General Mills predicts lower profits and sales due to consumer demand weakness and rising costs

From Financial Modeling Prep: 2025-06-25 15:59:00

General Mills (NYSE:GIS) forecasts flat-to-negative organic sales and a steep drop in adjusted operating profit for the new fiscal year due to weakening consumer demand and rising input costs from U.S. tariffs, causing shares to fall over 3%. Organic net sales expected to range from down 1% to up 1%, with adjusted operating profit projected to fall 10% to 15%.

The company attributes the earnings pressure to tariff-driven cost inflation, elevated strategic spending, and a corporate incentive reset, outweighing benefits from cost-saving initiatives and an extra fiscal week. General Mills expects category growth in fiscal 2026 to underperform long-term expectations due to budget-conscious shoppers pulling back amid economic uncertainty.

Despite the challenges, General Mills plans to invest in growth areas, including its U.S. fresh pet food business, value-focused innovation, and brand support. In the fiscal fourth quarter, net sales declined 3.3% year-over-year to $4.56 billion, with adjusted EPS of $0.74 slightly beating expectations. However, soft guidance and margin pressures reflect the tough road ahead for consumer staples firms.



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