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GENERAL MILLS INC

GIS
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Business Summary

General Mills is a leading global manufacturer and marketer of branded consumer foods with more than 100 brands in 100 countries across six continents, and the company also has 50 percent interests in two strategic joint ventures that manufacture and market food products sold in approximately 130 countries worldwide. The human and pet food categories are highly competitive, with numerous manufacturers of varying sizes in the United States and throughout the world, and the categories in which General Mills participates are also very competitive. The company's principal competitors in these categories are manufacturers, as well as retailers with their own branded products, and all of the company's principal competitors have substantial financial, marketing, and other resources. Competition in the company's product categories is based on product innovation, product quality, price, brand recognition and loyalty, effectiveness of marketing, promotional activity, convenient ordering and delivery to the consumer, and the ability to identify and satisfy consumer preferences.

General Mills' principal strategies for competing in each of its segments include unique consumer insights, effective customer relationships, superior product quality, innovative advertising, product promotion, product innovation aligned with consumers' needs, an efficient supply chain, and price. In most product categories, the company competes not only with other widely advertised, branded products, but also with regional brands and with generic and private label products that are generally sold at lower prices. Internationally, the company competes with both multi-national and local manufacturers. During fiscal 2025, Walmart Inc. and its affiliates accounted for 22 percent of the company's consolidated net sales and 31 percent of net sales of the North America Retail segment, and no other customer accounted for 10 percent or more of consolidated net sales.

General Mills generates revenue by manufacturing and marketing branded consumer food products across a variety of large, global categories including snacks, ready-to-eat cereal, convenient meals, wholesome natural pet food, refrigerated and frozen dough, baking mixes and ingredients, yogurt, and super-premium ice cream. The company's primary customers are grocery stores, mass merchandisers, membership stores, natural food chains, drug, dollar and discount chains, e-commerce retailers, commercial and noncommercial foodservice distributors and operators, restaurants, convenience stores, and pet specialty stores, and the company generally sells to these customers through its direct sales force, using broker and distribution arrangements for certain products and to serve certain types of customers and certain markets.

The North America Retail segment reflects business with a wide variety of grocery stores, mass merchandisers, membership stores, natural food chains, drug, dollar and discount chains, convenience stores, and e-commerce grocery providers, and its product categories are ready-to-eat cereals, refrigerated yogurt, soup, meal kits, refrigerated and frozen dough products, dessert and baking mixes, frozen pizza and pizza snacks, snack bars, fruit snacks, savory snacks, and a wide variety of organic products. For fiscal 2025, North America Retail net sales were $11,907.0 million , a decrease of 5 percent compared to fiscal 2024, and segment operating profit decreased 11 percent to $2,730 million compared to $3,080 million in fiscal 2024. The International segment consists of retail and foodservice businesses outside of the United States and Canada, with product categories including super-premium ice cream and frozen desserts, meal kits, salty snacks, snack bars, dessert and baking mixes, shelf-stable vegetables, and pet food products, and also sells super-premium ice cream and frozen desserts directly to consumers through owned retail shops. For fiscal 2025, International net sales were $2,797.8 million , an increase of 2 percent compared to fiscal 2024, and segment operating profit decreased 23 percent to $96 million compared to $125 million in fiscal 2024. The North America Pet segment includes pet food products sold primarily in the United States and Canada in national pet superstore chains, e-commerce retailers, grocery stores, regional pet store chains, mass merchandisers, and veterinary clinics and hospitals, with product categories including dog and cat food made with whole meats, fruits, and vegetables and other high-quality natural ingredients. For fiscal 2025, North America Pet net sales were $2,470.8 million , an increase of 4 percent compared to fiscal 2024, and segment operating profit increased 3 percent to $501 million compared to $486 million in fiscal 2024. The North America Foodservice segment consists of foodservice businesses in the United States and Canada, with major product categories including ready-to-eat cereals, snacks, refrigerated yogurt, frozen meals, unbaked and fully baked frozen dough products, baking mixes, and bakery flour. For fiscal 2025, North America Foodservice net sales were $2,300.9 million , an increase of 2 percent compared to fiscal 2024, and segment operating profit increased 13 percent to $355 million compared to $316 million in fiscal 2024.

During fiscal 2025, the company acquired NX Pet Holding, Inc., representing Whitebridge Pet Brands' North American premium cat feeding and pet treating business, for a purchase price of $1.4 billion , financing the transaction with cash on hand and new debt, and consolidated Whitebridge Pet Brands into its Consolidated Balance Sheets, recording goodwill of $1,086.7 million , an indefinite-lived intangible asset for the Tiki Pets brand totaling $289.0 million , and a finite-lived customer relationship asset of $31.0 million . During the second quarter of fiscal 2025, the company entered into definitive agreements to sell its North American yogurt businesses to affiliates of Groupe Lactalis S.A. and Sodiaal International for approximately $2.1 billion , and during the third quarter of fiscal 2025, completed the sale of its Canada yogurt business to Sodiaal, recording a pre-tax gain of $95.9 million . During fiscal 2025, the company repurchased 19 million shares of its common stock for $1,203 million , and paid dividends totaling $1,339 million , or $2.40 per share . The company also purchased the outstanding Class A limited membership interests in General Mills Cereals, LLC from the third-party holder for $253 million . During fiscal 2025, the company approved a multi-year global transformation initiative to drive increased productivity by enhancing end-to-end business processes, enabled by targeted organizational actions, and as a result, recorded $70 million of charges in fiscal 2025.

For fiscal 2025, consolidated net sales declined 2 percent to $19.5 billion , and on an organic basis, net sales decreased 2 percent compared to year-ago levels. Operating profit of $3.3 billion decreased 4 percent, and adjusted operating profit of $3.4 billion decreased 7 percent on a constant-currency basis. Diluted EPS declined 5 percent to $4.10 , and adjusted diluted EPS of $4.21 decreased 7 percent on a constant-currency basis. Net cash provided by operations totaled $2,918 million in fiscal 2025, representing a conversion rate of 126 percent of net earnings, and free cash flow was $2,293 million at a conversion rate of 97 percent of adjusted net earnings. Gross margin as a percent of net sales of 34.6 percent decreased 30 basis points compared to fiscal 2024, and operating profit margin of 17.0 percent decreased 30 basis points.

Business Outlook

For fiscal 2026, management's key full-year targets are as follows: organic net sales are expected to range between down 1 percent and up 1 percent ; adjusted operating profit is expected to be down 10 to 15 percent in constant currency from the base of $3.4 billion reported in fiscal 2025; adjusted diluted EPS is expected to be down 10 to 15 percent in constant currency from the base of $4.21 earned in fiscal 2025; and free cash flow conversion is expected to be at least 95 percent of adjusted after-tax earnings.

The company plans to return North America Retail to volume growth, accelerate North America Pet growth with an expanded portfolio, and drive efficiencies to reinvest in growth. This includes a significant strategic investment to launch Blue Buffalo into the fast-growing U.S. fresh pet food sub-category in calendar 2025. The company expects the combination of these growth investments, input cost inflation, and a reset of corporate incentive will outpace expected Holistic Margin Management cost savings of 5 percent of cost of goods sold , savings from the global transformation initiative, and benefits from a 53rd week in fiscal 2026. Additionally, the company expects the net impact of the divestiture of its North American yogurt businesses and the Whitebridge Pet Brands acquisition will reduce adjusted operating profit growth by approximately 5 points in fiscal 2026.

The company expects the combination of growth investments, input cost inflation, and a reset of corporate incentive will outpace expected HMM cost savings of 5 percent of cost of goods sold , savings from the global transformation initiative, and benefits from a 53rd week in fiscal 2026. The company expects approximately 3 percent input cost inflation in fiscal 2026 before the impact of newly enacted tariffs, and expects the gross risk of newly enacted tariffs to be 1 to 2 percent of cost of goods sold , and is attempting to mitigate tariff risk through various methods.

The company expects capital expenditures to be approximately 3.5 percent of reported net sales in fiscal 2026, and these expenditures will fund initiatives that are expected to fuel growth, support innovative products, and continue HMM initiatives throughout the supply chain. The company expects restructuring and transformation charges and transaction and acquisition integration costs related to actions previously announced to total approximately $90 million to $95 million .

For fiscal 2026, the company currently expects the net impact from foreign currency exchange rates, acquisitions and divestitures completed prior to fiscal 2026 and those expected to close in fiscal 2026, and a 53rd week to reduce net sales growth by approximately 4 percent ; foreign currency exchange rates to have an immaterial impact on adjusted operating profit and adjusted diluted EPS growth; and restructuring and transformation charges and transaction and acquisition integration costs related to actions previously announced to total approximately $90 million to $95 million .

The company expects category growth to be below its long-term projections, reflecting less benefit from net price realization and mix amid a continued challenging consumer backdrop. The company experienced broad-based global input cost inflation of 4 percent in fiscal 2025 and fiscal 2024, and expects approximately 3 percent input cost inflation in fiscal 2026 before the impact of newly enacted tariffs, and expects the gross risk of newly enacted tariffs to be 1 to 2 percent of cost of goods sold , and is attempting to mitigate tariff risk through various methods.

Risk Factors

The categories in which the company participates are very competitive, and if the company is not able to compete effectively, its results of operations could be adversely affected, with principal competitors including manufacturers and retailers with their own branded and private label products, all of whom have substantial financial, marketing, and other resources. The company may be unable to maintain its profit margins in the face of a consolidating retail environment, and in fiscal 2025, Walmart accounted for 22 percent of consolidated net sales and 31 percent of net sales of the North America Retail segment, and the loss of any large customer could adversely affect sales and profits. Price changes for commodities the company depends on for raw materials, packaging, and energy may adversely affect profitability, and the company does not fully hedge against changes in commodity prices. As of May 25, 2025, the company had $22.4 billion of goodwill and indefinite-lived intangible assets, and if current expectations for growth rates for sales and profits are not met, or other market factors and macroeconomic conditions were to change, then the company's reporting units or indefinite-lived intangible assets could become significantly impaired, with the Progresso, Nudges, True Chews, and Kitano brand intangible assets having risk of decreasing coverage. As of May 25, 2025, the company had total debt and noncontrolling interests of $14.9 billion , and its level of indebtedness may limit its ability to obtain additional financing or adjust to changing business conditions.

Management Priorities

Management's message emphasizes that the company is executing its Accelerate strategy to drive sustainable, profitable growth and top-tier shareholder returns over the long term, focusing on four pillars: boldly building brands, relentlessly innovating, unleashing scale, and standing for good. Management states that in fiscal 2025, the operating environment was characterized by significant volatility and uncertainty, resulting in value-seeking behaviors by consumers that were deeper and more prolonged than expected, and as a result, the company made important changes to adapt to the evolving environment and put the business on a path back to growth, including increased investment to bring consumers greater value which strengthened pound volume performance as the company exited the year. Management's key priorities for fiscal 2026 are to return North America Retail to volume growth, accelerate North America Pet growth with an expanded portfolio, and drive efficiencies to reinvest in growth. Management provided specific guidance ranges: organic net sales are expected to range between down 1 percent and up 1 percent ; adjusted operating profit is expected to be down 10 to 15 percent in constant currency from the base of $3.4 billion reported in fiscal 2025; adjusted diluted EPS is expected to be down 10 to 15 percent in constant currency from the base of $4.21 earned in fiscal 2025; and free cash flow conversion is expected to be at least 95 percent of adjusted after-tax earnings.

View Source Annual Report on SEC.gov ↗

References

  1. [1] Item 7, MD&A — Results of Segment Operations
  2. [2] Item 7, MD&A — Results of Segment Operations
  3. [3] Item 7, MD&A — Results of Segment Operations
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  6. [6] Item 7, MD&A — Results of Segment Operations
  7. [7] Item 7, MD&A — Results of Segment Operations
  8. [8] Item 7, MD&A — Results of Segment Operations
  9. [9] Item 7, MD&A — Results of Segment Operations
  10. [10] Item 7, MD&A — Results of Segment Operations
  11. [11] Item 7, MD&A — Results of Segment Operations
  12. [12] Item 7, MD&A — Results of Segment Operations
  13. [13] Item 8, Note 3 — Acquisitions and Divestitures
  14. [14] Item 8, Note 3 — Acquisitions and Divestitures
  15. [15] Item 8, Note 3 — Acquisitions and Divestitures
  16. [16] Item 8, Note 3 — Acquisitions and Divestitures
  17. [17] Item 8, Note 3 — Acquisitions and Divestitures
  18. [18] Item 8, Note 3 — Acquisitions and Divestitures
  19. [19] Item 7, MD&A — Cash Flows from Financing Activities
  20. [20] Item 7, MD&A — Cash Flows from Financing Activities
  21. [21] Item 7, MD&A — Cash Flows from Financing Activities
  22. [22] Item 7, MD&A — Cash Flows from Financing Activities
  23. [23] Item 7, MD&A — Cash Flows from Financing Activities
  24. [24] Item 7, MD&A — Fiscal 2025 Consolidated Results of Operations
  25. [25] Item 7, MD&A — Executive Overview
  26. [26] Item 7, MD&A — Executive Overview
  27. [27] Item 7, MD&A — Executive Overview
  28. [28] Item 7, MD&A — Executive Overview
  29. [29] Item 7, MD&A — Executive Overview
  30. [30] Item 7, MD&A — Executive Overview
  31. [31] Item 7, MD&A — Executive Overview
  32. [32] Item 7, MD&A — Fiscal 2025 Consolidated Results of Operations
  33. [33] Item 7, MD&A — Fiscal 2025 Consolidated Results of Operations
  34. [34] Item 7, MD&A — Executive Overview
  35. [35] Item 7, MD&A — Executive Overview
  36. [36] Item 7, MD&A — Executive Overview
  37. [37] Item 7, MD&A — Executive Overview
  38. [38] Item 7, MD&A — Executive Overview
  39. [39] Item 7, MD&A — Executive Overview
  40. [40] Item 7, MD&A — Executive Overview
  41. [41] Item 7, MD&A — Impact of Inflation
  42. [42] Item 7, MD&A — Impact of Inflation
  43. [43] Item 7, MD&A — Cash Flows from Investing Activities
  44. [44] Item 7, MD&A — Forward-Looking Financial Measures
  45. [45] Item 7, MD&A — Forward-Looking Financial Measures
  46. [46] Item 7, MD&A — Forward-Looking Financial Measures
  47. [47] Item 7, MD&A — Impact of Inflation
  48. [48] Item 7, MD&A — Impact of Inflation
  49. [49] Item 7, MD&A — Impact of Inflation
  50. [50] Item 1A, Risk Factors
  51. [51] Item 1A, Risk Factors
  52. [52] Item 1A, Risk Factors
  53. [53] Item 1A, Risk Factors
  54. [54] Item 7, MD&A — Executive Overview
  55. [55] Item 7, MD&A — Executive Overview
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  57. [57] Item 7, MD&A — Executive Overview
  58. [58] Item 8, Consolidated Statements of Earnings
  59. [59] Item 8, Consolidated Statements of Earnings
  60. [60] Item 8, Consolidated Statements of Earnings
  61. [61] Item 8, Consolidated Statements of Earnings
  62. [62] Item 8, Consolidated Statements of Earnings
  63. [63] Item 8, Consolidated Statements of Earnings
  64. [64] Item 8, Consolidated Statements of Earnings
  65. [65] Item 8, Consolidated Statements of Earnings
  66. [66] Item 7, MD&A — Fiscal 2025 Consolidated Results of Operations
  67. [67] Item 7, MD&A — Fiscal 2025 Consolidated Results of Operations
  68. [68] Item 7, MD&A — Fiscal 2025 Consolidated Results of Operations
  69. [69] Item 7, MD&A — Fiscal 2025 Consolidated Results of Operations
  70. [70] Item 7, MD&A — Non-GAAP Measures, Free Cash Flow Conversion Rate
  71. [71] Item 8, Consolidated Balance Sheets
  72. [72] Item 8, Consolidated Balance Sheets
  73. [73] Item 8, Consolidated Balance Sheets
  74. [74] Item 8, Note 3 — Acquisitions and Divestitures
  75. [75] Item 7, MD&A — Non-GAAP Measures, Adjusted Operating Profit
  76. [76] Item 7, MD&A — Non-GAAP Measures, Adjusted Operating Profit
  77. [77] Item 7, MD&A — Non-GAAP Measures, Adjusted Operating Profit
  78. [78] Item 7, MD&A — Fiscal 2025 Consolidated Results of Operations
  79. [79] Item 7, MD&A — Fiscal 2025 Consolidated Results of Operations
  80. [80] Item 7, MD&A — Results of Segment Operations
  81. [81] Item 7, MD&A — Results of Segment Operations
  82. [82] Item 7, MD&A — Results of Segment Operations
  83. [83] Item 7, MD&A — Results of Segment Operations

Analysis on 6/21/2026