By Evie Liu and Mackenzie Tatananni

Shares of General Mills declined in premarket trading Wednesday after the cereal maker posted better-than-expected fiscal first-quarter earnings and reaffirmed its guidance.

Adjusted earnings of 86 cents a share topped analysts' forecasts of 81 cents, according to FactSet, while sales of $4.5 billion were in line with expectations but down 6.8% from a year earlier.

Sales fell across several categories in the quarter. North America foodservice sales declined 4% to $517 million, while retail sales for the region were down 13%. International sales fared considerably better, rising 6% to $760 million.

The company reaffirmed its fiscal 2026 outlook, which calls for organic net sales in the range of down 1% to up 1%. Adjusted earnings are expected to decline between 10% and 15% in constant currency. Management noted that category growth is expected to come in below the company's long-term targets "amid a continued challenging consumer backdrop."

In a statement, CEO Jeff Harmening indicated that the company was making headway on its turnaround. "Our primary goal in fiscal 2026 is to restore organic sales growth by investing in greater value, innovation, and product news for consumers," Harmening said. "I'm pleased that we're seeing the returns we expected on these investments."

General Mills stock declined 1.2% to $48.99 following the report. Futures tracking the benchmark S&P 500 index fell modestly.

The packaged-food company has struggled with weak demand as consumers shift to cheaper private labels amid inflation. The rising popularity of weight-management drugs has further damped people's appetite.

Excluding the three months ended in November, net sales have declined year over year for five quarters, while earnings were down three quarters in a row.

For the fourth quarter of fiscal 2025, General Mills posted a 3% decline in sales as adjusted earnings shrunk by 27%. As evidenced by the reaffirmed fiscal-year guidance, management isn't projecting a quick turnaround in 2026.

Still, Harmening expects new product launches -- from Cheerios Protein to high-protein Pitmaster Soups -- to boost sales. The company has also invested more in advertising and in-store events.

Management is planning new cost-control initiatives that aim for an extra $100 million in savings in fiscal 2026. Earlier this year, General Mills announced it will close its in-house innovation unit and pause additional outside investments by its venture capital arm.

Despite struggles in snacks and cereals, the company's pet-food business saw 6% growth in the latest quarter, though this was below the 8.5% jump analysts anticipated. Its Blue Buffalo brand is adding fresh pet food to compete with popular brands like Freshpet and The Farmer's Dog.

General Mills stock has been falling since last September. Shares are down 22% this year, trailing an 1.8% gain for the S&P 500 Consumer Staples Sector Index. Their valuation -- at 13 times forward earnings -- is at a discount to many of its packaged-food peers.

Write to Evie Liu at evie.liu@barrons.com and Mackenzie Tatananni at mackenzie.tatananni@barrons.com

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September 17, 2025 07:48 ET (11:48 GMT)

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