General Mills Inc (NYSE:GIS, XETRA:GRM) reported third quarter fiscal 2026 results that fell short of analyst expectations, with shares little changed at around $39 late morning on Wednesday as the company reaffirmed its full-year guidance.
The company posted net sales of $4.4 billion, down 8% year-over-year due to lower volumes and divestitures. This was slightly below analyst expectations of approximately $4.44 billion.
Adjusted EPS came in at $0.64, missing consensus estimates of about $0.75. Adjusted operating profit was $547 million, down 32% in constant currency, while operating profit was $525 million, a 41% decline from the prior year.
Gross margin fell 310 basis points to 30.8%, driven by higher input costs partially offset by favorable pricing and product mix, including benefits from North American yogurt divestitures.
General Mills reaffirmed its full-year fiscal 2026 guidance, stating that organic net sales are expected to decline 1.5% to 2%.
The company also expects adjusted operating profit and adjusted diluted EPS to fall 16% to 20% in constant currency. Free cash flow conversion is projected to be at least 95% of adjusted after-tax earnings.
The company noted that the combined effects of divestitures, acquisitions, foreign currency exchange, and the 53rd week are expected to reduce full-year net sales growth by approximately 4%, while foreign currency exchange is not expected to have a material impact on adjusted operating profit or adjusted EPS growth.
“We’re reaffirming our fiscal 2026 guidance today, as our focus on executing our Remarkability playbook continued to deliver stronger competitiveness for our brands in the third quarter,” General Mills CEO Jeff Harmening said.
“We started the year expecting that our investments, divestitures, and unfavorable timing comparisons would drive declines in our sales and earnings results through our first three quarters, even as we improved our volume and market share. And that’s what we’ve seen play out.”
Analysts at Jefferies described the quarter as “volatile,” citing retailer inventory pressures in North America, weather-related supply disruptions, trade expense timing, and M&A effects.
They noted that management’s decision to maintain full-year guidance reflects expectations that some headwinds will reverse in Q4, including the benefit of a 53rd week, and highlighted that investments in fiscal 2026 are expected to support organic sales growth in fiscal 2027.
Overall, the analysts said, “a lot of puts and takes reduce visibility” for the near term.