Figures in Line with Expectations

For the fourth quarter of fiscal year 2026, General Mills posted net sales of $4.6 billion, up 1% year-over-year, while organic net sales were in line with the previous year. Revenue growth was driven primarily by the 53rd week, which added 7 percentage points; exchange rates contributed 1 percentage point; and the net impact of acquisitions and divestitures had a negative effect of 7 percentage points. The gross margin rose to 34.8%, and the adjusted gross margin to 34.2%, both primarily due to favorable pricing and product mix. However, the company reported an operating loss of $2.1 billion and a diluted loss per share of $3.74, as the results include $1.8 billion in non-cash write-downs of past acquisitions, brand assets, and a $1.0 billion non-cash loss related to the planned divestiture of its Brazilian business.[1]

On an adjusted basis, the quarter looks significantly better. Adjusted operating income reached $705 million, representing 13% growth in constant currency, and the adjusted operating margin increased to 15.3%. Adjusted diluted earnings per share rose to $0.95, a 27% increase in constant currency, driven by higher adjusted operating income, a lower adjusted effective tax rate, and a lower number of shares outstanding, partially offset by higher net interest expense. Fiscal Year 2026, a 53-week year, generated full-year net revenue of $18.4 billion, down 5% year-over-year, with organic net revenue down 2%. The full-year gross margin declined to 33.6%, and the adjusted gross margin to 33.5%, primarily due to higher input costs, partially offset by favorable pricing and mix, including the impact of the divestiture of the yogurt business in North America.1

Full-Year Results

For fiscal year 2026, General Mills reported operating income of $886 million, a 73% decrease from $3.3 billion in 2025, primarily due to past acquisitions and brand impairments, an impairment charge related to the Brazilian business, and lower gross profit. The operating margin fell from 17.0% to 4.8% of revenue, clearly illustrating the impact of these one-time accounting items on reported results. Adjusted operating income for the year reached $2.8 billion, a 16% decline in constant currency, while the adjusted operating margin decreased to 15.3% of revenue. At the net income level, the company reported a full-year net loss for General Mills of $88 million, representing a loss of $0.16 per diluted share, compared to earnings of $4.10 per share last year.1

On an adjusted basis, General Mills continues to operate profitably. Adjusted diluted earnings per share for fiscal year 2026 reached $3.55, a 16% decline in constant currency compared to the previous year. The decline in adjusted EPS is primarily due to lower adjusted operating income, while a lower number of shares outstanding partially offsets this. The GAAP effective tax rate rose significantly to 102.2% from 20.2% last year, as a large accounting write-down of brand value and past acquisitions could not be claimed for tax purposes, while the adjusted effective tax rate rose only slightly to 21.1%.1

Segments

The North American retail segment reported fourth-quarter revenue of $2.5 billion, a 4% decline, with a 10-point negative impact from sales and a 7-point positive impact from Week 53. Organic net sales in this segment were essentially flat compared to last year, while Nielsen-measured retail sales declined by 4%, with the difference explained by the timing of trade spend and retailer inventory levels. Segment operating profit in Q4 reached $506 million and increased by 7% year-over-year, supported by favorable pricing, mix, and lower SG&A expenses, despite lower volume, including the impact of the yogurt divestiture and higher input costs. For the full year 2026, this segment generated revenue of $10.6 billion, a decline of 11%, with the segment’s organic net revenue falling by 3% and segment operating profit decreasing to $2.2 billion, a 20% decline.1

The International segment serves as a counterbalance to the domestic business. In the fourth quarter, it generated revenue of $858 million, representing 16% year-over-year growth, with an 8-point contribution from Week 53 and a 5-point contribution from exchange rates. Organic net revenue in the international segment rose by 3%, driven by growth in Brazil, Europe, India, and China. Segment operating profit in Q4 reached $61 million, representing 81% growth on a reported basis and 72% growth on a constant-currency basis. For the full year 2026, the international segment generated revenue of $3.0 billion, an increase of 9%, with organic net revenue rising 3% and full-year segment operating profit climbing to $189 million, an increase of 96%.1

Cash Flow and Capital

Cash flow from operations in fiscal year 2026 reached $2.2 billion, compared to $2.9 billion the previous year; the decline was primarily due to changes in liabilities, other current assets, and liabilities. Capital expenditure fell to $540 million from $625 million, reflecting lower capital spending. The operating cash flow-to-net income ratio is not meaningful given the annual loss, but the free cash flow-to-adjusted net income ratio reached 85%. Dividends paid in 2026 fell by 2% to $1.3 billion, and share repurchases totaled $500 million compared to $1.2 billion in 2025, while the average number of diluted shares decreased by 4% to 538 million.1

On the balance sheet, General Mills reported total assets of $30.0 billion, compared to $33.1 billion last year, with the book value of brands and past acquisitions falling from $15.6 billion to $14.1 billion and other intangible assets from $7.1 billion to $6.7 billion due to amortization. Total liabilities decreased from $23.9 billion to $22.6 billion, while shareholders’ equity fell from $9.2 billion to $7.4 billion, reflecting the year’s net loss and significant impairment charges on brands and past acquisitions. The Board of Directors declared a quarterly dividend of $0.61 per share, payable on August 3, 2026, to shareholders of record as of July 10, 2026; General Mills and its predecessor have paid dividends without interruption for 127 years.1

Plan Through Fiscal Year 2030

General Mills states that fiscal year 2027 will focus on improving organic growth and increasing efficiency. The company aims to enhance the appeal and memorability of its brands through product, packaging, communication, execution across all sales channels, and overall value for consumers. At the same time, it announced a goal to gradually achieve total cost savings of $3 billion by fiscal year 2030, of which approximately $2 billion will come from Holistic Margin Management productivity initiatives and approximately $1 billion from a global transformation initiative and other cost efficiencies. The company expects to deliver at least $750 million in savings under this framework as early as 2027.[2] [2]

The outlook for fiscal year 2027 is clearly defined. General Mills expects organic net sales to range from a 1.5% decline to a 0.5% increase, adjusted operating income in constant currency is expected to range from 13% to an 8% decline from the 2026 base of $2.8 billion, and adjusted diluted earnings per share are expected to range from $3.00 to $3.20. The company also expects free cash flow conversion to be approximately 95% of adjusted after-tax earnings and notes that the net impact of divestitures, exchange rates, and the 53rd week will reduce reported net revenue growth in 2027 by approximately 2%.1 [3]

[1,2,3] Forward-looking statements are based on assumptions and current expectations, which may be inaccurate, or on the current economic environment, which is subject to change. Such statements are not guarantees of future performance. They involve risks and other uncertainties that are difficult to predict. Actual results may differ materially from those expressed or implied in any forward-looking statements.

[1] https://investors.generalmills.com/press-releases/press-release-details/2026/General-Mills-Reports-Fiscal-2026-Fourth-quarter-Adjusted-Results-in-Line-with-Company-Expectations/default.aspx

[2] https://www.investing.com/news/transcripts/earnings-call-transcript-general-mills-beats-q4-2026-estimates-as-shares-jump-93CH-4770738