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General Mills, Inc. (NYSE: GIS) has reported its fiscal 2026 second-quarter results, showcasing a performance that surpassed market expectations. Despite facing several headwinds, the company managed to achieve an EPS of $1.10 and revenue of $4.9 billion, both exceeding the anticipated figures of $1.02 and $4.78 billion, respectively.
 

General Mills Surpasses Estimates Despite 7% Sales Decline

In the fiscal 2026 second quarter, General Mills reported earnings per share (EPS) of $1.10, surpassing the projected $1.02. Similarly, the company’s revenue reached $4.9 billion, exceeding the expected $4.78 billion. This performance marks a significant achievement for General Mills, considering the 7% decline in net sales to $4.9 billion, which included a 6-point headwind from divestitures and acquisitions. Organic net sales saw a modest decline of 1%, primarily due to unfavorable price realization and mix.

The company’s operating profit stood at $728 million, a 32% decrease from the previous year. However, the adjusted operating profit of $848 million was down by 20% in constant currency. Despite these declines, the adjusted EPS of $1.10 reflected a 21% decrease in constant currency, highlighting the company’s ability to manage expectations effectively amidst challenging conditions.

General Mills’ strategic investments in brand enhancement and product innovation have played a crucial role in restoring organic volume growth in North America Retail, contributing to the strong quarterly performance.

The North America Retail segment experienced a 13% decline in net sales to $2.9 billion, impacted by a 10-point headwind from yogurt divestitures. Despite this, the segment maintained or gained pound share in eight of its top ten U.S. categories, driven by increased consumer value and innovation.

Meanwhile, the North America Pet segment saw an 11% increase in net sales to $660 million, bolstered by the Whitebridge Pet Brands acquisition, although operating profit declined by 12% due to higher input costs and SG&A expenses.
 

Company Reaffirms FY2026 Guidance Amid Margin Pressure

Looking ahead, General Mills has reaffirmed its full-year fiscal 2026 outlook, emphasizing its commitment to restoring volume-driven organic net sales growth. The company anticipates organic net sales to range between a 1% decline and a 1% increase. Adjusted operating profit and adjusted diluted EPS are both expected to decrease by 10% to 15% in constant currency.

General Mills is focused on enhancing its market share performance through increased investment in consumer value, product news, innovation, and brand building. This strategic approach is guided by the company’s framework, which aims to drive sustainable growth.

Notably, the company is making significant investments to launch Blue Buffalo into the U.S. fresh pet food sub-category, a move expected to strengthen its position in the fast-growing market.

The company also anticipates that the combination of growth investments, input cost inflation, and the normalization of corporate incentive expenses will outpace its cost-saving initiatives. These initiatives include Holistic Margin Management cost savings of 5% of the cost of goods sold, global transformation savings, and benefits from a 53rd week in fiscal 2026.

Additionally, the net impact of yogurt divestitures and the Whitebridge Pet Brands acquisition is expected to reduce adjusted operating profit growth by approximately 5 points.

General Mills’ strategic focus on innovation and consumer engagement, coupled with its robust financial management, positions the company for more sustainable and profitable long-term growth. As the company navigates the challenges of fiscal 2026, it remains committed to delivering value to its shareholders while adapting to the evolving market landscape.

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