By Evie Liu

General Mills is grappling with choppy demand for its cereals and snacks amid consumer pullback and private-label competition. The packaged-food giant is set to report quarterly earnings on Wednesday before the market opens. Wall Street isn't very excited.

For the fourth fiscal quarter, ended in May, analysts polled by FactSet expect General Mills to post 71 cents in earnings per share, down 30% from the same period last year. Total sales are expected to decline 2.7% year over year, to $4.59 billion.

The downbeat outlook isn't surprising. Except for the three months ended in November, General Mills' net sales have declined on a year-over-year basis for four straight quarters, while earnings were down two quarters in a row.

Results were stronger for the November quarter, partially due to an increase in retailer inventory in North America because of a later Thanksgiving holiday in 2024. In the February quarter this year, the firm posted earnings that were 15% down from a year ago and sales that declined 5%.

The challenging environment has pushed General Mills to trim its outlook for the fiscal year. Management projects organic net sales to decrease 1.5% to 2%, versus a prior guidance of flat to 1% growth. Adjusted earnings are expected to shrink 7% to 8% in constant currency, also a significant cut from the earlier guidance of a 2% to 4% decline.

General Mills is not the only packaged-food company struggling with weak demand: Many consumers have shifted to cheaper private labels amid inflation pressure, while the rising popularity of weight-management drugs has further damped people's appetite.

Campbell's, another packaged-food giant, cut its 2025 guidance earlier this year as well. In the latest quarter, ended in April, net sales for Campbell's snacks business -- which includes brands such as Goldfish and Snyder's of Hanover pretzels -- declined 8% from last year.

"Consumers continue to cook at home and focus their spending on products that help them stretch their food budgets," Campbell's CEO Mick Beekhuizen said at the time. "They're increasingly intentional about their discretionary snack purchases."

Although Campbell's meals and beverages business -- which includes canned soups, V8 juices, and Rao's Italian sauces -- is doing well, the company expects full-year earnings to come in at the low end of its previous guidance range due to weakness in snacks.

Likewise, J.M. Smucker, the company behind Folgers coffee, Jif peanut butter, and Twinkies cake, posted adjusted earnings that are down 13% from a year ago and net sales that declined 3% in the company's latest quarter. The stock has plunged 14% since the earnings report two weeks ago.

General Mills stock has been going downhill since last September and has fallen 16% year to date, trailing the 4% gain of the S&P 500 Consumer Staples Sector Index. Its valuation -- at 13 times forward earnings -- is at a discount to many of its packaged-food peers.

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.

Last month, the company told investors that it will record a charge of about $70 million in its current quarter due to severance expenses incurred during its restructuring efforts. The total cost of the restructuring will be about $130 million, the company said.

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

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

June 24, 2025 16:30 ET (20:30 GMT)

Copyright (c) 2025 Dow Jones & Company, Inc.