General Mills, Inc.
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PART I
ITEM 1 - Business
COMPANY OVERVIEW
For 160 years, General Mills has been making food the world loves. We are a leading global manufacturer and marketer of branded
consumer foods with more than 100 brands in 100 countries across six continents. In addition to our consolidated operations, we have
50 percent interests in two strategic joint ventures that manufacture and market food products sold in approximately 120 countries
worldwide.
We manage and review the financial results of our business under four operating segments: North America Retail; International; North
America Pet; and North America Foodservice. See Management’s Discussion and Analysis of Financial Condition and Results of
Operations (MD&A) in Item 7 of this report for a description of our segments.
We offer a variety of human and pet food products that provide great taste, nutrition, convenience, and value for consumers around the
world. Our business is focused on the following large, global categories:
•snacks, including grain, fruit and savory snacks, nutrition bars, and frozen hot snacks;
•ready-to-eat cereal;
•convenient meals, including meal kits, ethnic meals, pizza, soup, side dish mixes, frozen breakfast, and frozen entrees;
•wholesome natural pet food;
•refrigerated and frozen dough;
•baking mixes and ingredients; and
•super-premium ice cream.
Our Cereal Partners Worldwide (CPW) joint venture with Nestlé S.A. (Nestlé) competes in the ready-to-eat cereal category in markets
outside North America, and our Häagen-Dazs Japan, Inc. (HDJ) joint venture competes in the super-premium ice cream category in
Japan. For net sales contributed by each class of similar products, please see Note 17 to the Consolidated Financial Statements in Item
8 of this report.
The terms “General Mills,” “Company,” “registrant,” “we,” “us,” and “our” mean General Mills, Inc. and all subsidiaries included in
the Consolidated Financial Statements in Item 8 of this report unless the context indicates otherwise.
Certain terms used throughout this report are defined in a glossary in Item 8 of this report.
Customers
Our primary customers are grocery stores, mass merchandisers, membership stores, natural food chains, drug, dollar and discount
chains, e-commerce retailers, commercial and noncommercial foodservice distributors and operators, restaurants, convenience stores,
and pet specialty stores. We generally sell to these customers through our direct sales force. We use broker and distribution
arrangements for certain products and to serve certain types of customers and certain markets. For further information on our customer
credit and product return practices, please refer to Note 2 to the Consolidated Financial Statements in Item 8 of this report. During
fiscal 2026, Walmart Inc. and its affiliates (Walmart) accounted for 22 percent of our consolidated net sales and 31 percent of net sales
of our North America Retail segment. No other customer accounted for 10 percent or more of our consolidated net sales. For further
information on significant customers, please refer to Note 8 to the Consolidated Financial Statements in Item 8 of this report.
Competition
The human and pet food categories are highly competitive, with numerous manufacturers of varying sizes in the United States and
throughout the world. The categories in which we participate also are very competitive. Our principal competitors in these categories
are manufacturers, as well as retailers with their own branded products. Competitors market and sell their products through brick-and-
mortar stores and e-commerce. All our principal competitors have substantial financial, marketing, and other resources. Competition in
our product categories is based on product innovation, product quality, price, brand recognition and loyalty, effectiveness of
marketing, promotional activity, convenient ordering and delivery to the consumer, and the ability to identify and satisfy consumer
preferences. Our principal strategies for competing in each of our segments include unique consumer insights, effective customer
relationships, superior product quality, innovative advertising, product promotion, product innovation aligned with consumers’ needs,
an efficient supply chain, and price. In most product categories, we compete not only with other widely advertised, branded products,
but also with regional brands and with generic and private label products that are generally sold at lower prices. Internationally, we
compete with both multi-national and local manufacturers, and each country includes a unique group of competitors.
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Financial statements
data from SEC XBRL filings. Values are as-reported; restatements supersede originals. Values reported in .
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ITEM 7 - Management’s Discussion and Analysis of Financial Condition and Results of Operations
EXECUTIVE OVERVIEW
We are a global packaged foods company. We develop distinctive value-added food products and market them under unique brand
names. We work continuously to improve our core products and to create new products that meet consumers’ evolving needs and
preferences. In addition, we build the equity of our brands over time with strong consumer-directed marketing, innovative new
products, and effective merchandising. We believe our brand-building approach is the key to winning and sustaining leading share
positions in markets around the globe.
Our fundamental financial goal is to generate competitively differentiated returns for our shareholders over the long term. We believe
achieving that goal requires us to generate a consistent balance of net sales growth, margin expansion, cash conversion, and cash
return to shareholders over time.
Our long-term growth objectives are to deliver the following performance on average over time:
•2 to 3 percent annual growth in organic net sales;
•mid-single-digit annual growth in adjusted operating profit;
•mid- to high-single-digit annual growth in adjusted diluted earnings per share (EPS);
•free cash flow conversion of at least 95 percent of adjusted net earnings after tax; and
•cash return to shareholders of 80 to 90 percent of free cash flow, including an attractive dividend yield.
Guided by our purpose to make food the world loves, we are executing our Accelerate strategy to drive sustainable, profitable growth
and top-tier shareholder returns over the long term. The strategy focuses on four pillars to create competitive advantages and win:
boldly building brands, relentlessly innovating, unleashing our scale, and standing for good. We are prioritizing our core markets,
global platforms, and local gem brands that have the best prospects for profitable growth and we are committed to reshaping our
portfolio with strategic acquisitions and divestitures to further enhance our growth profile.
Our consolidated net sales for fiscal 2026 decreased 5 percent to $18.4 billion. On an organic basis, net sales decreased 2 percent
compared to year-ago levels. Operating profit of $886 million decreased 73 percent. Adjusted operating profit of $2.8 billion
decreased 16 percent on a constant-currency basis. Diluted loss per share decreased 104 percent to $(0.16). Adjusted diluted EPS of
$3.55 decreased 16 percent on a constant-currency basis (See the “Non-GAAP Measures” section below for a description of our use of
measures not defined by generally accepted accounting principles (GAAP)).
Net cash provided by operations totaled $2,166 million in fiscal 2026, with a conversion rate that was not meaningful as a percent of
net loss, including earnings attributable to noncontrolling interests. This cash generation supported capital investments totaling $540
million, and our resulting free cash flow was $1,626 million at a conversion rate of 85 percent of adjusted net earnings, including
earnings attributable to noncontrolling interests. We returned cash to shareholders through dividends totaling $1,315 million and net
share repurchases totaling $500 million (See the “Non-GAAP Measures” section below for a description of our use of measures not
defined by GAAP).
In fiscal 2026, while we made meaningful progress in strengthening the remarkability of our brands to position the business for long-
term sustainable growth, this progress came amid a more challenging category and competitive backdrop than we initially expected.
Weak consumer sentiment, heightened uncertainty, and significant volatility weighed on category growth and impacted consumer
purchase patterns, resulting in a slower pace and higher cost of volume recovery than we originally anticipated. We delivered mixed
performance against the three priorities we established at the beginning of the year:
On our priority of returning North America Retail to volume growth, we did not achieve our objective. Organic pound
volume in North America Retail declined 1 percent for the year, driven in part by Nielsen-measured pound volume in our
categories slowing by 1 point versus fiscal 2025. Even so, we grew household penetration and we delivered improved pound
competitiveness, with 65 percent of our U.S. categories holding or growing pound share.
On our priority of accelerating North America Pet growth, we partially achieved our objective. Our Nielsen-measured retail
sales growth improved by 1 point versus our fiscal 2025 trend. However, our organic net sales growth slowed by 3 points,
driven largely by changes in retailer inventory.
On our priority of driving efficiencies to reinvest in growth, we successfully achieved our objectives to generate Holistic
Margin Management (HMM) savings of 5 percent of cost of goods sold and deliver more than $100 million in additional
savings from our global transformation initiative and other efficiency efforts.
A detailed review of our fiscal 2026 performance compared to fiscal 2025 appears below in the section titled “Fiscal 2026
Consolidated Results of Operations.” A detailed review of our fiscal 2025 performance compared to our fiscal 2024 performance is set
forth in Part II, Item 7 of our Form 10-K for the fiscal year ended May 25, 2025, under the caption “Management’s Discussion and
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Analysis of Financial Condition and Results of Operations – Fiscal 2025 Results of Consolidated Operations,” which is incorporated
herein by reference.
In an effort to help address input cost inflation, fund growth investments, and deliver accelerated profit and cash flow growth, we
expect to generate $3 billion in cumulative cost savings in the four years through fiscal 2030. Roughly $2 billion of this target is
expected to be generated through our ongoing HMM productivity program, equating to annual savings of approximately 4 percent of
cost of goods sold. The remaining $1 billion is expected to be generated by our global transformation initiative and other cost
efficiency efforts, including redesigning the supply chain network, further streamlining business processes, and driving improvement
across other elements of its cost base. These efforts will create a more agile and efficient structure that is better fit for future growth.
In fiscal 2027, we plan to continue advancing our Accelerate strategy and improving the remarkability of our brands. Our key
priorities are to strengthen our organic net sales growth, accelerate our enterprise transformation efforts, and drive disciplined capital
allocation and returns. Amid a continued challenging macroeconomic backdrop for consumers, we expect category growth to be
consistent with recent trends and below our long-term growth projections. With our price investments completed in fiscal 2026, our
plans in fiscal 2027 are focused on delivering product innovation and renovation news centered on the benefits that matter most to
today’s consumers, including better-for-you benefits like protein and fiber, bold flavors, and fun and indulgence, all of which should
help support stronger topline growth. We expect to generate at least $750 million in total savings toward the $3 billion target from
HMM, our global transformation initiative, and other cost savings actions, which will help offset our forecast for 4 to 5 percent input
cost inflation as well as our investments in brand remarkability. In addition to these factors, we expect headwinds of approximately 9
points on operating profit and 11 points on EPS in fiscal 2027 from lapping the 53rd week in fiscal 2026, normalizing corporate
incentive expense, and the impact of fiscal 2026 divestitures.
Based on these assumptions, our key full-year fiscal 2027 targets are summarized below:
•Organic net sales are expected to range between down 1.5 percent and up 0.5 percent.
•Adjusted operating profit is expected to be down 8 to 13 percent in constant-currency from the base of $2.8 billion reported in
fiscal 2026.
•Adjusted diluted EPS is expected to be between $3.00 and $3.20 per share, including an immaterial impact from foreign
currency exchange.
•Free cash flow conversion is expected to be approximately 95 percent of adjusted after-tax earnings.
See the “Non-GAAP Measures” section below for a description of our use of measures not defined by GAAP.
Certain terms used throughout this report are defined in a glossary in Item 8 of this report.
FISCAL 2026 CONSOLIDATED RESULTS OF OPERATIONS
Fiscal 2026 had 53 weeks compared to 52 weeks in fiscal 2025.
In fiscal 2026, net sales decreased 5 percent compared to fiscal 2025, including the net impact of the divestitures of our North
American yogurt businesses (Divestitures) and the acquisition of Whitebridge Pet Brands (Acquisition). Organic net sales decreased 2
percent compared to fiscal 2025. Operating profit of $886 million decreased 73 percent compared to fiscal 2025, primarily driven by
impairments of goodwill and other brand intangible assets, a valuation loss related to our held for sale business in Brazil, higher input
costs, and a decrease in contributions from volume growth, partially offset by a divestiture gain related to the sale of our United States
yogurt business and favorable net price realization and mix. Operating profit margin of 4.8 percent decreased 1,220 basis points.
Adjusted operating profit of $2,812 million decreased 16 percent on a constant-currency basis, including the net impact of the
Divestitures and Acquisition, primarily driven by higher input costs and a decrease in contributions from volume growth, partially
offset by favorable net price realization and mix and lower selling, general & administrative (SG&A) expenses. Adjusted operating
profit margin decreased 190 basis points to 15.3 percent. Diluted loss per share of $(0.16) decreased 104 percent compared to diluted
earnings per share in fiscal 2025. Adjusted diluted earnings per share of $3.55 decreased 16 percent on a constant-currency basis (see
the “Non-GAAP Measures” section below for a description of our use of measures not defined by GAAP).
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A summary of our consolidated financial results for fiscal 2026 follows:
Fiscal 2026 | In millions, except per share | Fiscal 2026 vs. Fiscal 2025 | Percent of Net Sales | Constant- Currency Growth (a) | |
Net sales | $18,424.6 | (5) | % | ||
Operating profit | 885.8 | (73) | % | 4.8% | |
Net loss attributable to General Mills | (87.6) | (104) | % | ||
Diluted loss per share | $(0.16) | (104) | % | ||
Organic net sales growth rate (a) | (2) | % | |||
Adjusted operating profit (a) | 2,811.5 | (16) | % | 15.3% | (16)% |
Adjusted diluted earnings per share (a) | $3.55 | (16) | % | (16)% | |
(a)See the “Non-GAAP Measures” section below for our use of measures not defined by GAAP.
Consolidated net sales were as follows:
Fiscal 2026 | Fiscal 2026 vs. Fiscal 2025 | Fiscal 2025 | ||
Net sales (in millions) | $18,424.6 | (5) | % | $19,486.6 |
Contributions from volume growth (a) | (8) | pts | ||
Net price realization and mix | 2 | pts | ||
Foreign currency exchange | 1 | pt | ||
Note: Table may not foot due to rounding.
(a) Measured in tons based on the stated weight of our product shipments.
Net sales in fiscal 2026 decreased 5 percent compared to fiscal 2025, driven by a decrease in contributions from volume growth,
partially offset by favorable net price realization and mix and favorable foreign currency exchange impacts, and includes the net
impact of the Divestitures and Acquisition.
Components of organic net sales growth are shown in the following table:
Fiscal 2026 vs. Fiscal 2025 | ||
Contributions from organic volume growth (a) | (1) | pt |
Organic net price realization and mix | (1) | pt |
Organic net sales growth | (2) | pts |
Foreign currency exchange | 1 | pt |
Divestitures and acquisition | (6) | pts |
53rd week | 2 | pts |
Net sales growth | (5) | pts |
Note: Table may not foot due to rounding.
(a)Measured in tons based on the stated weight of our product shipments.
Organic net sales in fiscal 2026 decreased 2 percent compared to fiscal 2025, driven by a decrease in contributions from organic
volume growth and unfavorable organic net price realization and mix.
Cost of sales decreased $525 million in fiscal 2026 to $12,229 million. The decrease was primarily driven by a $1,009 million
decrease due to lower volume, partially offset by a $506 million increase attributable to product rate and mix. We recorded a $48
million net decrease in cost of sales related to mark-to-market valuation of certain commodity positions and grain inventories in fiscal
2026, compared to a net decrease of $16 million in fiscal 2025 (please refer to Note 8 to the Consolidated Financial Statements in Item
8 of this report for additional information). We also recorded $19 million of restructuring charges in fiscal 2026 compared to $9
million of restructuring charges in cost of sales in fiscal 2025 (please refer to Note 4 to the Consolidated Financial Statements in Item
8 of this report for additional information).
Gross margin decreased 8 percent in fiscal 2026 compared to fiscal 2025. Gross margin as a percent of net sales of 33.6 percent
decreased 100 basis points compared to fiscal 2025.
SG&A expenses decreased $57 million to $3,388 million in fiscal 2026 compared to fiscal 2025, primarily driven by lower other
administrative costs, including the net impact of the Divestitures and Acquisition, partially offset by increased media and advertising
expenses. SG&A expenses as a percent of net sales in fiscal 2026 increased 70 basis points compared to fiscal 2025.
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Divestitures gain, net totaled $1,049 million in fiscal 2026 primarily related to the sale of our United States yogurt business. In fiscal
2025, we recorded a $96 million divestiture gain related to the sale of our Canada yogurt business (please refer to Note 3 to the
Consolidated Financial Statements in Item 8 of this report).
Restructuring, transformation, impairment, and other exit costs totaled $2,971 million in fiscal 2026 compared to $78 million in
fiscal 2025. In fiscal 2026, we recorded a $1,500 million non-cash goodwill impairment charge related to our North America Pet
reporting unit and $303 million of non-cash impairment charges related to our Nudges, Uncle Toby’s, and True Chews brand
intangible assets (please refer to Note 6 to the Consolidated Financial Statements in Item 8 of this report for additional information).
We recorded a $1,032 million non-cash pre-tax valuation loss related to the planned divestiture of our Brazil business (please refer to
Note 3 to the Consolidated Financial Statements in Item 8 of this report for additional information). Additionally, we recorded $95
million of restructuring charges related to the multi-year organizational initiative to increase the competitiveness of our supply chain
and $60 million of restructuring and transformation charges related to actions previously announced. In fiscal 2025, we approved a
multi-year global transformation initiative to drive increased productivity by enhancing end-to-end business processes, enabled by
targeted organizational actions, and as a result, we recorded $70 million of charges in fiscal 2025. Please refer to Note 4 to the
Consolidated Financial Statements in Item 8 of this report for additional information.
Benefit plan non-service income totaled $58 million in fiscal 2026 compared to $54 million in fiscal 2025, primarily reflecting lower
interest costs, partially offset by lower expected return on plan assets (please refer to Note 14 to the Consolidated Financial Statements
in Item 8 of this report for additional information).
Interest, net for fiscal 2026 totaled $539 million, $14 million higher than fiscal 2025, primarily driven by a 53rd week of interest
expense.
Our effective tax rate for fiscal 2026 was 102.2 percent compared to 20.2 percent in fiscal 2025. The 82.0 percentage point increase
was primarily driven by a non-deductible goodwill impairment charge and unfavorable earnings mix by jurisdiction in fiscal 2026,
partially offset by certain nonrecurring tax benefits in fiscal 2026. Our adjusted effective tax rate was 21.1 percent in fiscal 2026
compared to 20.6 percent in fiscal 2025 (see the “Non-GAAP Measures” section below for a description of our use of measures not
defined by GAAP). The 0.5 percentage point increase was primarily due to unfavorable earnings mix by jurisdiction in fiscal 2026,
partially offset by certain nonrecurring tax benefits in fiscal 2026.
The impacts of the One Big Beautiful Bill Act (OBBBA) are reflected in our results for the fiscal year ended May 31, 2026, and there
was no material impact to our income tax expense. As of the fiscal year ended May 31, 2026, certain provisions of the OBBBA have
impacted the timing of cash tax payments (please refer to Note 15 to the Consolidated Financial Statements in Item 8 of this report for
additional information).
After-tax (loss) earnings from joint ventures was a
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Recent SEC filings
- 2026-08-13 DEF 14A Proxy Statement
- 2026-08-03 PRE 14A Preliminary Proxy Statement
- 2026-07-01 8-K Earnings Release; Financial Statements and Exhibits
- 2026-07-01 10-K Annual Report
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- 2026-05-04 8-K Officer/Director Change
- 2026-04-16 8-K Other Events; Financial Statements and Exhibits
- 2026-04-13 424B5 Prospectus Supplement
- 2026-03-18 10-Q Quarterly Report
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- 2026-01-27 8-K Officer/Director Change; Bylaws/Articles Amended; Financial Statements and Exhibits
- 2025-12-17 10-Q Quarterly Report
- 2025-12-17 8-K Earnings Release; Financial Statements and Exhibits
- 2025-10-01 8-K Costs Associated with Exit
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