General Mills Inc (NYSE:GIS, ETR:GRM) on Wednesday forecast a steeper-than-expected drop in full-year profit, citing weaker demand for snacks and refrigerated baked goods, along with rising costs and tariff pressures that are expected to weigh on margins.
The Cheerios maker said it expects fiscal 2026 adjusted operating income to fall between 10% and 15%, a sharper decline than the 6.5% drop analysts polled by LSEG had estimated. It also projected adjusted earnings per share to decline by the same range, compared with Wall Street's expectation of a 4.8% decrease.
"Our number one goal in FY 26 is to restore volume-driven organic sales growth," CEO Jeff Harmening said.
For the fourth quarter ended May 26, General Mills reported adjusted EPS of $0.74, beating estimates, but revenue fell 6% to $4.56 billion, missing expectations. Net income came in at $294 million.
The company said its investments in consumer value helped drive improved volume trends in the quarter, but the timing of trade expenses weighed on profit margins.
For fiscal 2025, General Mills posted a 2% decline in net sales to $19.5 billion. Operating profit fell 4% to $3.3 billion, while net profit declined 8% to $2.3 billion.
Shares of General Mills fell 3.8% in morning trading following the disappointing outlook.