General Mills has forecasted a decline in its annual profit as economic uncertainty continues to affect consumer spending in the U.S. The company’s CEO, Jeff Harmening, highlighted that ongoing tariff policies, global conflicts, and changing regulations have created a challenging environment for businesses. He noted that consumers are likely to remain cautious and prioritize value in their purchases.
The company’s shares dropped by 2% during early trading. Despite efforts to boost sales through new product launches, such as an updated version of its Blue Buffalo pet food line, analysts predict that increased investments in marketing and acquisitions may strain profit margins. Consumer Edge analyst Connor Rattigan remarked that while these investments could pressure profitability, they are essential for driving volume growth, particularly in the North America Retail segment.
For the fiscal year, General Mills anticipates an adjusted profit decline between 10% and 15%, surpassing analysts’ projections of a 4.8% drop. In the fourth quarter ending May 25, the company reported sales of $4.56 billion, slightly below expectations of $4.59 billion. Sales in its North America retail division fell by 10%, though this was partially offset by a 12% increase in pet segment sales. The company’s adjusted earnings per share for the quarter stood at 74 cents, exceeding estimates of 71 cents.
— news from Reuters
— News Original —
General Mills forecasts weak annual profit as economic uncertainty weighs
Economic uncertainty arising from President Donald Trump ‘s shifting tariff policies has weighed on consumer spending in the U.S., challenging General Mills ‘ efforts to drum up sales.
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“We expect the operating environment will remain volatile, with consumers pressured by widespread uncertainty from tariffs, global conflicts, and changing regulations,” CEO Jeff Harmening said.
“Amid this uncertainty, we expect consumers to remain cautious and continue seeking value.”
Shares of the Cheerios-maker were down 2% in early trading.
The company has been trying to boost demand through new products, such as a fresh version of its Blue Buffalo pet food, betting on a rise in demand for the minimally processed fresh pet food market. But analysts expect investments in marketing and acquisitions to take a toll on its margins.
“While increased investments will pressure profitability, returning to volume growth, especially in North America Retail, is the first step to return to on-algorithm delivery, and might be a necessary pill to swallow,” said Consumer Edge analyst Connor Rattigan.
The company expects full-year adjusted profit to decline between 10% and 15%, compared to analysts ‘ estimates of a 4.8% decline, according to data compiled by LSEG.
For the fourth quarter ended May 25, General Mills posted sales of $4.56 billion, narrowly missing expectations of $4.59 billion.
Net sales at its North America retail segment, a major revenue contributor, were down 10%, offsetting gains from a 12% rise in General Mills ‘ pet segment sales in the region.
The company, however, posted an adjusted profit per share of 74 cents for the reported quarter, above analysts ‘ estimates of 71 cents.
Reporting by Neil J Kanatt in Bengaluru; Editing by Leroy Leo