by the favorable impact of net price realization and mix to adjusted gross margin, including the product mix benefit from the yogurt divestitures.
• Operating profit of $1.7 billion was up 108 percent, driven primarily by a $1.05 billion gain on divestitures, partially offset by lower gross profit dollars. Operating profit margin of 38.2 percent was up 2,100 basis points. Adjusted operating profit of $711 million was down 18 percent in constant currency, driven primarily by lower adjusted gross profit dollars. This result was slightly ahead of expectations, driven by favorable phasing of input cost inflation and timing benefits in International, both of which are expected to unwind largely in the second quarter. Adjusted operating profit margin was down 210 basis points to 15.7 percent.
• Net earnings attributable to General Mills of $1.2 billion were up 108 percent and diluted EPS was up 116 percent to $2.22, driven primarily by higher operating profit and lower net shares outstanding, partially offset by a higher effective tax rate. Adjusted diluted EPS of $0.86 was down 20 percent in constant currency, driven primarily by lower adjusted operating profit and a higher adjusted effective tax rate, partially offset by lower net shares outstanding.

Operating Segment Results

• The following transactions impacted the comparability of financial results between fiscal 2025 and fiscal 2026: the acquisition of the North American Whitebridge Pet Brands business in the third quarter of fiscal 2025, the divestiture of the Canada Yogurt business in the third quarter of fiscal 2025, and the divestiture of the U.S. Yogurt business in the first quarter of fiscal 2026.
• Tables may not foot due to rounding.

   

North America Retail Segment

First-quarter net sales for General Mills' North America Retail segment were down 13 percent to $2.6 billion, driven primarily by lower pound volume, including an 8-point headwind from the North American Yogurt divestitures. Organic net sales were down 5 percent. Nielsen-measured retail sales were down 4 percent in the quarter, with the 1-point gap to organic net sales growth driven primarily by a previously anticipated headwind from trade expense timing. Increased consumer value, innovation, and product news drove improved pound competitiveness in the quarter, with the segment holding or gaining pound share in 8 of its top 10 U.S. categories. Retail sales growth and market share in pounds was stronger than in dollars in the quarter, as expected, due to investments to address key price cliffs and price gaps in selected categories. Net sales were down double digits for the Big G Cereal & Canada operating unit, which represents the combination of the previous U.S. Morning Foods and Canada operating units, due largely to the yogurt divestitures. Net sales were down high-single digits for U.S. Snacks and down low-single digits for U.S. Meals & Baking Solutions. Segment operating profit of $564 million was down 24 percent as reported and in constant currency, due primarily to lower volume, including the impact of the yogurt divestitures.

North America Pet Segment

First-quarter net sales for the North America Pet segment were up 6 percent to $610 million, including an 11-point benefit from the North American Whitebridge Pet Brands acquisition. Organic net sales were down 5 percent and lagged all-channel retail sales results by approximately 4 points, primarily reflecting shipment timing differences. Including the Whitebridge acquisition, net sales in the quarter were up double digits for cat food and pet treats, and were down mid-single digits for dog food. The segment held pound share in the quarter across dog feeding, cat feeding, and treating. Segment operating profit of $113 million was down 5 percent, driven by higher input costs and higher selling, general, and administrative (SG&A) expenses, including investments ahead of the upcoming fresh pet food launch, partially offset by favorable net price realization and mix.

North America Foodservice Segment

First-quarter net sales for the North America Foodservice segment were down 4 percent to $517 million, including a 5-point headwind from the yogurt divestitures. Organic net sales were up 1 percent, driven by growth in cereal and biscuits. Market index pricing on bakery flour was a 2-point headwind to organic net sales. Segment operating profit of $71 million essentially matched year-ago levels, with the headwind from the yogurt divestitures largely offset by growth on the remaining business.

International Segment

First-quarter net sales for the International segment increased 6 percent to $760 million, including a 3-point benefit from foreign currency exchange. Organic net sales were up 4 percent, driven primarily by growth in India, North Asia, and Europe. Segment operating profit totaled $66 million versus $21 million a year ago, driven primarily by favorable net price realization and mix, partially offset by higher SG&A expenses. Net sales and operating profit results included certain timing benefits totaling approximately 3 percent of net sales that are expected to unwind in the remainder of fiscal 2026, primarily in the second quarter.

Joint Venture Summary

First-quarter constant-currency net sales were down 2 percent for Cereal Partners Worldwide (CPW) and increased 7 percent for Häagen-Dazs Japan (HDJ). Combined after-tax earnings from joint ventures totaled $7 million compared to $19 million a year ago, driven primarily by asset impairment charges and transaction costs related to certain assets held for sale at CPW.

Other Income Statement Items

First-quarter unallocated corporate items totaled $126 million net expense in fiscal 2026 compared to $124 million net expense a year ago (please see Note 4 below for more information on these expenses). Excluding mark-to-market valuation effects and other items affecting comparability, unallocated corporate items totaled $103 million net expense this year compared to $92 million net expense a year ago.

Divestitures gain totaled $1.05 billion in the first quarter, primarily related to the sale of the U.S. yogurt business (please see Note 2 below for more information on this transaction). Restructuring, transformation, impairment, and other exit costs totaled $16 million in the first quarter compared to $2 million a year ago (please see Note 3 below for more information on these charges).

Net interest expense totaled $133 million in the first quarter compared to $124 million a year ago, driven primarily by higher average long-term debt levels. The effective tax rate in the quarter was 25.6 percent compared to 21.8 percent last year (please see Note 6 below for more information on our effective tax rate). The first-quarter adjusted effective tax rate was 24.1 percent compared to 21.9 percent a year ago, driven primarily by certain non-recurring discrete tax benefits in fiscal 2025 and unfavorable earnings mix by jurisdiction in fiscal 2026.

Cash Flow Generation and Cash Returns

Cash provided by operating activities totaled $397 million in the first quarter compared to $624 million a year ago, driven primarily by lower net earnings, including the impact of divested earnings from the North American Yogurt divestitures, as well as unfavorable changes in core working capital. Capital investments totaled $110 million compared to $140 million a year ago. Dividends paid totaled $331 million compared to $338 million a year ago. The company's share repurchase activity in the first quarter totaled $500 million compared to $300 million in share repurchases a year ago. Average diluted shares outstanding in the quarter decreased 4 percent to 542 million.

Fiscal 2026 Outlook

General Mills' top priority in fiscal 2026 is to restore volume-driven organic net sales growth. The company expects category growth to be below its long-term projections, reflecting less benefit from price/mix amid a continued challenging consumer backdrop. To strengthen its categories and market share performance, the company is increasing investment in consumer value, product news, innovation, and brand building, guided by its remarkable experience framework. This includes a significant strategic investment to launch Blue Buffalo into the fast-growing U.S. fresh pet food sub-category in the second quarter. The company expects the combination of these growth investments, input cost inflation (including the impact of tariffs), and normalization of corporate incentive expense will outpace its expectation for Holistic Margin Management cost savings of 5 percent of cost of goods sold, $100 million in global transformation and other efficiency savings, and benefits from a 53^rd week in fiscal 2026. Additionally, the company expects the net impact of the North American Yogurt divestitures and the North American Whitebridge Pet Brands acquisition will reduce adjusted operating profit growth by approximately 5 points in fiscal 2026.

Based on the above assumptions, the company reaffirmed its full-year fiscal 2026 financial targets²:

• Organic net sales are expected to range between down 1 percent and up 1 percent.
• Adjusted operating profit and adjusted diluted EPS are both expected to be down 10 to 15 percent in constant currency.
• Free cash flow conversion is expected to be at least 95 percent of adjusted after-tax earnings.
• The net impact of divestitures, acquisitions, foreign currency exchange, and the 53^rd week is expected to reduce full-year net sales growth by approximately 4 percent. Foreign currency exchange is not expected to have a material impact on adjusted operating profit or adjusted diluted EPS growth.

² Financial targets are provided on a non-GAAP basis because certain information necessary to calculate comparable GAAP measures is not available. Please see Note 7 to the Consolidated Financial Statements below for discussion of the unavailable information.

General Mills will issue pre-recorded management remarks today, September 17, 2025, at approximately 6:30 a.m. Central time (7:30 a.m. Eastern time) and will hold a live, webcasted question and answer session beginning at 8:00 a.m. Central time (9:00 a.m. Eastern time). The pre-recorded remarks and the webcast will be made available at www.generalmills.com/investors.

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that are based on our current expectations and assumptions. These forward-looking statements, including the statements under the caption "Fiscal 2026 Outlook," and statements made by Mr. Harmening, are subject to certain risks and uncertainties that could cause actual results to differ materially from the potential results discussed in the forward-looking statements. In particular, our predictions about future net sales and earnings could be affected by a variety of factors, including: imposed and threatened tariffs by the United States and its trading partners; disruptions or inefficiencies in the supply chain; competitive dynamics in the consumer foods industry and the markets for our products, including new product introductions, advertising activities, pricing actions, and promotional activities of our competitors; economic conditions, including changes in inflation rates, interest rates, tax rates, tariffs, or the availability of capital; product development and innovation; consumer acceptance of new products and product improvements; consumer reaction to pricing actions and changes in promotion levels; acquisitions or dispositions of businesses or assets; changes in capital structure; changes in the legal and regulatory environment, including tax legislation, labeling and advertising regulations, and litigation; impairments in the carrying value of goodwill, other intangible assets, or other long-lived assets, or changes in the useful lives of other intangible assets; changes in accounting standards and the impact of critical accounting estimates; product quality and safety issues, including recalls and product liability; changes in consumer demand for our products; effectiveness of advertising, marketing, and promotional programs; changes in consumer behavior, trends, and preferences, including weight loss trends; consumer perception of health-related issues, including obesity; consolidation in the retail environment; changes in purchasing and inventory levels of significant customers; fluctuations in the cost and availability of supply chain resources, including raw materials, packaging, energy, and transportation; effectiveness of restructuring and cost saving initiatives; volatility in the market value of derivatives used to manage price risk for certain commodities; benefit plan expenses due to changes in plan asset values and discount rates used to determine plan liabilities; failure or breach of our information technology systems; foreign economic conditions, including currency rate fluctuations; and political unrest in foreign markets and economic uncertainty due to terrorism or war. The company undertakes no obligation to publicly revise any forward-looking statement to reflect any future events or circumstances.

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