General Mills Reports 5% Decline in Net Sales and 73% Drop in Operating Profit for Fiscal Year 2026

General Mills, Inc. reported a challenging fiscal year 2026, with consolidated net sales declining by 5% to $18.4 billion compared to the previous year. The decrease was attributed to a 2% drop in organic net sales, which reflects the company's performance excluding the effects of acquisitions and divestitures. Operating profit fell sharply by 73% to $886 million, primarily due to significant non-cash impairment charges totaling $1.75 billion related to goodwill and brand intangible assets. The diluted loss per share was $(0.16), a stark contrast to the earnings per share of $4.10 reported in fiscal 2025.

The company's financial performance was impacted by several strategic decisions and market conditions. Notably, General Mills divested its North American yogurt business, which contributed to a gain of $1.05 billion, but this was offset by the impairment charges and a valuation loss related to the planned divestiture of its Brazil business. The company also faced increased input costs and a decline in contributions from volume growth, which further pressured profitability. In response to these challenges, General Mills implemented a Holistic Margin Management initiative aimed at generating cost savings and improving operational efficiency.

Operationally, General Mills reported mixed results across its segments. The North America Retail segment saw net sales decrease by 11% to $10.6 billion, driven by a decline in volume growth. In contrast, the International segment experienced a 9% increase in net sales to $3.0 billion, bolstered by favorable foreign currency exchange impacts and volume growth. The North America Pet segment's net sales rose by 6% to $2.6 billion, aided by the acquisition of Whitebridge Pet Brands, although organic net sales growth slowed. The North America Foodservice segment's net sales decreased by 6% to $2.2 billion, reflecting similar challenges in volume growth.

Looking ahead, General Mills anticipates continued challenges in fiscal 2027, projecting organic net sales to range from a decline of 1.5% to an increase of 0.5%. The company expects adjusted operating profit to decrease by 8% to 13% in constant currency, with adjusted diluted earnings per share forecasted between $3.00 and $3.20. To address input cost inflation and support growth investments, General Mills aims to achieve $3 billion in cumulative cost savings by fiscal 2030, with a focus on enhancing brand remarkability and driving product innovation. The company remains committed to its Accelerate strategy, which emphasizes brand building, innovation, and operational efficiency.