GENERAL MILLS INC recently released its latest 10-Q report. General Mills, Inc. makes and markets branded consumer foods in the United States and abroad through four segments: North America Retail, International, North America Pet, and North America Foodservice. Its portfolio includes cereal, snacks, meals, baking products, pet food, and ice cream, and it sells through grocery, mass, club, natural, drug, dollar, e-commerce, foodservice, convenience, and pet specialty channels.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
General Mills said its fiscal 2027 priorities are to strengthen organic net sales growth, accelerate enterprise transformation, and maintain disciplined capital allocation. The company expects at least $750 million in total savings from its Holistic Margin Management program, global transformation initiative, and other cost actions in fiscal 2027, as part of a $3 billion cumulative savings target through fiscal 2030. It also said fiscal 2027 will absorb about 9 points of pressure on operating profit and 11 points on EPS from the 53rd week in fiscal 2026, normalization of corporate incentive expense, and the impact of fiscal 2026 divestitures.
For the first quarter ended Aug. 30, 2026, net sales were $4.39 billion, down 3% from $4.52 billion a year earlier. Organic net sales were flat. Operating profit fell 63% to $633.6 million, while adjusted operating profit declined 11% on a constant-currency basis to $634.0 million. Diluted EPS dropped 67% to $0.74, and adjusted diluted EPS fell 13% on a constant-currency basis to $0.75.
Cost of sales declined $82 million to $2.90 billion, mainly because of lower volume, partly offset by higher product rate and mix. The company recorded a $30 million net decrease in cost of sales tied to mark-to-market valuation of commodity positions and grain inventories, versus an $8 million net increase a year earlier. SG&A expenses fell $13 million to $832 million, helped by lower transaction costs.
The prior-year quarter included a $1.054 billion divestiture gain, mainly from the sale of the U.S. yogurt business. In the current quarter, restructuring, transformation, impairment, and other exit costs were $21 million, compared with $16 million a year earlier. General Mills also recorded a $24 million non-cash pre-tax valuation loss related to the planned divestiture of its Brazil business. Interest expense rose to $142 million from $133 million, and the effective tax rate was 24.5% versus 25.6% a year earlier.
North America Retail posted the largest sales decline among the segments. Net sales fell 7% to $2.45 billion from $2.63 billion, and organic net sales declined 3%. Segment operating profit decreased 15% to $479 million from $564 million. Within the segment, Big G Cereal & Canada fell 14%, U.S. Snacks declined 6%, and U.S. Meals & Baking Solutions was flat.
International net sales rose 4% to $794.3 million from $760.2 million, with organic net sales also up 4%. Segment operating profit increased 14% to $75 million from $66 million, supported by volume growth and lower input costs.
North America Pet net sales were essentially flat at $612.8 million versus $610.0 million. Segment operating profit declined 12% to $100 million from $113 million, reflecting higher input costs, lower volume contribution, and higher SG&A.
North America Foodservice figures were not included in the excerpt provided. As a result of these announcements, the company's shares have moved 0.21% on the market, and are now trading at a price of $35.525. Check out the company's full 10-Q submission here.
