General Mills, Inc. (NYSE:GIS) shares fell on Wednesday after the food maker posted weaker-than-expected quarterly earnings despite slightly topping revenue estimates.

The results reflected softer sales trends in key North America businesses, while margin pressure and higher input costs weighed on performance.

What Happened?

The company reported third-quarter adjusted earnings per share of 64 cents, missing the analyst consensus estimate of 73 cents. Quarterly sales of $4.437 billion (down 8% year over year) outpaced the Street view of $4.417 billion.

Organic net sales were down 3%, driven by lower organic pound volume and unfavourable organic net price realization and mix, and trailed Nielsen-measured global retail sales results by approximately 1.5 points.

Segments

North America Retail Segment: Third-quarter net sales for General Mills’ North America Retail segment were down 14% to $2.6 billion, including a 9-point headwind from the North American Yogurt divestitures.

North America Pet Segment: Quarterly net sales for the North America Pet segment were up 3% to $640 million, including a 6-point benefit from the North American Whitebridge Pet Brands acquisition.

North America Foodservice Segment: Sales were down 11% to $496 million, including a 7-point headwind from the yogurt divestitures. 

International Segment: Revenues increased 7% to $696 million, including a 6-point benefit from foreign currency exchange.

Quarterly Metrics

“We started the year expecting that our investments, divestitures, and unfavorable timing comparisons would drive declines in our sales and earnings results through our first three quarters, even as we improved our volume and market share. And that’s what we’ve seen play out,” said General Mills Chairman and Chief Executive Officer Jeff Harmening.

Adjusted gross margin was down 280 basis points to 30.6% of net sales, driven by higher input costs. Adjusted operating profit margin was down 420 basis points to 12.3%.

The company exited the quarter with cash and equivalents worth $785.5 million.

Outlook

The firm reaffirmed its full-year adjusted earnings outlook, keeping guidance unchanged despite recent performance pressures.

General Mills reaffirmed its 2026 adjusted EPS guidance of $3.37 to $3.54, compared with the $3.50 analyst estimate.

The company said it expects stronger organic sales trends and a return to earnings growth in the fourth quarter. It said favorable timing, a 53rd week and market share gains should support results.

General Mills added that fiscal 2027 should bring better organic sales as pricing investments fade.

The company also said its margin program and transformation efforts should keep driving strong cost efficiency.

GIS Price Action: General Mills shares were down 0.41% at $38.58 at the time of publication on Wednesday, according to Benzinga Pro data.

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