General Mills Q1 Earnings: Sales Beat, Profit Falls

General Mills reported Q1 earnings on Sept. 23, 2026, saying sales topped estimates even as profit declined. The company reaffirmed its fiscal-2027 outlook, citing input-cost pressure and planned cost savings as key operational challenges.

Sales Performance and Profit Decline

For the quarter ended Aug. 30, 2026, General Mills revenue was approximately $4.39 billion, down 3% year over year but above analyst estimates near $4.34 billion–$4.35 billion. Organic net sales were essentially flat. Adjusted diluted earnings per share (EPS) were $0.75, down 13% in constant currency but above the consensus near $0.72.

Reported net earnings attributable to General Mills fell to $397 million, or $0.74 per diluted share, from $1.2 billion, or $2.22 per share, a year earlier. The prior period included a $1.046 billion pretax gain from the sale of the U.S. yogurt business, which materially affected the comparison. Reported operating profit declined 63% year over year to about $634 million, with the operating-profit margin narrowing 2,380 basis points to 14.4%. Reported gross margin remained steady at 33.9%.

Adjusted operating profit was $634 million, down 11% in constant currency. Adjusted gross margin fell 90 basis points to 33.3%, reflecting higher input costs partly offset by favorable net price realization and product mix.

Segment results varied. North America Retail net sales declined 7% to roughly $2.4 billion, including a four-percentage-point headwind from the U.S. yogurt divestiture; organic retail sales fell 3%, and segment operating profit dropped 15% to $479 million. North America Foodservice net sales rose 1% to $523 million, with organic sales up 4% and operating profit increasing 12% to $79 million. North America Pet net sales were about $613 million and essentially flat. International net sales grew 4% to roughly $794 million, with organic sales up 4% and segment operating profit climbing 14% to $75 million.

Guidance, Cost Savings, and Capital Allocation

General Mills reaffirmed its fiscal-2027 guidance, projecting organic net sales down 1.5% to up 0.5%, adjusted operating profit down 13% to down 8% in constant currency, and adjusted diluted EPS of $3.00 to $3.20 per share. The outlook incorporates continued input-cost inflation, lower volume, favorable pricing and mix, cost savings, product innovation, supply-chain transformation, and debt reduction.

Management set a fiscal-2027 cost-savings target of at least $750 million to help offset inflation. The company also expects free-cash-flow conversion of at least 95% of adjusted after-tax earnings. Jeff Harmening, chairman and chief executive officer, said, “We are off to an encouraging start in fiscal 2027, driving improved topline performance with stronger product innovation and renovation focused on the benefits consumers are looking for today.”

Operating cash flow in the quarter was $298 million, down from $397 million a year earlier. Capital investment totaled $90 million. The company paid $330 million in dividends and did not repurchase shares during the period.

After the quarter ended, on Sept. 2, 2026, General Mills completed the sale of its Brazil business to 3corações for a reported base price of R$800 million.