It has been about a month since the last earnings report for General Mills (GIS Quick QuoteGIS - Free Report) . Shares have added about 1.2% in that time frame, underperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is General Mills due for a pullback? Well, first let's take a quick look at its most recent earnings report in order to get a better handle on the recent drivers for General Mills, Inc. before we dive into how investors and analysts have reacted as of late.

General Mills Q4 Earnings Beat Estimates, Sales Decline on Volume Pressure

General Mills reported fourth-quarter fiscal 2025 results, wherein the bottom line surpassed the Zacks Consensus Estimate and the top line missed the same. Both earnings and net sales declined year over year, reflecting weaker performance. 

The company’s efforts to deliver greater consumer value in late fiscal 2025 paid off, with improved volume and share trends in the quarter. Building on that momentum, the company plans to sharpen its focus on innovation and marketing in fiscal 2026, supported by cost-saving initiatives and a global transformation strategy. A major product expansion is also slated, including Blue Buffalo’s entry into the fresh pet food space later in the year.

General Mills posted adjusted earnings of 74 cents per share, which beat the Zacks Consensus Estimate of 71 cents. The bottom line declined 27% year over year on a constant-currency (cc) basis, attributed to reduced adjusted operating profit. However, the impact was partially offset by reduced net shares outstanding.

Net sales dropped 3% to $4,556.2 million, impacted by reduced pound volume and unfavorable net price realization and mix. Organic net sales also saw a 3% decline, including a 2-point headwind from unfavorable trade expense timing. Organic pound volume was in line with last year. The top line missed the Zacks Consensus Estimate of $4,604 million.

General Mills’ Quarterly Margin Performance

The adjusted gross margin declined 220 basis points (bps), reaching 32.7% of net sales, mainly due to input cost inflation and unfavorable net price realization and mix. Moreover, the timing of trade expenses created a 150-bps headwind during the quarter.

General Mills’ adjusted operating profit dropped 22% in constant currency, impacted by reduced adjusted gross profit dollars and increased adjusted selling, general and administrative (SG&A) expenses. The adjusted operating profit margin was down 330 bps, reaching 13.7%, with unfavorable trade expense timing accounting for a 190-bps headwind during the quarter.

Decoding General Mills’ Segmental Performance

North America Retail: Revenues in the segment were $2,559.8 million, down 10% year over year. The decrease was due to reduced pound volume and unfavorable net price realization and mix. The Canada yogurt divestiture contributed to a 3% reduction in net sales. Organic net sales declined 7%. Segment operating profit fell 29% to $473.8 million, mainly owing to unfavorable net price realization and mix, input cost inflation and reduced volume. HMM cost savings offered some respite. However, unfavorable trade expense timing represented a 17-point headwind to operating profit growth in the quarter.

International: Revenues in the segment were $738.9 million, up 11% year over year, including a 4-point boost from the Edgard & Cooper acquisition and a 2-point headwind from unfavorable foreign currency exchange. Organic net sales up 9%, thanks to strong growth in Brazil and distributor markets. Segment operating profit increased 50% to $33.7 million.

North America Pet: Revenues rose 12% year over year to $675.2 million, including a 9-point contribution from the acquisition of North America’s Whitebridge Pet Brands. Organic net sales grew 3%, outperforming all-channel retail sales by roughly 3 points, mainly due to increased retailer inventory ahead of first-quarter activations. Segment operating profit declined 3% to $140.1 million, impacted by higher input costs and a double-digit increase in media investment, partially offset by favorable pricing and mix, as well as increased volume.

North America Foodservice: Revenues were $579.4 million, which decreased 2% with organic net sales down 1%. Decline was due to softness in bakery flour and bread. Segment operating profit grew 5% to $83.1 million, supported by HMM cost savings, though input cost inflation posed challenges.

General Mills’ Financial Health Snapshot & Other Developments

General Mills ended the quarter with cash and cash equivalents of $363.9 million, long-term debt of $12,673.2 million and total stockholders’ equity (excluding noncontrolling interests) of $9,199.2 million.

General Mills generated $2,918.2 million in cash from operating activities in fiscal 2025. Capital investments amounted to $625.3 million during the same period. The company paid out dividends worth $1.3 billion and bought nearly 19 million shares for $1.2 billion in fiscal 2025.

The company has declared a quarterly dividend of 61 cents per share, payable on Aug. 1, 2025, to its shareholders of record as of July 10. This represents a 2% increase from the prior-quarter dividend of 60 cents per share.

Constant-currency sales from the joint venture of Cereal Partners Worldwide inched down 6% in the fiscal fourth quarter. For Haagen-Dazs Japan, sales jumped 1% year over year at cc.

What to Expect From General Mills in Fiscal 2026

General Mills’ top priority for fiscal 2026 is to revive volume-driven organic sales growth amid a challenging consumer environment. The company plans increased investment in value, innovation and brand building, including launching Blue Buffalo in the U.S. fresh pet food segment. Still, these growth efforts, along with input cost inflation and tariffs, are expected to exceed savings initiatives. Additionally, yogurt divestitures and the Whitebridge Pet acquisition are projected to reduce adjusted operating profit growth by about 5 points.

The company has provided its full-year fiscal 2026 outlook. Organic net sales are projected to range from a 1% decline to a 1% increase, while adjusted operating profit and adjusted earnings per share (EPS) are expected to decline 10% to 15% in constant currency. Free cash flow conversion is anticipated to be at least 95% of adjusted after-tax earnings.

How Have Estimates Been Moving Since Then?

Since the earnings release, investors have witnessed a downward trend in estimates review.

The consensus estimate has shifted -13.25% due to these changes.

VGM Scores

At this time, General Mills has a subpar Growth Score of D, a score with the same score on the momentum front. However, the stock has a grade of B on the value side, putting it in the top 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise General Mills has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.