General Mills (GIS) reported stronger-than-expected first-quarter fiscal 2027 results, with adjusted earnings per share (EPS) of $0.75—beating the $0.72 forecast by $0.03 (4.17%). Revenue of $4.4 billion also surpassed the $4.34 billion estimate by $60 million (1.38%). Organic net sales remained flat year-over-year, marking a 2-point improvement over the prior quarter. Adjusted operating profit declined 11% in constant currency to $634 million, while gross and operating margins contracted by 90 and 130 basis points, respectively. Despite these pressures, the company’s stock rose 0.39% premarket to $35.59, within its 52-week range of $31.75 to $51.33.
The company’s guidance for fiscal 2027 reflects cautious optimism: organic net sales are expected to range from a 1.5% decline to a 0.5% gain, with adjusted EPS projected between $3.00 and $3.20. Cost-cutting efforts remain a priority, with a $750 million savings target for the year and a cumulative $3 billion goal by fiscal 2030, split between margin management and global transformation initiatives. Input cost inflation remains elevated, running at the high end of General Mills’ 4% to 5% range.
Operational performance varied by segment. North America Retail saw net sales decline 7% year-over-year, driven by a 4-point headwind from the yogurt divestiture, though organic sales improved by 2 points. Cereal brands like Cheerios and Nature Valley drove double-digit growth, while cat food segments such as Tiki Cat and Blue Tastefuls posted mid-single-digit gains. Love Made Fresh saw a 30% Q1 increase, and Häagen-Dazs’ Cookies & Cream and Belgian Chocolate varieties delivered double-digit retail growth. Foodservice and international segments also reported mid-single-digit organic growth.
Executives emphasized progress under General Mills’ ‘Remarkability Playbook,’ which combines product innovation and operational efficiency. Chairman and CEO Jeff Harmening noted the program is driving better top-line performance but acknowledged ongoing work to modernize operations and supply chains. CFO Kofi Bruce highlighted the company’s ability to outperform expectations despite elevated input costs, while CEO Harmening underscored the broader strategic shift toward long-term flexibility and innovation.
With a market capitalization of $18.95 billion and a dividend yield of 6.88%, General Mills continues to balance growth ambitions with cost discipline amid a challenging macroeconomic backdrop.
