General Mills earns 75 cents a share and holds its outlook as foodservice price and mix rise 5 points

General Mills (GIS) reported adjusted earnings of 75 cents a share for its fiscal first quarter, down 13% in constant currency, on net sales of $4.4 billion, down 3%, according to its earnings release filed with the SEC on Wednesday. That was above the 72-cent Zacks consensus on Nasdaq that we cited in Tuesday's preview, against 86 cents a year earlier. The company reaffirmed its full-year outlook.

The stock was up 0.4% at $35.59 before the open, according to Nasdaq data at 8:52 a.m. Eastern.

GAAP earnings fell 67% to 74 cents a share. That drop is mostly an accounting comparison: a year ago the quarter included a gain of about $1 billion from selling the U.S. yogurt business.

The split the headline hides

Organic net sales, which strip out the yogurt sale and currency, were flat overall. Underneath, the segments moved in opposite directions, and the release breaks each one into volume and price/mix:

In grocery, where General Mills said last year's price cuts are now complete, price/mix was slightly negative and volume still fell. In pet food, volume fell 6 points, with changes in retailer inventory a modest headwind, but price and mix more than made up for it. In foodservice, which sells to restaurants and other away-from-home food operators and grew on cereal and frozen meals, volume dipped 1 point while price/mix added 5, and segment profit rose 12%.

Who it hits

For a restaurant or cafeteria operator buying General Mills products, that 5-point price/mix figure is the useful number. It means the company collected roughly 5% more per unit sold into foodservice than a year ago, a combination of higher prices and a shift toward pricier items. The release does not separate the two. It is a sharper increase than the grocery side, where consumer pricing went slightly the other way.

The company also flagged its own cost pressure. Adjusted gross margin fell 90 basis points to 33.3% on higher input costs, and net interest expense rose to $142 million from $133 million, which General Mills attributed mainly to higher interest rates.

The outlook, and no buybacks

General Mills kept its fiscal 2027 targets: organic net sales between down 1.5% and up 0.5%, adjusted operating profit down 8% to 13% in constant currency, and adjusted EPS of $3.00 to $3.20. It still expects at least $750 million of cost savings this year to offset input cost inflation and brand spending, and says category growth will stay below its long-term rate because of "a continued challenging consumer backdrop."

One line in the cash section stands out: the company repurchased no shares in the quarter, against $500 million a year earlier. Dividends were steady at $330 million. Cash from operations fell to $298 million from $397 million, partly because of taxes on the yogurt sale. The Brazil business was sold on September 2, after the quarter ended.

Sources: General Mills Q1 fiscal 2027 release (SEC), Nasdaq quote and earnings data. This is market information, not investment advice.