Source: davit kirakosyan
General Mills Exceeds Wall Street Profit Expectations for Q1 2026
General Mills, Inc. (NYSE: GIS), one of the leading multinational manufacturers and marketers of branded consumer foods, disclosed its fiscal first-quarter 2026 results which surpassed Wall Street’s profit expectations. As per the reports, the food manufacturer managed to beat the analysts’ profit prediction, despite the decline in net sales. Furthermore, General Mills has also reaffirmed its guidance for the full fiscal year.
Earnings Overview
The company reported an adjusted earnings per share (EPS) of $0.86, outperforming the analysts’ forecast of $0.81. This indicates a robust financial performance, demonstrating the company’s ability to generate profits that exceed market expectations despite the challenging business environment. However, the company’s net sales declined by 7% to $4.5 billion. This decline is attributable to unfavorable price realization and mix in the North America Retail segment, which put pressure on organic revenue, causing a 3% drop.
Operating Profit and Revenue Details
General Mills’ adjusted operating profit saw a decrease of 18% in constant currency to $711 million, despite this downturn, results were slightly above the company’s internal projections. This shows that even though the company faced certain challenges, it managed to maintain a steady operational efficiency that was in line with its internal targets.
The company’s revenue was in line with expectations at $4.52 billion. However, it experienced a decline organically due to unfavorable price realization and mix in the North America Retail segment. This suggests that the company faced difficulties in achieving a strong sales performance due to certain market and operational conditions.
Impact of Divestiture
During the quarter, General Mills completed the divestiture of its U.S. yogurt business. This strategic move resulted in a significant gain of $1.05 billion, which substantially boosted the operating profit by 108% to $1.7 billion and diluted EPS by 116% to $2.22. This indicates that the company’s decision to divest the yogurt business had a positive impact on its financial performance.
Performance by Division
Looking at the performance by division, the North America Retail sales witnessed a drop of 13%. In contrast, the North America Pet segment saw growth of 6%, driven by an 11-point benefit from the acquisition of Whitebridge Pet Brands. The North America Foodservice sales declined by 4%, and International sales showed an increase of 6%. These mixed results across divisions underscore the varying market dynamics and competitive pressures faced by the company in different segments and geographies.
Outlook for Fiscal 2026
General Mills has reaffirmed its outlook for fiscal 2026. The company projects an organic net sales growth between -1% and +1%. Meanwhile, both the adjusted operating profit and EPS are expected to decline 10% to 15% in constant currency. This outlook suggests that the company anticipates some headwinds in the upcoming periods, but it is prepared to navigate these challenges with its strategic initiatives and operational efficiency.
In conclusion, despite a mixed performance across divisions and a decline in net sales and operating profit, General Mills managed to exceed Wall Street’s profit expectations in Q1 2026. The company’s strategic moves, like the divestiture of its U.S. yogurt business, also played a significant role in strengthening its financial performance. However, the outlook for fiscal 2026 indicates that General Mills expects some challenges ahead. It would be interesting to see how the company manages to navigate these potential obstacles and maintain its profitability in the future.