General Mills (GIS) Q1 2027 Prepared remarks earnings summary

Executive summary

• Fiscal Q1 2027 began with encouraging momentum, driven by product innovation, renovation, and efficiency initiatives, despite challenging macroeconomic conditions and the impact of the U.S. yogurt divestiture.

• Q1 results exceeded expectations on both top and bottom lines, with improved retail momentum across North America Retail, Foodservice, and International segments.

• Industry-leading cost savings initiatives are on track, targeting $750 million in annual savings for FY27 as part of a $3 billion cumulative goal by FY30.

• Full-year fiscal 2027 guidance has been reaffirmed, reflecting confidence in ongoing transformation, cost management, and deleveraging.

• Operating profit and EPS declined sharply year-over-year, primarily due to prior-year divestiture gains, higher input costs, and lower volume.

Financial highlights

• Reported net sales were $4.39–$4.4 billion, down 3% year-over-year due to the U.S. yogurt divestiture; organic net sales were flat.

• Adjusted operating profit was $634 million, down 11% in constant currency; adjusted diluted EPS was $0.75, down 13%.

• Adjusted gross margin was 33.3%, down 90 basis points; operating profit margin was 14.4%, down 130 basis points.

• Operating cash flow was $298 million, down from $397 million in the prior year.

• No share repurchases in Q1 2027 versus $500 million in the prior year; $330 million paid in dividends.

Outlook and guidance

• Organic net sales for FY27 expected to range from down 1.5% to up 0.5%.

• Adjusted operating profit projected to decline 13% to 8% in constant currency; adjusted diluted EPS expected between $3.00 and $3.20.

• Free cash flow conversion targeted at approximately 95% of adjusted after-tax earnings.

• Annual input cost inflation expected at the higher end of 4–5%.

• Net impact of divestitures, FX, and the 53rd week expected to reduce reported net sales growth by ~4%.