General Mills : Third Quarter 2025 Press Release

Published: 2025-03-19 07:21:11 ET GIS

FOR IMMEDIATE RELEASE

Mar. 19, 2025

General Mills Reports Fiscal 2025 Third-quarter Results

and Updates Full-year Outlook

Strong Holistic Margin Management Productivity Savings and Expected Incremental

Cost Efficiency Initiatives to Fuel Increased Growth Investment in Fiscal 2026

MINNEAPOLIS (Mar. 19, 2025) - General Mills, Inc. (NYSE: GIS) today reported results for its fiscal 2025 third quarter.

"Our third-quarter organic net sales finished below our expectations, driven largely by greater-than- expected retailer inventory headwinds and a slowdown in snacking categories," said General Mills Chairman and Chief Executive Officer Jeff Harmening. "At the same time, we drove continued positive market share trends in Pet, Foodservice, and International as well as improvement in Pillsbury refrigerated dough and Totino's hot snacks, two businesses where we made incremental investments last quarter and saw positive returns.

"We're focused on improving our sales growth in fiscal 2026 by stepping up our investment in innovation, brand communication, and value for consumers," Harmening continued. "We'll fund that investment with another year of industry-leading HMM productivity, coupled with expected new cost-savings initiatives designed to further boost our efficiency and enable growth."

Guided by its purpose to make food the world loves, General Mills is executing its 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 scale, and standing for good. The company is prioritizing its core markets, global platforms, and local gem brands that have the best prospects for profitable growth and is committed to reshaping its portfolio with strategic acquisitions and divestitures to further enhance its growth profile.

Third Quarter Results Summary

Nine Month Results Summary

Operating Segment Results

Components of Fiscal 2025 Reported Net Sales Growth

Foreign

Reported

Third Quarter

Volume

Price/Mix

Exchange

Net Sales

North America Retail

(6) pts

(1) pt

(7)%

North America Pet

(1) pt

1 pt

Flat

North America Foodservice

(1) pt

2 pts

International

(1) pt

2 pts

(5) pts

(4)%

Total

(4) pts

(1) pt

(5)%

Nine Months

North America Retail

(3) pts

1 pt

(3)%

North America Pet

3 pts

(2) pts

North America Foodservice

2 pts

International

4 pts

(2) pts

(1)%

Total

(1) pt

(1)%

Components of Fiscal 2025 Organic Net Sales Growth

Organic

Foreign

Acquisitions &

Reported

Third Quarter

Volume

Price/Mix

Net Sales

Exchange

Divestitures

Net Sales

North America Retail

(5) pts

(1) pt

(6)%

(1) pt

(7)%

North America Pet

(3) pts

(1) pt

(5)%

5 pts

Flat

North America Foodservice

(1) pt

2 pts

International

(4) pts

(3)%

(5) pts

4 pts

(4)%

Total

(4) pts

(1) pt

(5)%

(1) pt

1 pt

(5)%

Nine Months

North America Retail

(3) pts

(2)%

(3)%

North America Pet

3 pts

(3) pts

Flat

2 pts

North America Foodservice

2 pts

International

2 pts

(4) pts

(2)%

(2) pts

4 pts

(1)%

Total

(1) pt

(1)%

1 pt

(1)%

Fiscal 2025 Segment Operating Profit Growth

Third Quarter

% Change as Reported

% Change in Constant Currency

North America Retail

(14)%

North America Pet

(20)%

North America Foodservice

International

(1)%

(20)%

Total

(13)%

Nine Months

North America Retail

(6)%

North America Pet

North America Foodservice

15%

International

(39)%

(50)%

Total

(5)%

North America Retail Segment

Third-quarter net sales for General Mills' North America Retail segment were down 7 percent to $3.0 billion, driven by lower pound volume and unfavorable net price realization and mix. The Canada yogurt divestiture reduced net sales by 1 percent. Organic net sales were down 6 percent. Nielsen-measured retail sales were down 2 percent in the quarter, with the 4-point gap to organic net sales growth driven primarily by a reduction in retailer inventory and the expected reversal of certain second-quarter favorable timing items. Expected improvements in retail sales and market share in Pillsbury refrigerated dough and Totino's hot snacks in the third quarter were offset by a slowdown in other key U.S. snacking categories. Net sales were down 10 percent for the U.S. Morning Foods operating unit, due in part to the reversal of a retailer inventory build in the previous quarter. Net sales were down mid-single digits for U.S. Snacks and down low-single digits for U.S. Meals & Baking Solutions. Net sales were down double digits for Canada in constant currency, due primarily to the Canada yogurt divestiture. Segment operating profit of $648 million was down 14 percent as reported and in constant currency, driven primarily by lower volume, input cost inflation, and unfavorable net price realization and mix, partially offset by HMM cost savings.

Through nine months, North America Retail segment net sales were down 3 percent to $9.3 billion. Organic net sales were down 2 percent. Segment operating profit of $2.3 billion was down 6 percent as reported and in constant currency, driven primarily by input cost inflation, lower volume, and higher other supply chain costs, partially offset by HMM cost savings.

North America Pet Segment

Third-quarter net sales for the North America Pet segment totaled $624 million and essentially matched year-ago results, including a 5-point benefit from the North American Whitebridge Pet Brands acquisition. Organic net sales were down 5 percent. Organic net sales performance lagged all-channel retail sales results by roughly 5 points, primarily driven by a reduction in retailer inventory. Net sales in the quarter were up mid-single digits for wet pet

food, up mid-single digits for pet treats, and down mid-single digits for dry pet food. Segment operating profit of $102 million was down 20 percent, driven by a double-digit increase in media investment as well as higher input costs.

Through nine months, North America Pet segment net sales were up 1 percent to $1.8 billion. Organic net sales essentially matched year-ago levels. Segment operating profit increased 6 percent to $361 million, driven by HMM cost savings and higher volume, partially offset by unfavorable net price realization and mix, a double-digit increase in media investment, and input cost inflation.

North America Foodservice Segment

Third-quarter net sales for the North America Foodservice segment were up 1 percent to $555 million. Organic net sales were also up 1 percent, with growth on cereal and breads, partially offset by a decline on bakery flour. While away-from-home industry sales slowed in the quarter, the segment continued to drive market share gains in K-12 schools, healthcare, and college and university channels. Segment operating profit increased 1 percent to $82 million, driven primarily by favorable net price realization and mix and HMM cost savings, partially offset by input cost inflation and higher other supply chain costs.

Through nine months, North America Foodservice net sales increased 3 percent to $1.7 billion. Organic net sales were also up 3 percent. Segment operating profit was up 15 percent to $272 million, driven primarily by favorable net price realization and mix.

International Segment

Third-quarter net sales for the International segment were down 4 percent to $651 million, including a 5-point headwind from unfavorable foreign currency exchange and a 4-point benefit from the Edgard & Cooper acquisition. Organic net sales were down 3 percent, driven primarily by declines in China and Brazil, partially offset by growth in distributor markets and Europe & Australia. Segment operating profit was down 1 percent to $18 million. Constant- currency segment operating profit was down 20 percent, driven primarily by unfavorable net price realization and mix and input cost inflation, partially offset by HMM cost savings.

Through nine months, International net sales were down 1 percent to $2.1 billion, including 2 points of unfavorable foreign currency exchange and a 4-point benefit from the Edgard & Cooper acquisition. Organic net sales were down 2 percent. Segment operating profit totaled $63 million versus $103 million a year ago, driven primarily by unfavorable net price realization and mix and input cost inflation, partially offset by HMM cost savings and lower other supply chain costs.

Joint Venture Summary

Third-quarter constant-currency net sales were down 1 percent for Cereal Partners Worldwide (CPW) and increased 10 percent for Häagen-Dazs Japan (HDJ). Combined after-tax earnings from joint ventures totaled $14 million compared to $18 million a year ago, driven by an asset impairment charge at CPW, partially offset by lower SG&A expenses and higher volume at HDJ. Through nine months, after-tax earnings from joint ventures totaled $64 million compared to $66 million a year ago.

Other Income Statement Items

Third-quarter unallocated corporate items totaled $56 million net expense in fiscal 2025 compared to $64 million net expense a year ago (please see Note 4 below for more information on these expenses). Excluding mark-to-market valuation effects and other items affecting comparability, unallocated corporate items totaled $50 million net expense this year compared to $66 million net expense a year ago.

Divestiture gain totaled $96 million in the third quarter related to the sale of the Canada yogurt business (please see Note 2 below for more information on this transaction). Restructuring, impairment, and other exit costs totaled $1 million of net recoveries in the third quarter compared to a $6 million net expense a year ago (please see Note 3 below for more information on these charges).

Net interest expense totaled $136 million in the third quarter of fiscal 2025 compared to $122 million a year ago, driven primarily by higher average long-term debt levels. The effective tax rate in the quarter was 19.8 percent compared to 18.5 percent last year (please see Note 6 below for more information on our effective tax rate). The third-quarter adjusted effective tax rate was 21.0 percent compared to 18.4 percent a year ago, driven primarily by certain non-recurring discrete tax benefits in fiscal 2024, partially offset by favorable earnings mix by jurisdiction in fiscal 2025.

Cash Flow Generation and Cash Returns

Cash provided by operating activities totaled $2.3 billion through nine months of fiscal 2025 compared to $2.4 billion a year ago, driven primarily by changes in net earnings excluding impairment charges and divestiture gains. Capital investments totaled $405 million compared to $486 million a year ago. Dividends paid of $1.0 billion essentially matched year-ago levels. General Mills repurchased approximately 14 million shares of common stock through nine months of fiscal 2025 for a total of $902 million compared to $1.6 billion in share repurchases a year ago. Average diluted shares outstanding in the first nine months decreased 4 percent to 560 million.

Fiscal 2025 Outlook and Fiscal 2026 Cost Efficiency Initiatives

Third-quarter topline results finished below expectations, driven by retailer inventory headwinds in North America Retail and North America Pet, a slowdown in U.S. snacking categories, and softer demand in U.S. away-from-home food channels. The company expects macroeconomic uncertainty to continue to impact consumers in the fourth quarter. Its fourth-quarter plans include investments in consumer value, media support, and in-store visibility. In addition, the company plans to make investments in the fourth quarter in advance of significant fiscal 2026 new product launches. Based on these assumptions, General Mills updated its full-year fiscal 2025 financial targets²:

With a sharp focus on accelerating organic sales growth in fiscal 2026, the company provided increased visibility to cost efficiency programs that will enable greater investment in innovation, brand support, and value for consumers. Its industry-leading Holistic Margin Management productivity program is expected to deliver at least 5 percent savings in cost of goods sold in fiscal 2026, which represents approximately $600 million in gross productivity savings. In addition, the company has commenced a review of expected cost-savings initiatives that target savings of at least $100 million in fiscal 2026. The company plans to share further details in the coming months as specific initiatives are determined.

General Mills will issue pre-recorded management remarks today, March 19, 2025, at approximately 6:30 a.m. Central time (7:30 a.m. Eastern time) and will hold a live, webcasted question and answer session beginning at 8:00 a.m. Central time (9:00 a.m. Eastern time). The pre-recorded remarks and the webcast will be made available at www.generalmills.com/investors.

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that are based on our current expectations and assumptions. These forward-looking statements, including the statements under the caption "Fiscal 2025 Outlook and Fiscal 2026 Cost Efficiency Initiatives," and statements made by Mr. Harmening, are subject to certain risks and uncertainties that could cause actual results to differ materially from the potential results discussed in the forward-looking statements. In particular, our predictions about future net sales and earnings could be affected by a variety of factors, including: imposed and threatened tariffs by the United States and its trading partners; disruptions or inefficiencies in the supply chain; competitive dynamics in the consumer foods industry and the markets for our products, including new product introductions, advertising activities, pricing actions, and promotional activities of our competitors; economic conditions, including changes in inflation rates, interest rates, tax rates, tariffs, or the availability of capital; product development and innovation; consumer acceptance of new products and product improvements; consumer reaction to pricing actions and changes in promotion levels; acquisitions or dispositions of businesses or assets; changes in capital structure; changes in the legal and regulatory environment, including tax legislation, the imposition of tariffs, labeling and advertising regulations, and litigation; impairments in the carrying value of goodwill, other intangible assets, or other long-lived assets, or changes in the useful lives of other intangible assets; changes in accounting standards and the impact of critical accounting estimates; product quality and safety issues, including recalls and product liability; changes in consumer demand for our products; effectiveness of advertising, marketing, and promotional programs; changes in consumer behavior, trends, and preferences, including weight loss trends; consumer perception of health-related issues, including obesity; consolidation in the retail environment; changes in purchasing and inventory levels of significant customers; fluctuations in the cost and availability of supply chain resources, including raw materials, packaging, energy, and transportation; effectiveness of restructuring and cost saving initiatives; volatility in the market value of derivatives used to manage price risk for certain commodities; benefit plan expenses due to changes in plan asset values and discount rates used to determine plan liabilities; failure or breach of our information technology systems; foreign economic conditions, including currency rate fluctuations and tariffs; and political unrest in foreign markets and economic uncertainty due to terrorism or war. The company undertakes no obligation to publicly revise any forward-looking statement to reflect any future events or circumstances.

# # #

Contacts

(Investors) Jeff Siemon: +1-763-764-2301

(Media) Chelcy Walker: +1-763-764-6364

Consolidated Statements of Earnings and Supplementary Information

GENERAL MILLS, INC. AND SUBSIDIARIES (Unaudited) (In Millions, Except per Share Data)

Quarter Ended

Nine-Month Period Ended

Feb. 23,

Feb. 25,

Feb. 23,

Feb. 25,

2025

2024

% Change

2025

2024

% Change

Net sales

4,842.2

5,099.2

(5)

14,930.4

15,143.3

(1) %

Cost of sales

3,203.1

3,391.8

(6)

9,671.4

9,899.5

(2) %

Selling, general, and administrative expenses

844.4

790.9

2,551.5

2,460.7

Divestiture gain

(95.9)

Restructuring, impairment, and other

exit (recoveries) costs

(0.8)

5.8

(114)

2.6

130.6

(98) %

Operating profit

891.4

910.7

(2)

2,800.8

2,652.5

Benefit plan non-service income

(13.9)

(18.6)

(25)

(41.6)

(55.7)

(25) %

Interest, net

136.3

121.7

384.5

356.5

Earnings before income taxes and after-tax

earnings from joint ventures

769.0

807.6

(5)

2,457.9

2,351.7

Income taxes

152.4

149.3

504.6

458.5

After-tax earnings from joint ventures

14.4

18.0

(20)

63.6

65.7

(3) %

Net earnings, including earnings attributable to

noncontrolling interests

631.0

676.3

(7)

2,016.9

1,958.9

Net earnings attributable to

noncontrolling interests

5.4

6.2

(13)

15.7

19.8

(21) %

Net earnings attributable to General Mills

625.6

670.1

(7)

2,001.2

1,939.1

Earnings per share - basic

1.14

1.18

(3)

3.60

3.35

Earnings per share - diluted

1.12

1.17

(4)

3.57

3.33

Quarter Ended

Nine-Month Period Ended

Comparisons as a % of net sales:

Feb. 23,

Feb. 25,

Basis Pt

Feb. 23,

Feb. 25,

Basis Pt

2025

2024

Change

2025

2024

Change

Gross margin

33.9 %

33.5 %

35.2 %

34.6 %

Selling, general, and administrative expenses

17.4 %

15.5 %

190

17.1 %

16.2 %

Operating profit

18.4 %

17.9 %

18.8 %

17.5 %

130

Net earnings attributable to General Mills

12.9 %

13.1 %

(20)

13.4 %

12.8 %

Quarter Ended

Nine-Month Period Ended

Comparisons as a % of net sales excluding

Feb. 23,

Feb. 25,

Basis Pt

Feb. 23,

Feb. 25,

Basis Pt

certain items affecting comparability (a):

2025

2024

Change

2025

2024

Change

Adjusted gross margin

33.4 %

34.0 %

(60)

35.1 %

34.8 %

Adjusted operating profit

16.5 %

17.9 %

(140)

18.3 %

18.5 %

(20)

Adjusted net earnings attributable to

General Mills

11.4 %

13.2 %

(180)

13.0 %

13.5 %

(50)

Operating Segment Results and Supplementary Information

GENERAL MILLS, INC. AND SUBSIDIARIES

(Unaudited) (In Millions)

Quarter Ended

Feb. 23,

Feb. 25,

2025

2024

% Change

Net sales:

North America Retail

3,009.1

3,242.1

(7)%

International

651.3

680.1

(4)%

North America Pet

623.7

624.5

Flat

North America Foodservice

555.3

551.7

1 %

Total segment net sales

4,839.4

5,098.4

(5)%

Corporate and other

2.8

0.8

Total net sales

4,842.2

5,099.2

(5)%

Operating profit:

North America Retail

648.1

752.2

(14)%

International

18.0

18.2

(1)%

North America Pet

102.2

128.3

(20)%

North America Foodservice

82.3

81.7

1 %

Total segment operating profit

850.6

980.4

(13)%

Unallocated corporate items

55.9

63.9

(13)%

Divestiture gain

(95.9)

Restructuring, impairment, and other

exit (recoveries) costs

(0.8)

5.8

(114)%

Operating profit

891.4

910.7

(2)%

Quarter Ended

Feb. 23,

Feb. 25,

Basis Pt

2025

2024

Change

Segment operating profit as a % of net sales:

North America Retail

21.5%

23.2%

(170)

International

2.8%

2.7%

North America Pet

16.4%

20.5%

(410)

North America Foodservice

14.8%

Flat

Total segment operating profit

17.6%

19.2%

(160)

Nine-Month Period Ended

Feb. 23,

Feb. 25,

2025

2024

% Change

9,347.2

9,620.1

(3)%

2,058.9

2,079.0

(1)%

1,795.6

1,773.7

1 %

1,721.5

1,669.7

3 %

14,923.2

15,142.5

(1)%

7.2

0.8

14,930.4

15,143.3

(1)%

2,256.1

2,410.3

(6)%

62.7

102.8

(39)%

360.9

342.0

6 %

272.3

236.3

15 %

2,952.0

3,091.4

(5)%

244.5

308.3

(21)%

(95.9)

2.6

130.6

(98)%

2,800.8

2,652.5

6 %

Nine-Month Period Ended

Feb. 23,

Feb. 25,

Basis Pt

2025

2024

Change

24.1%

25.1%

(100)

3.0%

4.9%

(190)

20.1%

19.3%

15.8%

14.2%

160

19.8%

20.4%

(60)

See accompanying notes to consolidated financial statements.

Disclaimer

General Mills Inc. published this content on March 19, 2025, and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on March 19, 2025 at 11:20:06.952.