By Evie Liu

General Mills stock tumbled Tuesday after the company -- known for brands such as Cheerios, Pillsbury and Betty Crocker -- lowered its sales outlook because of weaker-than-expected consumer demand.

The stock slid nearly 9%, dragging down other packaged-food stocks with it. Campbell's shares dropped 8%, Lamb Weston fell 6.3%, while Conagra Brands and Kraft Heinz lost 5.8% and 5.2%, respectively.

General Mills told investors at the Consumer Analyst Group of New York conference that it now expects overall sales to fall about 1.5% to 2% in its 2026 fiscal year ending in May -- putting the company on track for a third straight year of sales declines. It had previously forecast a slight decline of 1% to a slight increase of 1%.

The packaged-food company also projects that its adjusted earnings per share for fiscal 2026 will fall 16% to 20% compared with the previous year. That's a steeper drop than the 10% to 15% decline it had forecast earlier.

Many households are still feeling pressure from inflation and higher living costs, and shoppers are being more careful about what they buy. Many consumers are pulling back from spending or trading down to cheaper alternatives, while the shifting health and diet preferences put further pressure on some of General Mills' legacy brands.

The weaker outlook comes as the company marks the fifth year of its "Accelerate" strategy, which aims to grow the business by reshaping the product portfolio and improving operations. CEO Jeff Harmening said Tuesday that the the turnaround is taking a longer time and has cost more than previously anticipated.

General Mills stock has tumbled 21% since the strategy was announced on Feb. 16, 2021, while the State Street Consumer Staples Select Sector SPDR exchange-traded fund has gained 34%.

The downgraded sales guidance raises questions about how quickly General Mills can return to growth and whether it needs to adjust strategy further. Many large packaged-food peers -- facing similar demand challenges -- are cutting prices, reshaping portfolios, and in some cases, rethinking bold strategic moves or structural changes.

Last year, activist investor Elliott Investment Management took a $4 billion stake in PepsiCo and publicly urged the company to cut costs, simplify product lineup, and consider refranchising its lower-margin bottling business to focus more on core brands. In response, Pepsi plans to reduce its U.S. product offerings and cut prices on popular snacks such as Lay's and Doritos to reinvigorate sales growth.

In 2025, Kraft Heinz announced a plan to split the company into two parts by separating slower-growing grocery staples from faster-moving sauces and spreads. However, in early 2026, the company paused that split after new CEO Steve Cahillane concluded that further investment in marketing and product development was a better way to revive the business.

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

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February 17, 2026 15:30 ET (20:30 GMT)

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