General Mills (GIS) investor relations material

Executive summary

• Net sales declined 8% in Q3 and 7% for the nine months, with organic net sales down 3% for both periods, primarily due to lower volume, unfavorable price/mix, and divestitures, partially offset by favorable foreign exchange.

• Operating profit fell 41% in Q3 to $525 million, while adjusted operating profit dropped 32%; nine-month operating profit rose 6% due to a $1B divestiture gain, but adjusted operating profit fell 23%.

• Diluted EPS decreased 50% to $0.56 in Q3; adjusted diluted EPS was $0.64, down 37% in constant currency; nine-month diluted EPS was flat at $3.56.

• Brand reinvestment and innovation drove gains in household penetration and market share, setting up for improved performance in Q4 and beyond.

• Weather-related supply chain disruptions and retailer inventory headwinds impacted service and cost structure, but plants were fully back online in early Q4.

Financial highlights

• Q3 net sales: $4,437M, down 8% year-over-year; organic net sales down 3%; nine-month net sales: $13,815M, down 7%.

• Q3 operating profit: $524.6M, down 41%; adjusted operating profit: $547M, down 32%; nine-month operating profit: $2,978.4M, up 6% due to divestiture gains; adjusted operating profit: $2,106M, down 23%.

• Q3 gross margin: 30.8% (down 310 bps); adjusted gross margin: 30.6% (down 280 bps); nine-month gross margin: 33.2% (down 200 bps).

• Operating cash flow for nine months: $1,614M; capital investments: $356M; dividends paid: $987M; net share repurchases: $500M.

• Quarterly net earnings attributable to shareholders: $303.1M; nine-month: $1,920.3M.

Outlook and guidance

• Full-year fiscal 2026 guidance reaffirmed: organic net sales expected down 1.5–2%, adjusted operating profit and adjusted diluted EPS both down 16–20% in constant currency.

• Free cash flow conversion expected at least 95% of adjusted after-tax earnings.

• Sequential improvement in Q4 anticipated due to favorable timing, 53rd week, and market share momentum.

• Fiscal 2027 focus will be on improving dollar share competitiveness in North America Retail and maintaining industry-leading cost savings.

• Price mix is expected to return to growth in fiscal 2027 as pricing investments are fully lapped.