General Mills (NYSE:GIS) shares dropped 3.6% on Tuesday morning after the packaged food company lowered its outlook for fiscal 2026, pointing to a tougher consumer backdrop.
The Minneapolis-based group, whose portfolio includes brands such as Cheerios and Betty Crocker, now expects organic net sales to decline between 1.5% and 2% in fiscal 2026. That compares with its prior projection of a range between a 1% drop and 1% growth. The company also revised down its expectations for adjusted operating profit and adjusted diluted earnings per share, forecasting a 16% to 20% decrease in constant currency—worse than the earlier outlook of a 10% to 15% decline.
General Mills said the revised guidance reflects subdued consumer sentiment, elevated uncertainty and ongoing volatility, all of which have pressured category growth and altered purchasing behavior. Management noted that the anticipated recovery in volumes has taken longer and required more investment than originally planned.
Even so, the company continues to emphasize its “Remarkability playbook” as a driver of long-term growth. It is allocating resources to its portfolio of leading brands, eight of which each generate more than $1 billion in retail sales. Management also expects new product launches to contribute roughly 25% growth in net sales in fiscal 2026, with innovation focused on consumer preferences such as bold flavors, familiar classics and better-for-you offerings.
“Since launching our Accelerate strategy six years ago, we’ve been hard at work transforming General Mills,” said Jeff Harmening, chairman and CEO. “We’ve strategically reshaped nearly a third of our portfolio, built advantaged digital capabilities, and delivered industry-leading cost efficiency.”
The company reiterated its target of converting at least 95% of adjusted after-tax earnings into free cash flow in fiscal 2026.