General Mills’ Top Priority Is to Restore Volume-Driven Organic Sales Growth

Image: General Mills’ shares have been under pressure as of late.

By Brian Nelson, CFA

On June 25, General Mills (GIS) reported mixed fiscal fourth quarter results with revenue coming up short of forecasts, but non-GAAP earnings per share exceeding the consensus estimate. In the fourth quarter, net sales dropped 3% driven by lower pound volume and unfavorable net price realization and mix, while organic sales were also down 3%, in line with expectations. Adjusted gross margin was down 220 basis points. Adjusted operating profit of $622 million was down 22% in constant currency, while its adjusted operating profit margin fell 330 basis points year-over-year. Adjusted diluted earnings per share came in at $0.74, which was down 27% in constant currency.

Management had the following to say about the results:

The investments we made in the second half of fiscal 2025 to bring consumers more value worked as we expected, driving improved volume and pound share trends in the fourth quarter. Our Q4 financial results reflected these incremental investments and finished in line with our updated expectations.

Our number one goal in fiscal 2026 is to restore volume-driven organic sales growth. To do that, we’ll invest further in consumer value, product news, innovation, and brand building, guided by our remarkable experience framework and highlighted by Blue Buffalo’s national launch into fresh pet food coming later in calendar 2025. We’ll continue to drive best-in-class Holistic Margin Management cost savings, and we’ll transform how we work through our global transformation initiative to help unlock more resources for growth.

With a clear framework centered on remarkability and positive early returns from our Q4 investments, I’m confident our fiscal 2026 plans will put us on a path back to driving long-term growth in line with our shareholder return model.

General Mills’ cash provided by operating activities total $2.9 billion in fiscal 2025, down from $3.3 billion a year ago, while capital investments totaled $625 million compared to $774 million a year ago. Full year operating cash flow conversion was 126% of after-tax earnings and free cash flow conversion was 97% of adjusted after-tax earnings. General Mills returned $1.3 billion of dividends and bought back $1.2 billion in stock during fiscal 2025. For fiscal 2026, General Mills’ expects organic net sales to be between down 1% and up 1%. Adjusted operating profit and adjusted diluted earnings per share are both expected to be down 10%-15% in constant currency. Free cash flow conversion is targeted at 95%+ of adjusted after-tax earnings. Though General Mills has a stable of strong brands, the company’s sales and margin performance continues to disappoint. We remain on the sidelines with respect to shares. The company yields 4.8% at the time of this writing.

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