A month has gone by since the last earnings report for General Mills (GIS Quick QuoteGIS - Free Report) . Shares have lost about 6.4% in that time frame, underperforming the S&P 500.

But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is General Mills due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.

General Mills Q2 Earnings Beat Estimates, Net Sales Down 7% Y/Y

General Mills posted adjusted earnings of $1.10 per share, which beat the Zacks Consensus Estimate of $1.02. The bottom line declined 21% year over year on a constant-currency (cc) basis, attributed to reduced adjusted operating profit and increased adjusted effective tax rate. However, the impact was partially offset by reduced net shares outstanding.

General Mills’ adjusted operating profit dropped 20% in constant currency, impacted by reduced adjusted gross profit dollars. The adjusted operating profit margin was down 290 bps, reaching 17.4%. We expected an adjusted operating margin of 17.1% for the quarter.

North America Retail: Revenues in the segment were $2,883.3 million, down 13% year over year, including a 10-point headwind from the divestiture of North American yogurt businesses. Net sales fell by double digits in the Big G Cereal & Canada operating unit, declined by mid-single digits in U.S. Snacks and decreased by low-single digits in U.S. Meals & Baking Solutions. Organic net sales were down 3%. Segment operating profit of $682.3 million fell 21% for both reported and in constant currency, mainly owing to lower volumes and the impacts of the yogurt divestitures.

International: Revenues in the segment were $728.9 million, up 6% year over year, including a two-point gain from foreign currency. Organic net sales increased 4%, backed by growth in Brazil, China, India and North Asia. Segment operating profit increased to $28.4 million from $23.8 million a year ago, reflecting favorable pricing, improved mix and higher volumes, partially offset by increased selling, general and administrative (SG&A) expenses.

North America Pet: Revenues rose 11% year over year to $660.4 million, including a 10-point contribution from the acquisition of North American Whitebridge Pet Brands. Net sales rose by double digits in cat food and pet treats, while dog food declined by low-single digits. Organic net sales increased 1%. Segment operating profit dropped 12% to $123.1 million, impacted by increased input costs and elevated SG&A expenses, including investments supporting the launch of Love Made Fresh. These pressures were partially offset by favorable pricing, product mix and higher volume.

North America Foodservice: Revenues were $581.8 million, which decreased 8%, including a 7-point headwind from yogurt divestitures. Organic net sales were roughly flat year over year, with growth in frozen baked goods, cereal and frozen meals offset by declines in bakery flour, including a 3-point impact from index pricing. Segment operating profit dropped 12% to $104.8 million, with the headwind from the yogurt divestitures mainly offset by growth in the remaining business.

What to Expect From GIS 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 anticipates category growth to come below its long-term expectations, with less benefit from price/mix.

The company plans increased investment in value, innovation, product news and brand building, including the launch of Blue Buffalo in the U.S. fresh pet food segment in the fiscal second quarter. 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 about five points in fiscal 2026.

The company has reaffirmed its 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 10-15% in constant currency. Free cash flow conversion is anticipated to be at least 95% of adjusted after-tax earnings. The net impacts of divestitures, acquisitions, foreign currency and the 53rd week are likely to reduce net sales by about 4%. Foreign currency exchange is not likely to have a material effect on adjusted operating profit or adjusted EPS growth.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in estimates revision.

The consensus estimate has shifted -7.38% due to these changes.

VGM Scores

At this time, General Mills has a subpar Growth Score of D, however its Momentum Score is doing a lot better with a B. Charting a somewhat similar path, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. 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. Notably, General Mills has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.