By Connor Hart

General Mills expects its turnaround efforts to improve organic sales next year, but in the meantime, investments in new products and portfolio divestitures pressured fiscal third-quarter profitability.

The Cheerios maker said it is willing to take the short-term hit in order to better position itself for long-term success.

"We expected this reinvestment approach--along with the impact of divestitures and timing headwinds--would pressure our sales and earnings through our first three quarters," Chief Executive Jeff Harmening said in prepared remarks Wednesday.

"We also expected it to drive stronger competitiveness and set the stage for a return to growth once we moved past the reinvestment phase," he continued. "That's what we are seeing: clear signs of progress on key fundamentals including household penetration, baseline sales, distribution and market share."

General Mills stock earlier slipped to a more-than-six-year low of $37.97 before paring back some of the loss, recently trading 0.3% lower, at $38.65. Shares have lost over a third of their value over the past year.

The Pillsbury dough maker posted a profit of $303.1 million, or 56 cents a share, for the period ended Feb. 22, down from $625.6 million, or $1.12 a share, a year earlier. Adjusted earnings of 64 cents a share missed analyst expectations for 73 cents a share, according to FactSet.

Harmening said roughly two-thirds of that decline was anticipated. The remainder was due to new headwinds such as retailer inventory changes and weather-related supply-chain disruptions, which are projected to largely abate moving forward, he added.

Net sales fell 8.4% to $4.44 billion, but came in just ahead of the $4.41 billion that Wall Street had modeled. On an organic basis, sales were down 3%.

General Mills backed its outlook for the current fiscal year, which calls for organic net sales to fall 1.5% to 2%, and for adjusted per-share earnings to decline 16% to 20% in constant currency. The company lowered its guide last month, stating at the time that weak consumer sentiment, heightened uncertainty and significant volatility were weighing on growth and affecting purchase patterns.

General Mills has been able to address some of these challenges with new products, improved packaging and stepped-up marketing, Harmening said.

New products that lean into current trends, such as protein-packed cereals and boldly flavored snacks, are resonating with consumers, he said. The company is also benefiting from new packaging aimed at a wide range of shoppers, including value-focused options for budget-conscious shoppers, smaller sizes for consumers using GLP-1 weight-loss drugs, and more premium formats for higher-income households.

General Mills previously cut prices across roughly two-thirds of its North America grocery portfolio in an effort to win back cost-conscious shoppers. The company has said the move has helped stabilize volumes, though many consumers remain stressed.

Write to Connor Hart at connor.hart@wsj.com

(END) Dow Jones Newswires

March 18, 2026 11:47 ET (15:47 GMT)

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