General Mills (GIS) Q2 2025 Prepared Remarks earnings summary

Executive summary

• Q2 2025 net sales increased 2% to $5.24 billion, with organic net sales up 1% year-over-year, driven by volume growth and timing-related benefits expected to reverse in the second half.

• Operating profit rose 33% to $1.1 billion, with adjusted operating profit up 7% in constant currency; diluted EPS grew 39% to $1.42, and adjusted diluted EPS up 12% in constant currency.

• Fiscal 2025 guidance was revised downward to reflect increased investment in promotions and brand building, aiming to drive volume and market share gains and position for sustainable growth in 2026.

• Strategic focus remains on portfolio reshaping through acquisitions and divestitures, including the Whitebridge Pet Brands acquisition and North American yogurt business divestitures.

• Q2 results exceeded expectations due to timing-related benefits, which are expected to reverse in the second half, creating headwinds.

Financial highlights

• Q2 net sales were $5.24 billion, up 2% year-over-year; organic net sales up 1%.

• Adjusted operating profit was $1.1 billion, up 7% in constant currency; adjusted diluted EPS was $1.40, up 12% in constant currency.

• Six-month net sales were flat at $10.1 billion; adjusted operating profit up 2%, adjusted diluted EPS up 6% in constant currency.

• Q2 adjusted gross margin increased 130 bps to 36.3%; adjusted operating profit margin up 100 bps to 20.3%.

• Cash from operations rose 19% to $1.8 billion in six months; $600 million in share repurchases.

Outlook and guidance

• Fiscal 2025 organic net sales expected to be flat to up 1%, with current outlook at the lower end due to increased promotional investment.

• Adjusted operating profit now expected to be down 4% to 2% in constant currency; adjusted diluted EPS down 3% to 1%.

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

• Guidance excludes impact from pending yogurt divestitures and Whitebridge Pet Brands acquisition.