Fourth-quarter earnings beat forecasts
General Mills Inc. (NYSE:GIS) reported stronger-than-expected fourth-quarter results on Wednesday, beating Wall Street forecasts for both earnings and revenue, although its guidance for fiscal 2027 came in below analyst expectations.
Shares of the food manufacturer rose more than 4% in pre-market trading following the earnings release.
Adjusted earnings per share for the quarter ended May 31, 2026, came in at $0.95, surpassing the consensus estimate of $0.81 by $0.14.
Revenue increased 1% year-over-year to $4.6 billion, edging above analysts’ expectations of $4.58 billion. The company said results benefited from an additional trading week in fiscal 2026, which contributed approximately seven percentage points to sales growth.
Outlook disappoints despite solid quarter
Looking ahead, General Mills forecast adjusted earnings per share of between $3.00 and $3.20 for fiscal 2027, below the analyst consensus of $3.41.
The midpoint of the guidance range, $3.10 per share, is approximately $0.31 below market expectations.
The company also expects organic net sales to range between a decline of 1.5% and growth of 0.5%, while adjusted operating profit is projected to fall between 8% and 13% on a constant-currency basis.
“We finished fiscal 2026 on a positive note, delivering fourth-quarter adjusted results that met our expectations while continuing to strengthen our foundation to position General Mills for long-term success,” said CEO Jeff Harmening.
Margins improve as company targets further savings
Adjusted operating profit rose 13% in constant currency to $705 million during the quarter, supported by favourable pricing, product mix and improved margins.
Adjusted gross margin expanded by 150 basis points to 34.2% of net sales. The company also received a 60-basis-point benefit from favourable trade expense timing.
General Mills announced plans to deliver $3 billion in cumulative cost savings by fiscal 2030, including approximately $750 million during fiscal 2027.
Management said the savings will primarily come from its Holistic Margin Management productivity programme and broader global transformation initiatives.
International and pet food businesses outperform
Performance varied across the company’s operating divisions.
North America Retail revenue declined 4% to $2.5 billion, although organic sales were unchanged from the prior year.
The North America Pet business posted 4% revenue growth to $702 million, while the International segment delivered the strongest performance, with sales rising 16% to $858 million.