Shares of General Mills, Inc. (NYSE: GIS) dropped over 4% on Wednesday after the company delivered mixed results for the fourth quarter of 2025 and provided a bleak outlook for the upcoming fiscal year. The branded foods maker anticipates a continued challenging consumer environment and expects higher growth investments to weigh on its bottom line in the coming year.
Earnings beat, revenues miss
In the fourth quarter of 2025, General Mills’ net sales decreased 3% year-over-year to $4.56 billion, missing estimates of $4.6 billion. Organic sales were also down 3%. GAAP earnings per share declined 46% to $0.53. Adjusted EPS fell 27% to $0.74, but managed to surpass projections of $0.71.
Business performance
During the quarter, sales in the North America Retail and North America Foodservice segments decreased 10% and 2% respectively. Within the Retail segment, sales dropped double-digits for US Snacks and mid-single-digits for US Morning Foods and US Meals & Baking Solutions.
Sales in the North America Pet segment increased 12% in Q4, benefiting from the North American Whitebridge Pet Brands acquisition as well as double-digit growth for wet pet food and pet treats and mid-single-digit growth for dry pet food.
In the coming fiscal year, the pet segment is expected to benefit from the company’s efforts to expand its portfolio and grow the Blue Buffalo business, as well as from the pet humanization trend. Sales in the International segment grew 11% in the fourth quarter.
Disappointing outlook
General Mills expects the consumer environment to remain challenging in fiscal year 2026. The company plans to increase its investments in brand-building, innovation and more to boost category growth. These investments coupled with input cost inflation and tariff impacts are anticipated to pressure its profits in the coming year.
GIS expects organic sales for FY2026 to range between down 1% and up 1%. Adjusted EPS is expected to be down 10-15% in constant currency versus FY2025.
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