General Mills (GIS) Q3 2026 (Q&A) earnings summary

Executive summary

• Strategic reinvestment and portfolio reshaping, including the announced sale of the Brazil business and completed yogurt divestitures, have improved household penetration, baseline volume, and market share, setting up for stronger financial performance in Q4 and beyond.

• Net sales declined 8% in Q3 and 7% for nine months, with organic net sales down 3% for both periods; operating profit fell 41% in Q3, while adjusted operating profit dropped 32% in constant currency.

• Diluted EPS decreased 50% to $0.56 in Q3; adjusted diluted EPS was $0.64, down 37% in constant currency.

• Retail sales trends improved versus Q2, but results were pressured by investments, divestitures, and unfavorable trade expense timing.

• The company reaffirmed its fiscal 2026 guidance and expects a significant step-up in both top and bottom line results as reinvestment winds down.

Financial highlights

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

• Adjusted operating profit: $547M, down 32%; adjusted diluted EPS: $0.64, down 37%.

• Gross margin declined to 30.8% in Q3, with adjusted gross margin at 30.6%; nine-month gross margin fell to 33.2%.

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

• The 53rd week in Q4 will provide a mechanical boost to reported results.

Outlook and guidance

• Fiscal 2026 outlook 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.

• Q4 expected to show significant sequential improvement due to 53rd week, partial reversal of inventory headwinds, favorable trade expense timing, and lower tax rate.

• Fiscal 2027 goals include improving dollar share competitiveness in North America Retail and maintaining pound share, leveraging innovation and marketing.

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