General Mills Q1 Profit Plunges, Confirms FY27 Outlook

(RTTNews) - Branded consumer foods maker General Mills, Inc. reported Wednesday sharply lower profit in the first quarter of fiscal 2027, hurt by the absence of prior year's significant gain and weak net sales, both related to the sale of the U.S. yogurt business. Further, the firm maintained fiscal 2027 outlook.

General Mills Chairman and CEO Jeff Harmening stated, "We are off to an encouraging start in fiscal 2027, driving improved topline performance.... We are also executing with discipline in a volatile environment, including delivering industry-leading cost savings through our Holistic Margin Management program and our global Transformation initiative. Based on our progress and the actions underway, we remain confident in our ability to deliver our fiscal 2027 guidance."

For fiscal 2027, the company continues to expect adjusted earnings of $3 to $3.20 per share, and 8 percent to 13 percent year-over-year decline in adjusted operating profit in constant currency.

The company still projects organic net sales to be down 1.5 percent to up 0.5 percent.

For fiscal 2026, General Mills had reported adjusted earnings of $3.55 per share, with an adjusted operating profit of $2.8 billion and net sales of $18.4 billion.

General Mills said it continues to expect to generate at least $750 million in savings from its Holistic Margin Management productivity program, its global transformation initiative, and other cost savings actions in fiscal 2027. This would offset input cost inflation and brand investments.

In the first quarter, net earnings attributable to General Mills fell 67 percent to $397.0 million from last year's $1.20 billion. Earnings per share were $0.74, down 67 percent from $2.22 a year ago.

The prior year's divestitures gain totaled $1.05 billion mainly related to the U.S. Yogurt business.

Adjusted earnings per share were $0.75, compared to $0.86 per share last year, driven primarily by lower adjusted operating profit and higher net interest expense.

Operating profit fell 63 percent from last year to $633.6 million. Operating profit margin of 14.4 percent was down 2,380 basis points.

Adjusted operating profit of $634 million was down 11 percent in constant currency, and adjusted operating profit margin was down 130 basis points to 14.4 percent.

Meanwhile, gross margin was unchanged at 33.9 percent of net sales, with higher input costs offset by favorable mark-to-market effects and favorable net price realization and mix.

Adjusted gross margin was down 90 basis points to 33.3 percent of net sales.

Net sales fell 3 percent to $4.39 billion from prior year's $4.52 billion, driven by the impact of the U.S. yogurt divestiture. Organic net sales essentially matched year-ago levels.

In the first quarter, net sales for North America Retail segment were down 7 percent to $2.4 billion, including a 4-point headwind from the U.S. Yogurt divestiture.

Net sales for the North America Pet segment of $613 million were same as last year.

North America Foodservice segment sales were up 1 percent to $523 million, and net sales for the International segment increased 4 percent to $794 million.

In the pre-market activity on the NYSE, the shares were gaining around 0.34 percent, trading at $35.60, after closing Tuesday's regular trading 0.11 percent higher.

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