By Evie Liu

When General Mills reports its earnings on Wednesday, the focus will be on whether the business is showing signs of improvement, rather than on what is expected to be another set of dismal results.

For General Mills' second fiscal quarter, the three months through November, the consensus call among analysts polled by FactSet is for $1.03 in earnings per share, down from $1.40 a year earlier. Total sales are forecast to decline 9% to $4.78 billion even though the company's international and pet-food businesses are expected to grow.

General Mills, like many packaged-food companies, has been struggling with high costs, partly because of tariffs. The Trump administration's efforts to deport immigrants, the adoption of weight-loss drugs, and a lapse in funding for food-stamp benefits during the government shutdown have hurt demand.

Consumers are increasingly shifting to cheaper private labels and seeking products with shorter ingredient lists, healthier components, and innovative flavors. This has forced many packaged-food companies to reevaluate their portfolios in response.

Earlier this year, General Mills divested from its U.S. yogurt business, which includes Yoplait and Go-Gurt, amid slowing demand and competition from brands such as Chobani and Danone.

Except for the November quarter last year, General Mills' net sales have declined year over year for eight quarters. In the three months ended in August, the company posted adjusted earnings of 86 cents a share, compared with $1.07 a year earlier. Sales fell 6.8% to $4.5 billion.

Management isn't projecting a quick turnaround in 2026. For the current fiscal year, the company expects sales to be more or less flat, saying adjusted earnings will decline 10% to 15% from the previous year in constant-currency terms.

To reignite sales, General Mills has stepped up new product launches, revamped packaging, and started offering new package sizes with more affordable prices. The company has also increased advertising and marketing spending for product categories where brands can still win.

Earlier this year, General Mills said it would close its in-house innovation unit and pause additional outside investments by its venture- capital arm. Management is implementing cost-control initiatives that are meant to save at least $100 million this fiscal year.

Some products, such as Pillsbury dough and Cheerios Protein, have seen strong sales as a result of the company's efforts, management said on its latest earnings call. Investors will be watching whether the momentum will continue and whether sales of more brands will take off in the coming months.

General Mills stock has been sliding since mid-2023. Shares are down 26% this year alone, compared with a 2.9% gain for the S&P 500 Consumer Staples Sector Index.

Write to Evie Liu at evie.liu@barrons.com

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December 16, 2025 16:09 ET (21:09 GMT)

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