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

• As expected, second-quarter and six-month results included significant impacts from investments to improve brand remarkability, the North American yogurt divestitures, and an unfavorable trade expense timing comparison
• Net sales of $4.9 billion were down 7 percent, including a 6-point headwind from the net impact of divestitures and acquisitions; organic net sales¹ were down 1 percent
• Operating profit of $728 million was down 32 percent; adjusted operating profit of $848 million was down 20 percent in constant currency
• Diluted earnings per share (EPS) of $0.78 were down 45 percent; adjusted diluted EPS of $1.10 was down 21 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 second quarter ended November 23, 2025. Results for the quarter and six-month period included the previously expected impacts of investments to improve brand remarkability, the North American yogurt divestitures, and an unfavorable trade expense timing comparison from fiscal 2025.

"Our team continued to execute exceptionally well in a volatile operating environment, delivering results ahead of our expectations in the second quarter," said General Mills Chairman and Chief Executive Officer Jeff Harmening. "Our investments in remarkability are working, helping restore organic volume growth in North America Retail this quarter and driving strong competitiveness across each of our segments. With improved momentum in the first half and confidence in our plans to drive further improvement in the rest of the year, we are reaffirming our full-year fiscal 2026 outlook."

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. This includes strong innovation plans that are expected to generate a 25 percent increase in sales from new products in fiscal 2026. The investments in remarkability are initially driving improved pound growth and market share results. 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.

Second Quarter Results Summary

• Net sales were down 7 percent to $4.9 billion, including a 6-point headwind from the net impact of divestitures and acquisitions. Organic net sales were down 1 percent, driven by unfavorable organic net price realization and mix.
• Gross margin was down 210 basis points to 34.8 percent of net sales, driven by higher input costs and unfavorable mark-to-market effects, 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. Adjusted gross margin was down 150 basis points to 34.8 percent of net sales, driven by higher input costs, partially offset by the favorable impact of net price realization and mix to gross margin, including the product mix benefit from the yogurt divestitures.
• Operating profit of $728 million was down 32 percent, driven primarily by lower gross profit dollars and higher restructuring, transformation, impairment, and other exit costs. Operating profit margin of 15.0 percent was down 560 basis points. Adjusted operating profit of $848 million was down 20 percent in constant currency, driven by lower adjusted gross profit dollars. Adjusted operating profit margin was down 290 basis points to 17.4 percent.
• Net earnings attributable to General Mills of $413 million were down 48 percent and diluted EPS was down 45 percent to $0.78, driven primarily by lower operating profit, lower after-tax earnings from joint ventures, and a higher effective tax rate, partially offset by lower net shares outstanding. Adjusted diluted EPS of $1.10 was down 21 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.

Six Month Results Summary

• Net sales of $9.4 billion were down 7 percent, including a 5-point headwind from the net impact of divestitures and acquisitions. Organic net sales were down 2 percent.
• Gross margin was down 150 basis points to 34.4 percent of net sales, driven by higher input costs, partially offset by the favorable impact of net price realization and mix to gross margin, including the product mix benefit from the yogurt divestitures. Adjusted gross margin was down 140 basis points to 34.5 percent of net sales.
• Operating profit of $2.45 billion was up 29 percent, driven primarily by a $1.05 billion gain on divestitures, partially offset by lower gross profit dollars and higher restructuring, transformation, impairment, and other exit costs. Operating profit margin of 26.2 percent was up 730 basis points. Adjusted operating profit of $1.6 billion was down 19 percent in constant currency, driven by lower adjusted gross profit dollars. Adjusted operating profit margin was down 250 basis points to 16.6 percent.
• Net earnings attributable to General Mills of $1.6 billion were up 18 percent and diluted EPS was up 22 percent to $3.00, driven primarily by higher operating profit and lower net shares outstanding, partially offset by lower after-tax earnings from joint ventures and a higher effective tax rate. Adjusted diluted EPS of $1.96 was down 21 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 year-to-date financial results between fiscal 2025 and fiscal 2026: the divestiture of the U.S. Yogurt business in the first quarter of fiscal 2026, the divestiture of the Canada Yogurt business in the third quarter of fiscal 2025, and the acquisition of the North American Whitebridge Pet Brands business in the third quarter of fiscal 2025.
• Tables may not foot due to rounding.

North America Retail Segment

Second-quarter net sales for General Mills' North America Retail segment were down 13 percent to $2.9 billion, including a 10-point headwind from the North American Yogurt divestitures. Net sales were down double digits for the Big G Cereal & Canada operating unit, down mid-single digits for U.S. Snacks, and down low-single digits for U.S. Meals & Baking Solutions. Organic net sales were down 3 percent. Increased consumer value, innovation, and product news drove strong 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 were stronger than in dollars in the quarter, as expected, due to investments to address key price cliffs and price gaps in selected categories. Segment operating profit of $682 million was down 21 percent as reported and in constant currency, due primarily to lower volume, including the impact of the yogurt divestitures.

Through six months, North America Retail segment net sales were down 13 percent to $5.5 billion, including a 9-point headwind from divestitures. Organic net sales were down 4 percent. Segment operating profit of $1.2 billion was down 22 percent as reported and in constant currency, driven primarily by lower volume, including the impact of the yogurt divestitures.

North America Pet Segment

Second-quarter net sales for the North America Pet segment were up 11 percent to $660 million, including a 10-point benefit from the North American Whitebridge Pet Brands acquisition. Net sales were up double digits for both cat food and pet treats, and were down low-single digits for dog food. Organic net sales were up 1 percent. The segment generated all-channel retail sales growth of approximately 1 percent and held share in the quarter. Segment operating profit of $123 million was down 12 percent, driven by higher input costs and higher selling, general, and administrative (SG&A) expenses, including investments to support the launch of Love Made Fresh, partially offset by favorable net price realization and mix and higher volume.

Through six months, North America Pet segment net sales were up 8 percent to $1.3 billion, including a 10-point benefit from the North American Whitebridge Pet Brands acquisition. Organic net sales were down 2 percent. Segment operating profit was down 9 percent to $236 million, driven by higher input costs and higher SG&A expenses, partially offset by favorable net price realization and mix and higher volume.

North America Foodservice Segment

Second-quarter net sales for the North America Foodservice segment were down 8 percent to $582 million, including a 7-point headwind from the yogurt divestitures. Organic net sales essentially matched year-ago levels, with growth in frozen baked goods, cereal, and frozen meals offset by a decline in bakery flour, including a 3-point headwind from index pricing. The segment delivered another quarter of strong competitiveness, holding or gaining share in 88 percent of its priority businesses. Segment operating profit was down 12 percent to $105 million, driven by the headwind from the yogurt divestitures, partially offset by growth on the remaining business.

Through six months, North America Foodservice net sales were down 6 percent to $1.1 billion, including a 6-point headwind from the yogurt divestitures. Organic net sales essentially matched year-ago levels. Segment operating profit was down 8 percent to $175 million, reflecting the headwind from the yogurt divestitures, partially offset by growth on the remaining business.

International Segment

Second-quarter net sales for the International segment increased 6 percent to $729 million, including a 2-point benefit from foreign currency exchange. Organic net sales were up 4 percent, driven by growth in Brazil, China, India, and North Asia. The segment maintained its strong competitive performance, holding or gaining share in 54 percent of its priority businesses. Segment operating profit of $28 million was up 19 percent as reported and up 30 percent in constant currency, driven primarily by favorable net price realization and mix and higher volume, partially offset by higher SG&A expenses.

Through six months, International net sales were up 6 percent to $1.5 billion, including a 2-point benefit from foreign currency exchange. Organic net sales were up 4 percent. Segment operating profit more than doubled to $94 million, driven primarily by favorable net price realization and mix, partially offset by higher SG&A expenses.

Joint Venture Summary

Second-quarter constant-currency net sales were down 1 percent for Cereal Partners Worldwide (CPW) and essentially matched year-ago levels for Häagen-Dazs Japan (HDJ). Combined after-tax loss from joint ventures totaled $60 million in the quarter, compared to after-tax earnings of $30 million in the prior year, driven by the Company's $85 million pre-tax share of a non-cash goodwill impairment charge related to the CPW Australia market.

Other Income Statement Items

Second-quarter unallocated corporate items totaled $88 million net expense in fiscal 2026 compared to $65 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 $91 million net expense this year compared to $80 million net expense a year ago.

Restructuring, transformation, impairment, and other exit costs totaled $122 million in the second quarter compared to $1 million a year ago (please see Note 3 below for more information on these charges).

Net interest expense totaled $126 million in the second quarter compared to $125 million a year ago. The effective tax rate in the quarter was 23.3 percent compared to 20.1 percent last year (please see Note 6 below for more information on our effective tax rate). The second-quarter adjusted effective tax rate was 23.3 percent compared to 20.1 percent a year ago, driven primarily by unfavorable earnings mix by jurisdiction in fiscal 2026 and certain non-recurring discrete tax benefits in fiscal 2025.

Cash Flow Generation and Cash Returns

Cash provided by operating activities totaled $1.2 billion through six months of fiscal 2026 compared to $1.8 billion a year ago, driven primarily by lower net earnings excluding the pre-tax gain on divestitures, partially offset by the change in after-tax joint venture earnings and the change in restructuring, transformation, impairment, and other exit costs. Capital investments totaled $253 million compared to $301 million a year ago. Dividends paid totaled $659 million compared to $676 million a year ago. The Company's share repurchase activity through six months of fiscal 2026 totaled $500 million compared to $600 million in share repurchases a year ago. Average diluted shares outstanding in the first half decreased 4 percent to 540 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. 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 53rd 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 53rd 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, December 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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Significant Items Impacting Comparability

Several measures below are presented on an adjusted basis. The adjustments are either items resulting from infrequently occurring events or items that, in management's judgment, significantly affect the year-to-year assessment of operating results.

The following are descriptions of significant items impacting comparability of our results.

Divestitures gain

Divestitures gain recorded in fiscal 2026 related to the sale of our United States yogurt business in fiscal 2026 and Canada yogurt business in fiscal 2025. Please see Note 2.

CPW asset impairments, transaction costs, and restructuring charges

CPW non-cash goodwill impairment charge related to the Australian market, and other asset impairment charges and transaction costs related to certain assets held for sale recorded in fiscal 2026. CPW restructuring charges related to previously announced restructuring actions in fiscal 2025.

Restructuring and transformation charges

Restructuring and transformation charges related to supply chain actions and previously announced actions recorded in fiscal 2026. Restructuring charges related to previously announced restructuring actions recorded in fiscal 2025. Please see Note 3.

Other intangible assets impairment

Non-cash impairment charge related to our Uncle Toby's brand intangible asset in fiscal 2026. Please see Note 3.

Transaction costs

Fiscal 2026 transaction costs related to the sale of our United States yogurt business. Fiscal 2025 transaction costs related to the Whitebridge Pet Brands acquisition and the sale of our North American yogurt businesses. Please see Note 2.

Investment activity, net

Valuation adjustments of certain corporate investments in fiscal 2026 and fiscal 2025.

Mark-to-market effects

Net mark-to-market valuation of certain commodity positions recognized in unallocated corporate items. Please see Note 4.

Acquisition integration costs

Integration costs related to the Whitebridge Pet Brands acquisition in fiscal 2025 and the acquisition of a pet food business in Europe in fiscal 2024 recorded in fiscal 2026 and fiscal 2025. Please see Note 2.

Project-related costs

Restructuring initiative project-related costs related to previously announced restructuring actions recorded in fiscal 2025.

Adjusted Operating Profit Growth and Related Constant-currency Growth Rate

This measure is used in reporting to our Board of Directors and executive management and as a component of the measurement of our performance for incentive compensation purposes. We believe that this measure provides useful information to investors because it is the operating profit measure we use to evaluate operating profit performance on a comparable year-to-year basis. The measure is evaluated on a constant-currency basis by excluding the effect that foreign currency exchange rate fluctuations have on year-to-year comparability given the volatility in foreign currency exchange rates. 

Our adjusted operating profit growth on a constant-currency basis is calculated as follows:

Adjusted Diluted EPS and Related Constant-currency Growth Rate

This measure is used in reporting to our Board of Directors and executive management. We believe that this measure provides useful information to investors because it is the profitability measure we use to evaluate earnings performance on a comparable year-to-year basis.

The reconciliation of our GAAP measure, diluted EPS, to adjusted diluted EPS and the related constant-currency growth rates follows:

Adjusted Earnings Comparisons as a Percent of Net Sales

We believe that these measures provide useful information to investors because they are important for assessing our adjusted earnings comparisons as a percent of net sales on a comparable year-to-year basis.

Our adjusted earnings comparisons as a percent of net sales are calculated as follows: