General Mills said its turnaround is progressing, slowly but surely. The Cheerios and Pillsbury dough maker is working to win back inflation-weary customers with lower prices and new products that better resonate with today's consumers. The company spent much of last year investing in affordability in order to better appeal to stressed shoppers.
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Early results are promising, with Chief Executive Jeff Harmening saying General Mills' fiscal 2027 is off to an encouraging start. The company reported lower profit and sales in the latest quarter; however, the declines weren't as steep as the company and Wall Street expected. Shares were little changed in premarket trading.
Sales for the first quarter ended Aug. 30 fell 2.8%, to $4.39 billion, but came in ahead of Wall Street models for $4.35 billion, according to FactSet. The company attributed the decline primarily to the sale of its U.S. yogurt business last year. On an organic basis, sales were essentially flat, the company said.
Looking forward, General Mills said it will continue to remove costs from the business, as it modernizes its operations, retools its supply chain and increases its flexibility. The company remains on track to deliver $750 million in savings this year, and $3 billion in savings by 2030. "These savings will help us fund investments in our brands, offset inflation, and accelerate our earnings and cash flow growth in fiscal '28 and beyond," McNabb said.
General Mills' progress against its cost-saving initiatives also gave the company confidence to back its outlook for the year, which calls for adjusted earnings of $3 to $3.20 a share. Analysts are looking for $3.07 a share. Fiscal first-quarter adjusted earnings came in at 75 cents a share, ahead of Wall Street models for 72 cents a share.
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