Q1 Sales Drop
General Mills Reports Lower First-Quarter Sales While Reaffirming Full-Year Targets
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Key Points
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Reported GAAP operating profit fell 63% to $634 million, primarily because the prior-year quarter included a $1.05 billion gain from the U.S. yogurt-business sale.
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General Mills generated $298 million in operating cash flow and invested $90 million in capital expenditures; it paid $330 million in dividends and made no share repurchases during the quarter, compared with $500 million in buybacks a year earlier.
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The company completed the sale of its Brazil business to Café Três Corações on Sept. 2, 2026, after the quarter ended, and recorded a $24 million non-cash pretax valuation loss related to the disposal group in the quarter.
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General Mills expects fiscal 2027 interest expense of approximately $580 million, an adjusted tax rate of 20% and an average share count roughly unchanged from the prior year.
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Before the results, analysts tracked a consensus estimate of about $0.717 in quarterly EPS and $4.351 billion in revenue, while the company’s shares were trading near $35.54 and had a 52-week range of $31.75 to $51.33.
General Mills reported first-quarter fiscal 2027 net sales of $4.4 billion, down 3% year over year, as the yogurt divestiture and weak consumer demand weighed on results Yahoo Finance. Adjusted earnings per share fell 13% to $0.75, though the company beat analyst estimates and reaffirmed its full-year guidance for organic sales between a 1.5% decline and 0.5% growth Morningstar.
North America Retail sales softened while Foodservice and International operations improved. Despite profit headwinds, General Mills maintained its full-year adjusted earnings target of $3.00 to $3.20 per share, though UBS downgraded its outlook, citing slim chances for near-term sales recovery Bay Street.
Yogurt Sale and Divestiture Drag Profit
General Mills' reported GAAP operating profit tumbled 63% to $634 million, primarily due to the prior-year quarter including a $1.05 billion gain from the U.S. yogurt-business sale Bay Street. The company also recorded a $24 million non-cash pretax valuation loss tied to its Brazil business disposal, which closed on September 2, 2026 Yahoo Finance.
Cash Generation Slows Amid Reduced Buybacks
General Mills generated $298 million in operating cash flow during the quarter and spent $90 million on capital expenditures Bay Street. The company paid $330 million in dividends but made zero share repurchases, a sharp reversal from $500 million in buybacks in the prior-year quarter Morningstar.
North America Retail Weakens While International Stabilizes
Sales fell across North America Retail, the company's largest segment, while Foodservice and International operations posted gains Morningstar. Pet food sales remained flat year over year, though profit in that division declined Yahoo Finance. The weakness in North America reflected persistent consumer pullback amid high inflation.
UBS Cuts Earnings View on Bleak Demand Outlook
UBS maintained a Sell rating on General Mills, lowering its fiscal-year earnings estimate to $3.01 per share and arguing that a return to sales growth appeared unlikely in the near term Bay Street. The analyst firm flagged higher input costs and inflation as ongoing headwinds. General Mills expects fiscal 2027 interest expense of $580 million and an adjusted tax rate of 20% Yahoo Finance.
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