General Mills Q1 earnings fall 67% to $397M
Management expects at least $750 million in fiscal 2027 savings against forecast input-cost inflation of 4 to 5%.
General Mills reported first-quarter fiscal 2027 net sales of $4,389.5 million, down 3% from a year earlier, while organic net sales were flat. Net earnings attributable to General Mills were $397.0 million and diluted earnings per share were $0.74, each down 67%. The prior-year quarter included a $1,054.4 million divestitures gain from the U.S. yogurt business sale.
Adjusted operating profit was $634.0 million, down 11% on a constant-currency basis, and adjusted diluted EPS was $0.75, down 13% on a constant-currency basis. Management cited higher input costs and lower contributions from volume growth, partly offset by favorable net price realization and mix.
General Mills completed the sale of its Brazil business to 3corações on September 2, 2026, after quarter-end. The agreement set a R$800.0 million base price, subject to specified deductions and customary post-closing adjustments; the company expects to record customary sale-price adjustments in fiscal 2027’s second quarter. It recorded an additional $23.7 million non-cash pre-tax valuation loss on the business in the first quarter. Management expects at least $750 million in fiscal 2027 savings amid forecast input-cost inflation of 4 to 5%.
Positive
- None.
Negative
- Net earnings attributable to General Mills fell 67% to $397.0 million.
- Adjusted diluted earnings per share fell 13% to $0.75 on a constant-currency basis.
Filing Explained
General Mills reports no common shares repurchased in the quarter ended
Key Figures
Net sales: $4,389.5 million
Net earnings attributable to General Mills: $397.0 million
Diluted earnings per share: $0.74
+3 more
6 metrics
Net sales
$4,389.5 million
Quarter ended August 30, 2026; down 3% from the prior-year quarter
Net earnings attributable to General Mills
$397.0 million
Quarter ended August 30, 2026; down 67% from the prior-year quarter
Diluted earnings per share
$0.74
Quarter ended August 30, 2026; down 67% from the prior-year quarter
Adjusted operating profit
$634.0 million
Quarter ended August 30, 2026; down 11% on a constant-currency basis
Adjusted diluted earnings per share
$0.75
Quarter ended August 30, 2026; down 13% on a constant-currency basis
Brazil business sale base price
R$800.0 million
Definitive agreement; subject to specified deductions and customary post-closing adjustments
Key Terms
organic net sales growth rates, constant-currency basis, mark-to-market valuation, accelerated share repurchase, +1 more
5 terms
organic net sales growth rates financial
"organic net sales growth rates for our consolidated net sales"
constant-currency basis financial
"decreased 11 percent on a constant-currency basis"
A constant-currency basis is a way of reporting financial results that removes the effect of changes in exchange rates by converting past and current foreign-currency figures using the same exchange rates. It lets readers compare sales, revenue growth, or other metrics as if currency values had not moved, revealing underlying business performance much like comparing prices after fixing the same exchange rate on a price tag. Investors use it to separate operational changes from swings in currency values.
mark-to-market valuation financial
"Net mark-to-market valuation of certain commodity positions"
An accounting method that records an asset or liability at its current market price rather than its original purchase cost. It’s like updating the value of an item in your inventory to whatever someone would pay for it today; for investors, mark-to-market shows the real-time worth of holdings and can cause reported profits, losses, and net worth to swing with market prices, improving transparency but increasing short-term volatility.
accelerated share repurchase financial
"we entered into two accelerated share repurchase (ASR) agreements"
An accelerated share repurchase is a deal where a company hires a bank to buy back a large block of its own stock immediately on the open market, with the bank later settling the exact number of shares over time. For investors it matters because the immediate reduction in shares outstanding can raise per‑share earnings and often supports the stock price, but it also uses company cash or borrowing and can change liquidity and future growth funding.
Level 3 assets financial
"These fair values are Level 3 assets in the fair value hierarchy"
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
How much revenue did General Mills (GIS) report in Q1 fiscal 2027?
General Mills reported net sales of $4,389.5 million for the quarter ended August 30, 2026, down 3% from the prior-year quarter. Net sales were $4,517.5 million in the quarter ended August 24, 2025, while organic net sales were flat in the latest quarter.
How much did GIS earn in Q1 fiscal 2027?
Net earnings attributable to General Mills were $397.0 million for the quarter ended August 30, 2026, down 67% from $1,204.2 million a year earlier. Diluted earnings per share were $0.74, also down 67% from $2.22.
What cost savings does General Mills expect in fiscal 2027?
General Mills expects at least $750 million in total savings from its Holistic Margin Management productivity program, global transformation initiative, and other cost savings actions. The savings are part of its $3 billion cumulative cost savings target through fiscal 2030 and are expected to help offset forecast input-cost inflation of 4 to 5% and increased product innovation and renovation investments.
What were the terms of the GIS Brazil business sale?
General Mills completed the sale of its Brazil business to Café Três Corações S.A. (3corações) on September 2, 2026. The definitive agreement set a R$800.0 million base price, subject to specified deductions and customary post-closing adjustments; the company expects to record customary sale-price adjustments in the second quarter of fiscal 2027.
AI-generated analysis. How Rhea-AI works. Not financial advice.
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
FOR THE QUARTERLY PERIOD ENDED AUGUST 30, 2026
FOR THE TRANSITION PERIOD FROM _____________________ TO _________
Commission file number: 001-01185
________________
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of | (I.R.S. Employer |
incorporation or organization) | Identification No.) |
(Address of principal executive offices) | (Zip Code) |
(763 ) 764-7600
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
4.750% Series A Fixed-to-Fixed Reset Rate Junior Subordinated Notes due 2056 | ||||
5.250% Series B Fixed-to-Fixed Reset Rate Junior Subordinated Notes due 2056 |
_______________
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted
pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit such files). Yes ☑ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller
reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller
reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
☑ | Accelerated filer | ☐ | Non-accelerated filer | ☐ | Smaller reporting company |
Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for
complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes ☐ No ☑
Number of shares of Common Stock outstanding as of September 16, 2026: 534,687,144 (excluding 219,926,184 shares held in the
treasury).
3
General Mills, Inc.
Table of Contents
Page | |
PART I – Financial Information | |
Item 1. Financial Statements | |
Consolidated Statements of Earnings for the quarters ended August 30, 2026 and August 24, 2025 | 4 |
Consolidated Statements of Comprehensive Income for the quarters ended August 30, 2026 and August 24, 2025 | 5 |
Consolidated Balance Sheets as of August 30, 2026 and May 31, 2026 | 6 |
Consolidated Statements of Total Equity for the quarters ended August 30, 2026 and August 24, 2025 | 7 |
Consolidated Statements of Cash Flows for the quarters ended August 30, 2026 and August 24, 2025 | 8 |
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations | 22 |
Item 3. Quantitative and Qualitative Disclosures About Market Risk | 35 |
Item 4. Controls and Procedures | 36 |
PART II – Other Information | |
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds | 36 |
Item 5. Other Information | 36 |
Item 6. Exhibits | 37 |
Signatures | 38 |
4
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements.
Consolidated Statements of Earnings
GENERAL MILLS, INC. AND SUBSIDIARIES
(Unaudited) (In Millions, Except per Share Data)
Quarter Ended | |||
Aug. 30, 2026 | Aug. 24, 2025 | ||
Net sales | $ | $ | |
Cost of sales | |||
Selling, general, and administrative expenses | |||
Divestitures gain | ( | ||
Restructuring, transformation, impairment, and other exit costs | |||
Operating profit | |||
Benefit plan non-service income | ( | ( | |
Interest, net | |||
Earnings before income taxes and after-tax earnings from joint ventures | |||
Income taxes | |||
After-tax earnings from joint ventures | |||
Net earnings, including earnings (loss) attributable to noncontrolling interests | |||
Net earnings (loss) attributable to noncontrolling interests | ( | ||
Net earnings attributable to General Mills | $ | $ | |
Earnings per share – basic | $ | $ | |
Earnings per share – diluted | $ | $ | |
See accompanying notes to consolidated financial statements
5
Consolidated Statements of Comprehensive Income
GENERAL MILLS, INC. AND SUBSIDIARIES
(Unaudited) (In Millions)
Quarter Ended | |||
Aug. 30, 2026 | Aug. 24, 2025 | ||
Net earnings, including earnings (loss) attributable to noncontrolling interests | $ | $ | |
Other comprehensive income (loss), net of tax | |||
Foreign currency translation | ( | ( | |
Net actuarial loss | ( | ||
Other fair value changes: | |||
Hedge derivatives | |||
Reclassification to earnings: | |||
Hedge derivatives | |||
Amortization of losses and prior service costs | |||
Other comprehensive income (loss), net of tax | ( | ||
Total comprehensive income | |||
Comprehensive income attributable to noncontrolling interests | |||
Comprehensive income attributable to General Mills | $ | $ | |
See accompanying notes to consolidated financial statements.
6
Consolidated Balance Sheets
GENERAL MILLS, INC. AND SUBSIDIARIES
(In Millions, Except Par Value)
Aug. 30, 2026 | May 31, 2026 | ||
(Unaudited) | |||
ASSETS | |||
Current assets: | |||
Cash and cash equivalents | $ | $ | |
Receivables | |||
Inventories | |||
Prepaid expenses and other current assets | |||
Total current assets | |||
Land, buildings, and equipment | |||
Goodwill | |||
Other intangible assets | |||
Other assets | |||
Total assets | $ | $ | |
LIABILITIES AND EQUITY | |||
Current liabilities: | |||
Accounts payable | $ | $ | |
Current portion of long-term debt | |||
Notes payable | |||
Other current liabilities | |||
Liabilities held for sale | |||
Total current liabilities | |||
Long-term debt | |||
Deferred income taxes | |||
Other liabilities | |||
Total liabilities | |||
Stockholders’ equity: | |||
Common stock, | |||
Additional paid-in capital | |||
Retained earnings | |||
Common stock in treasury, at cost, shares of | ( | ( | |
Accumulated other comprehensive loss | ( | ( | |
Total stockholders’ equity | |||
Noncontrolling interests | |||
Total equity | |||
Total liabilities and equity | $ | $ |
See accompanying notes to consolidated financial statements.
7
Consolidated Statements of Total Equity
GENERAL MILLS, INC. AND SUBSIDIARIES
(Unaudited) (In Millions, Except per Share Data)
Quarter Ended | |||||||
Aug. 30, 2026 | Aug. 24, 2025 | ||||||
Shares | Amount | Shares | Amount | ||||
Total equity, beginning balance | $ | $ | |||||
Common stock, | |||||||
Additional paid-in capital: | |||||||
Beginning balance | |||||||
Stock compensation plans | ( | ||||||
Unearned compensation related to stock unit awards | ( | ( | |||||
Earned compensation | |||||||
Shares purchased | ( | ||||||
Ending balance | |||||||
Retained earnings: | |||||||
Beginning balance | |||||||
Net earnings attributable to General Mills | |||||||
Cash dividends declared ($ | ( | ( | |||||
Ending balance | |||||||
Common stock in treasury: | |||||||
Beginning balance | ( | ( | ( | ( | |||
Shares purchased, including excise tax of $ $ | — | ( | ( | ||||
Stock compensation plans | |||||||
Ending balance | ( | ( | ( | ( | |||
Accumulated other comprehensive loss: | |||||||
Beginning balance | ( | ( | |||||
Comprehensive income (loss) | ( | ||||||
Ending balance | ( | ( | |||||
Noncontrolling interests: | |||||||
Beginning balance | |||||||
Comprehensive income | |||||||
Ending balance | |||||||
Total equity, ending balance | $ | $ | |||||
See accompanying notes to consolidated financial statements.
8
Consolidated Statements of Cash Flows
GENERAL MILLS, INC. AND SUBSIDIARIES
(Unaudited) (In Millions)
Quarter Ended | |||
Aug. 30, 2026 | Aug. 24, 2025 | ||
Cash Flows - Operating Activities | |||
Net earnings, including earnings (loss) attributable to noncontrolling interests | $ | $ | |
Adjustments to reconcile net earnings to net cash provided by operating activities: | |||
Depreciation and amortization | |||
After-tax earnings from joint ventures | ( | ( | |
Distributions of earnings from joint ventures | |||
Stock-based compensation | |||
Deferred income taxes | ( | ||
Pension and other postretirement benefit plan contributions | ( | ( | |
Pension and other postretirement benefit plan costs | ( | ( | |
Divestitures gain | ( | ||
Restructuring, transformation, impairment, and other exit costs | ( | ||
Changes in current assets and liabilities, excluding the effects of acquisitions and divestitures | ( | ||
Other, net | |||
Net cash provided by operating activities | |||
Cash Flows - Investing Activities | |||
Purchases of land, buildings, and equipment | ( | ( | |
Proceeds from divestitures | |||
Investments in affiliates, net | ( | ||
Proceeds from disposal of land, buildings, and equipment | |||
Other, net | ( | ||
Net cash (used) provided by investing activities | ( | ||
Cash Flows - Financing Activities | |||
Change in notes payable | ( | ||
Proceeds from common stock issued on exercised options | |||
Purchases of common stock for treasury | ( | ||
Dividends paid | ( | ( | |
Other, net | ( | ( | |
Net cash used by financing activities | ( | ( | |
Effect of exchange rate changes on cash and cash equivalents | ( | ||
(Decrease) increase in cash and cash equivalents | ( | ||
Cash and cash equivalents - beginning of year (includes $ of May 31, 2026) | |||
Cash and cash equivalents - end of period (includes $ of Aug. 30, 2026) | $ | $ | |
Cash Flows from changes in current assets and liabilities, excluding the effects of acquisitions and divestitures: | |||
Receivables | $( | $ | |
Inventories | ( | ( | |
Prepaid expenses and other current assets | |||
Accounts payable | ( | ( | |
Other current liabilities | |||
Changes in current assets and liabilities | $( | $ | |
See accompanying notes to consolidated financial statements.
9
GENERAL MILLS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(1) Background
prepared in accordance with accounting principles generally accepted in the United States (GAAP) for interim financial information
required for comprehensive financial statements. In the opinion of management, all adjustments considered necessary for a fair
presentation have been included and are of a normal recurring nature, including the elimination of all intercompany transactions.
Operating results for the fiscal quarter ended August 30, 2026, are not necessarily indicative of the results that may be expected for the
fiscal year ending May 30, 2027.
These statements should be read in conjunction with the Consolidated Financial Statements and footnotes included in our Annual
Report on Form 10-K for the fiscal year ended May 31, 2026. The accounting policies used in preparing these Consolidated Financial
Statements are the same as those described in Note 2 to the Consolidated Financial Statements in that Form 10-K.
Certain terms used throughout this report are defined in the “Glossary” section below.
(2) Divestitures
During the fourth quarter of fiscal 2026, we entered into a definitive agreement to sell our business in Brazil to Café Três Corações
S.A. (3corações) for a base price of R$800.0 million, subject to certain specified deductions and customary post-closing adjustments.
As a result, we have classified relevant assets and liabilities (the disposal group) associated with our Brazil business as held for sale in
our Consolidated Balance Sheets as of August 30, 2026, and May 31, 2026. In the fourth quarter of fiscal 2026, upon initial
classification of the disposal group as held for sale, we recorded a $1,031.8 million non-cash pre-tax loss to value the disposal group at
the lower of its carrying value or fair value less costs to sell based on estimated net proceeds, which was based on Level 2 inputs in the
fair value hierarchy and included the impact of accumulated foreign currency translation losses that will be reclassified to earnings
upon sale. In the first quarter of fiscal 2027, we recorded an additional non-cash pre-tax loss of $23.7 million based on changes to the
carrying value of the disposal group, including the change in accumulated foreign currency translation losses, and a revised estimate of
net proceeds. We recorded the loss in restructuring, transformation, impairment, and other exit costs in our Consolidated Statements of
Earnings, and adjusted the reserve for assets held for sale and accrual for the loss in excess of assets held for sale accordingly.
On September 2, 2026, subsequent to the end of the first quarter of fiscal 2027, we completed the sale of our business in Brazil to
3corações. We expect to record certain customary post-closing sale price adjustments in the second quarter of fiscal 2027.
10
In Millions | Aug. 30, 2026 |
Cash and cash equivalents | $ |
Receivables | |
Inventories | |
Prepaid expenses and other current assets | |
Land, buildings, and equipment | |
Other intangible assets | |
Deferred income taxes | |
Other assets | |
Gross assets held for sale | $ |
Reserve for assets held for sale | ( |
Assets held for sale | $ |
Accounts payable | $ |
Other current liabilities | |
Other liabilities | |
Gross liabilities held for sale | |
Loss in excess of assets held for sale | |
Liabilities held for sale | $ |
During the first quarter of fiscal 2026, we completed the sale of our United States yogurt business to Groupe Lactalis S.A. and
recorded a pre-tax gain of $1,046.5 million.
During the third quarter of fiscal 2025, we completed the sale of our Canada yogurt business to Sodiaal International and recorded a
pre-tax gain of $95.9 million. In the first quarter of fiscal 2026, we recorded a sale price adjustment that resulted in a $7.9 million
increase to the pre-tax gain.
(3) Restructuring, Transformation, Impairment, and Other Exit Costs
Quarter Ended | |||
In Millions | Aug. 30, 2026 | Aug. 24, 2025 | |
Valuation loss on held for sale business | $ | $ | |
Charges associated with restructuring and transformation actions previously announced | |||
Total | $ | $ | |
In the first quarter of fiscal 2027, we recorded an additional $23.7 million non-cash pre-tax valuation loss related to the planned
divestiture of our Brazil business. Please see Note 2 for additional information.
In the first quarter of fiscal 2027, we did not undertake any new restructuring or transformation actions. We recorded $0.2 million of
restructuring and transformation charges in the first quarter of fiscal 2027 and $18.3 million of restructuring and transformation
charges in the first quarter of fiscal 2026 related to actions previously announced. We expect these actions to be completed by the end
of fiscal 2030.
We paid net $2.9 million of cash in the first quarter of fiscal 2027 related to restructuring and transformation actions. We paid net
$21.0 million of cash in the same period of fiscal 2026.
11
Quarter Ended | |||
In Millions | Aug. 30, 2026 | Aug. 24, 2025 | |
Restructuring, transformation, impairment, and other exit costs | $ | $ | |
Cost of sales | |||
Total restructuring, transformation, and impairment charges | $ | $ | |
In Millions | Total |
Reserve balance as of May 31, 2026 | $ |
Fiscal 2027 charges, including foreign currency translation | |
Utilized in fiscal 2027 | ( |
Reserve balance as of Aug. 30, 2026 | $ |
The restructuring, transformation, and other exit cost reserves balance as of August 30, 2026, is primarily related to severance costs.
The charges recognized in the roll forward of our reserves for restructuring, transformation, and other exit costs do not include items
charged directly to expense (e.g., asset write-offs, asset impairment charges, and the gain or loss on the sale of restructured assets) and
other periodic exit costs recognized as incurred, as those items are not reflected in our restructuring, transformation, and other exit cost
reserves on our Consolidated Balance Sheets.
(4) Goodwill and Other Intangible Assets
In Millions | Aug. 30, 2026 | May 31, 2026 | ||
Goodwill | $ | $ | ||
Other intangible assets: | ||||
Intangible assets not subject to amortization: | ||||
Brands | ||||
Intangible assets subject to amortization: | ||||
Customer relationships and other finite-lived intangibles | ||||
Less accumulated amortization | ( | ( | ||
Intangible assets subject to amortization, net | ||||
Other intangible assets | ||||
Total | $ | $ |
Based on the carrying value of finite-lived intangible assets as of August 30, 2026, annual amortization expense for each of the next
five fiscal years is estimated to be approximately $19
In Millions | North America Retail | North America Pet (a) | North America Foodservice | International | Corporate and Joint Ventures | Total | ||||||
Balance as of May 31, 2026 | $ | $ | $ | $ | $ | $ | ||||||
Other activity, primarily foreign currency translation | ( | ( | ( | ( | ||||||||
Balance as of Aug. 30, 2026 | $ | $ | $ | $ | $ | $ |
(a)The carrying amounts of goodwill within the North America Pet segment as of May 31, 2026, and August 30, 2026, were net of accumulated
12
In Millions | Total | |
Balance as of May 31, 2026 | $ | |
Other activity, primarily amortization and foreign currency translation | ( | |
Balance as of Aug. 30, 2026 | $ |
In addition, we had $55.0 million of other intangible assets classified as held for sale as of August 30, 2026.
Our annual goodwill and indefinite-lived intangible assets impairment test was performed on the first day of the second quarter of
fiscal 2026. As a result of lower future sales and profitability projections for the business supporting our Uncle Toby’s brand
intangible asset, we determined that the fair value of the brand intangible asset no longer exceeded its carrying value and recorded a
$52.9 million non-cash impairment charge.
In addition, we identified a triggering event due to a sustained decline in market capitalization and stock price in the fourth quarter of
fiscal 2026 reflecting heightened macroeconomic uncertainty and lower market multiples in our industry, which caused a related
increase in our discount rates and required an interim impairment assessment. We performed the interim impairment assessment of our
goodwill and other intangible assets as of May 31, 2026, and determined that the fair values of our North America Pet reporting unit
and our Nudges and True Chews brand intangible assets no longer exceeded the carrying values of the respective assets, primarily
driven by an increase in the discount rates. As a result, in the fourth quarter of fiscal 2026 we recorded $1,750.0 million of non-cash
impairment charges, of which $1,500.0 million related to the North America Pet reporting unit goodwill and $250.0 million related to
the brand intangible assets, all of which are included within our North America Pet segment. The $1,500.0 million goodwill
impairment charge is not deductible for tax purposes.
We recorded these impairment charges in restructuring, transformation, impairment and other exit costs in our Consolidated
Statements of (Loss) Earnings in the fourth quarter of fiscal 2026. Our estimates of the fair values were determined based on
discounted cash flow models using inputs which included our long-range cash flow projections for the businesses, royalty rates,
discount rates, and tax rates. These fair values are Level 3 assets in the fair value hierarchy.
In addition, while having significant coverage as of our May 31, 2026, assessment date, the Blue Buffalo brand intangible asset had
risk of decreasing coverage due to the increase in our discount rates. The Progresso brand intangible asset also had risk of decreasing
coverage. We will continue to monitor applicable businesses for potential impairment. All other reporting unit and intangible asset fair
values were substantially in excess of the carrying values.
(5) Inventories
In Millions | Aug. 30, 2026 | May 31, 2026 | |
Finished goods | $ | $ | |
Raw materials and packaging | |||
Grain | |||
Excess of FIFO over LIFO cost | ( | $( | |
Total | $ | $ |
In addition, we had $74.9 million of inventories classified as held for sale as of August 30, 2026.
(6) Risk Management Activities
Many commodities we use in the production and distribution of our products are exposed to market price risks. We utilize derivatives
to manage price risk for our principal ingredients and energy costs, including grains (oats, wheat, and corn), oils (principally soybean),
natural gas, and diesel fuel. Our primary objective when entering into these derivative contracts is to achieve certainty with regard to
the future price of commodities purchased for use in our supply chain. We manage our exposures through a combination of purchase
orders, long-term contracts with suppliers, exchange-traded futures and options, and over-the-counter options and swaps. We offset
our exposures based on current and projected market conditions and generally seek to acquire the inputs at as close as possible to or
below our planned cost.
We use derivatives to manage our exposure to changes in commodity prices. We do not perform the assessments required to achieve
hedge accounting for commodity derivative positions. Accordingly, the changes in the values of these derivatives are recorded
currently in cost of sales in our Consolidated Statements of Earnings.
13
Although we do not meet the criteria for cash flow hedge accounting, we believe that these instruments are effective in achieving our
objective of providing certainty in the future price of commodities purchased for use in our supply chain. Accordingly, for purposes of
measuring segment operating performance, these gains and losses are reported in unallocated corporate items outside of segment
operating results until such time that the exposure we are managing affects earnings. At that time, we reclassify the gain or loss from
unallocated corporate items to segment operating profit, allowing our operating segments to realize the economic effects of the
derivative without experiencing any resulting mark-to-market volatility, which remains in unallocated corporate items.
Quarter Ended | |||
In Millions | Aug. 30, 2026 | Aug. 24, 2025 | |
Net gain (loss) on mark-to-market valuation of certain commodity positions | $ | $( | |
Net gain on commodity positions reclassified from unallocated corporate items to segment operating profit | ( | ( | |
Net mark-to-market revaluation of certain grain inventories | ( | ||
Net mark-to-market valuation of certain commodity positions recognized in unallocated corporate items | $ | $( | |
As of August 30, 2026, the net notional value of commodity derivatives was $126.0 million, of which $63.9 million related to
agricultural inputs and $62.1 million related to energy inputs. As of May 31, 2026, the net notional value of commodity derivatives
was $126.0 million, of which $48.2 million related to agricultural inputs and $77.8 million related to energy inputs. These contracts
relate to inputs that generally will be utilized within the next 12 months.
We also have net investments in foreign subsidiaries that are denominated in euros. A portion of these net investments are hedged with
euro-denominated bonds as follows:
In Millions | Aug. 30, 2026 | May 31, 2026 | |
Euro-denominated bonds - principal amount | € | € |
The fair values of the derivative positions used in our risk management activities and other assets recorded at fair value were not
material as of August 30, 2026, and were Level 1 or Level 2 assets and liabilities in the fair value hierarchy. We did not significantly
change our valuation techniques from prior periods.
We offer certain suppliers access to third-party services that allow them to view our scheduled payments online. The third-party
services also allow suppliers to finance advances on our scheduled payments at the sole discretion of the supplier and the third party.
We have no economic interest in these financing arrangements and no direct relationship with the suppliers, the third parties, or any
financial institutions concerning these services, including not providing any form of guarantee and not pledging assets as security to
the third parties or financial institutions. All of our accounts payable remain as obligations to our suppliers as stated in our supplier
agreements.
In Millions | Aug. 30, 2026 | May 31, 2026 | |
Accounts payable to suppliers utilizing these third-party services (a) | $ | $ |
(a)As of May 31, 2026, $1,356.5 million of our obligations were included in accounts payable and $43.1 million were included in liabilities held
for sale.
14
(7) Debt
Aug. 30, 2026 | May 31, 2026 | ||||||
In Millions | Notes Payable | Weighted- Average Interest Rate | Notes Payable | Weighted- Average Interest Rate | |||
U.S. commercial paper | $ | $ | |||||
Financial institutions | |||||||
Total | $ | $ | |||||
To ensure availability of funds, we maintain bank credit lines and have commercial paper programs available to us in the United States
and Europe.
In Millions | Borrowing Capacity | Borrowed Amount | |
Committed credit facility expiring October 2029 | $ | $ | |
Uncommitted credit facilities and lines of credit | |||
Total | $ | $ |
We are in compliance with all credit facility covenants.
Long-Term Debt
The fair value of our long-term debt was estimated using market quotations and discounted cash flows based on our current
incremental borrowing rates for similar types of instruments. Long-term debt is a Level 2 liability in the fair value hierarchy. The fair
value and carrying amount of our long-term debt, including the current portion, were as follows:
In Millions | Aug. 30, 2026 | May 31, 2026 | |
Fair Value | $ | $ | |
Carrying Amount |
In the fourth quarter of fiscal 2026, we issued €1.0 billion of 4.75 percent fixed-to-fixed reset rate Series A junior subordinated notes
and €700.0 million of 5.25 percent fixed-to-fixed reset rate Series B junior subordinated notes, each due July 16, 2056. The interest
rate of the Series A and Series B junior subordinated notes will reset on July 16, 2031, and July 16, 2034, respectively, and every fifth
year thereafter. The Series A and Series B junior subordinated notes pay interest annually and may be redeemed by us at any time
during the 90 days prior to their respective first interest reset date and on any interest payment date thereafter, in whole or in part at the
principal amount thereof, and at certain other times at a defined redemption price, in each case plus accrued interest. We used the net
proceeds to repay €250.0 million of floating-rate senior notes due April 22, 2026, $750.0 million of 3.2 percent fixed-rate senior notes
due February 10, 2027, $500.0 million of 4.7 percent fixed-rate senior notes due January 30, 2027, a portion of our outstanding
commercial paper, and for other general corporate purposes. The early redemption of certain senior notes resulted in a net $2.0 million
loss, which was recorded in Interest, net in the Consolidated Statements of (Loss) Earnings in the fourth quarter of fiscal 2026.
In the third quarter of fiscal 2026, we repaid €600.0 million of 0.45 percent fixed-rate senior notes due January 15, 2026, using
proceeds from the issuance of commercial paper and cash on hand.
In the second quarter of fiscal 2026, we repaid €500.0 million of 0.125 percent fixed-rate senior notes due November 15, 2025, with
cash on hand.
Certain of our long-term debt agreements contain restrictive covenants. We are in compliance with all of these covenants.
15
(8) Stockholders’ Equity
Quarter Ended | Quarter Ended | ||||||||||
Aug. 30, 2026 | Aug. 24, 2025 | ||||||||||
General Mills | Noncontrolling Interests | General Mills | Noncontrolling Interests | ||||||||
In Millions | Pretax | Tax | Net | Net | Pretax | Tax | Net | Net | |||
Net earnings, including earnings (loss) attributable to noncontrolling interests | $ | $ | $ | $( | |||||||
Other comprehensive income (loss): | |||||||||||
Foreign currency translation | $ | $( | ( | $( | $ | ( | |||||
Net actuarial loss | ( | ( | |||||||||
Other fair value changes: | |||||||||||
Hedge derivatives | ( | ( | |||||||||
Reclassification to earnings: | |||||||||||
Hedge derivatives (a) | ( | ||||||||||
Amortization of losses and prior service costs (b) | ( | ( | |||||||||
Other comprehensive income (loss): | $ | $( | $( | $ | ( | ||||||
Total comprehensive income | $ | $ | $ | $ | |||||||
(a)Loss reclassified from AOCI into earnings is reported in interest, net for interest rate swaps and in cost of sales and selling, general, and administrative (SG&A) expenses for foreign
exchange contracts.
(b)Loss reclassified from AOCI into earnings is reported in benefit plan non-service income.
In Millions | Aug. 30, 2026 | May 31, 2026 | |
Foreign currency translation adjustments | $( | $( | |
Unrealized loss from hedge derivatives | ( | ( | |
Pension, other postretirement, and postemployment benefits: | |||
Net actuarial loss | ( | ( | |
Prior service credits | |||
Accumulated other comprehensive loss | $( | $( |
(9) Stock Plans
We have various stock-based compensation programs under which awards, including stock options, restricted stock, restricted stock
units, and performance awards, may be granted to employees and non-employee directors. These programs and related accounting are
described in Note 12 to the Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended
May 31, 2026.
Quarter Ended | |||
In Millions | Aug. 30, 2026 | Aug. 24, 2025 | |
Compensation expense related to stock-based payments | $ | $ | |
Quarter Ended | |||
In Millions | Aug. 30, 2026 | Aug. 24, 2025 | |
Shortfall tax expense from stock-based payments | $( | $( | |
As of August 30, 2026, unrecognized compensation expense related to non-vested stock options, restricted stock units, and
performance share units was $184.4 million. This expense will be recognized over 29 months on average.
16
were as follows:
Quarter Ended | |||
In Millions | Aug. 30, 2026 | Aug. 24, 2025 | |
Net cash proceeds | $ | $ | |
Intrinsic value of options exercised | $ | $ | |
We estimate the fair value of each option on the grant date using a Black-Scholes option-pricing model, which requires us to make
predictive assumptions regarding future stock price volatility, employee exercise behavior, dividend yield, and the forfeiture rate. We
estimate our future stock price volatility using the historical volatility over the expected term of the option, excluding time periods of
volatility we believe a marketplace participant would exclude in estimating our stock price volatility. We also have considered, but did
not use, implied volatility in our estimate, because trading activity in options on our stock, especially those with tenors of greater than
6 months, is insufficient to provide a reliable measure of expected volatility. Our method of selecting the other valuation assumptions
is explained in Note 12 to the Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year
ended May 31, 2026.
follows:
Quarter Ended | |||
In Millions | Aug. 30, 2026 | Aug. 24, 2025 | |
Estimated fair values of stock options granted | $ | $ | |
Assumptions: | |||
Risk-free interest rate | |||
Expected term | |||
Expected volatility | |||
Dividend yield | |||
Quarter Ended | |||
In Millions | Aug. 30, 2026 | Aug. 24, 2025 | |
Total grant date fair value | $ | $ | |
17
(10) Earnings Per Share
Quarter Ended | |||
In Millions, Except per Share Data | Aug. 30, 2026 | Aug. 24, 2025 | |
Net earnings attributable to General Mills | $ | $ | |
Average number of common shares – basic EPS | |||
Incremental share effect from: (a) | |||
Stock options | |||
Restricted stock units and performance share units | |||
Average number of common shares – diluted EPS | |||
Earnings per share – basic | $ | $ | |
Earnings per share – diluted | $ | $ | |
(a)Incremental shares from stock options, restricted stock units, and performance share units are computed by the treasury stock method. Stock
options, restricted stock units, and performance share units excluded from our computation of diluted EPS because they were not dilutive were
as follows:
Quarter Ended | |||
In Millions | Aug. 30, 2026 | Aug. 24, 2025 | |
Anti-dilutive stock options, restricted stock units, and performance share units | |||
(11) Share Repurchases
Quarter Ended | |||
In Millions | Aug. 30, 2026 | Aug. 24, 2025 | |
Shares of common stock | |||
Aggregate purchase price | $ | $ | |
In the first quarter of fiscal 2026, we entered into two accelerated share repurchase (ASR) agreements with an unrelated third-party
financial institution to repurchase an aggregate of $500.0 million of our shares of common stock. Under the ASR agreements, we paid
an aggregate of $500.0 million and received an initial delivery of 7.5 million shares of our common stock based on the closing price of
our common stock on July 1, 2025. The value of the initial shares delivered under the ASR agreements represented 80 percent of the
aggregate purchase price, with a fair value of $400.0 million.
The first ASR agreement was settled in the first quarter of fiscal 2026, with a final delivery of 1.2 million additional shares. The final
average purchase price for the first ASR agreement was $50.41 per share, not including costs of execution or excise tax.
In the first quarter of fiscal 2026, we recorded the transactions under the ASR agreements on our Consolidated Balance Sheets as an
increase in treasury stock of $450.0 million and a decrease in additional paid-in capital of $50.0 million. The delivery of 8.7 million
shares of our common stock during the first quarter of fiscal 2026 under the ASR agreements reduced the outstanding shares used to
determine our weighted average shares outstanding for purpose of calculating basic and diluted EPS for the first quarter of fiscal 2026.
(12) Statements of Cash Flows
Quarter Ended | |||
In Millions | Aug. 30, 2026 | Aug. 24, 2025 | |
Net cash interest payments | $ | $ | |
Net income tax payments | $ | $ | |
18
(13) Retirement and Postemployment Benefits
Defined Benefit Pension Plans | Other Postretirement Benefit Plans | Postemployment Benefit Plans | |||||||||
Quarter Ended | Quarter Ended | Quarter Ended | |||||||||
In Millions | Aug. 30, 2026 | Aug. 24, 2025 | Aug. 30, 2026 | Aug. 24, 2025 | Aug. 30, 2026 | Aug. 24, 2025 | |||||
Service cost | $ | $ | $ | $ | $ | $ | |||||
Interest cost | |||||||||||
Expected return on plan assets | ( | ( | ( | ( | |||||||
Amortization of losses (gains) | ( | ( | |||||||||
Amortization of prior service costs (credits) | ( | ( | ( | ( | |||||||
Other adjustments | |||||||||||
Net expense (income) | $ | $ | $( | $( | $ | $ | |||||
(14) Income Taxes
In December 2021, the Organization for Economic Cooperation and Development (OECD) established a framework, referred to as
Pillar 2, designed to ensure large multinational enterprises pay a minimum 15 percent level of tax on the income arising in each
jurisdiction in which they operate. Numerous countries have already enacted the OECD model rules, which were effective for us in
fiscal 2025. There was no material impact on our consolidated financial statements. Several other countries have enacted or drafted
legislation that is not yet effective for us, and we do not expect this legislation to have a material impact on our consolidated financial
statements. We will continue to monitor for new legislation and guidance and evaluate potential impact on our consolidated financial
statements.
During the second quarter of fiscal 2024, we received a notice of proposed adjustment from the Internal Revenue Service associated
with a capital loss from fiscal 2019. We believe that we have meritorious defenses against this assessment and will vigorously defend
our position. We do not expect the resolution of the proposed adjustment to have a material impact on our financial position or
liquidity.
(15) Business Segment and Geographic Information
We operate in the packaged foods industry. Our operating segments are as follows: North America Retail, International, North
America Pet, and North America Foodservice.
Our North America Retail operating 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. Our product
categories in this business segment include ready-to-eat cereals, 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 including
ready-to-eat cereal, frozen vegetables, meal kits, fruit snacks and snack bars.
Our International operating segment consists of retail and foodservice businesses outside of the United States and Canada. Our product
categories include super-premium ice cream and frozen desserts, meal kits, salty snacks, snack bars, dessert and baking mixes, shelf-
stable vegetables, and pet food products. We also sell super-premium ice cream and frozen desserts directly to consumers through
owned retail shops. Our International segment also includes products manufactured in the United States for export, mainly to
Caribbean and Latin American markets, as well as products we manufacture for sale to our international joint ventures. Revenues from
export activities are reported in the region or country where the end customer is located.
Our North America Pet operating 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. Our product categories include dog and cat food (dry foods, wet foods, fresh foods, and treats) made with whole meats,
fruits, vegetables and other high-quality natural ingredients. Our tailored pet product offerings address specific dietary, lifestyle, and
life-stage needs and span different product types, diet types, breed sizes for dogs, life-stages, flavors, product functions, and textures
and cuts for wet and fresh foods.
19
Our North America Foodservice segment consists of foodservice businesses in the United States and Canada. Our major product
categories in our North America Foodservice operating segment are ready-to-eat cereals, snacks, frozen meals, unbaked and fully
baked frozen dough products, baking mixes, and bakery flour. Many products we sell are branded to the consumer and nearly all are
branded to our customers. We sell to distributors and operators in many customer channels including foodservice, vending, and
supermarket bakeries.
Our chief operating decision maker (CODM) is the Chairman of the Board and Chief Executive Officer. The CODM predominantly
uses segment operating profit in the annual planning process which includes segment operating profit performance targets. The
CODM assesses progress against performance targets by comparing segment operating profit actual-to-plan variances on a monthly
basis. The performance assessment completed by the CODM is used to determine whether resource allocations require adjustment and
contributes to the determination of incentive compensation.
Operating profit for these segments excludes unallocated corporate items, gain or loss on divestitures, and restructuring,
transformation, impairment, and other exit costs. Results from certain businesses managed by our Strategic Growth Office are
included within corporate and other net sales and unallocated corporate items within operating profit. Unallocated corporate items also
include corporate overhead expenses, variances to planned North American employee benefits and incentives, certain charitable
contributions, gains and losses on corporate investments, and other items that are not part of our measurement of segment operating
performance. These include gains and losses arising from the revaluation of certain grain inventories and gains and losses from mark-
to-market valuation of certain commodity positions until passed back to our operating segments. These items affecting operating profit
are centrally managed at the corporate level and are excluded from the measure of segment profitability reviewed by executive
management. Under our supply chain organization, our manufacturing, warehouse, and distribution activities are substantially
integrated across our operations in order to maximize efficiency and productivity. As a result, fixed assets and depreciation and
amortization expenses are neither maintained nor available by operating segment.
20
Quarter Ended August 30, 2026 | |||||||||
In Millions | North America Retail | International | North America Pet | North America Foodservice | Total | ||||
Segment net sales | $ | $ | $ | $ | $ | ||||
Corporate and other net sales | |||||||||
Total net sales | $ | ||||||||
Cost of sales | |||||||||
Selling, general, and administrative expenses | |||||||||
Segment operating profit | $ | $ | $ | $ | $ | ||||
Unallocated corporate items | |||||||||
Restructuring, transformation, impairment, and other exit costs | |||||||||
Operating profit | $ | ||||||||
Quarter Ended August 24, 2025 | |||||||||
In Millions | North America Retail | International | North America Pet | North America Foodservice | Total | ||||
Segment net sales | $ | $ | $ | $ | $ | ||||
Corporate and other net sales | |||||||||
Total net sales | $ | ||||||||
Cost of sales | |||||||||
Selling, general, and administrative expenses | |||||||||
Segment operating profit | $ | $ | $ | $ | $ | ||||
Unallocated corporate items | |||||||||
Divestitures gain | ( | ||||||||
Restructuring, transformation, impairment, and other exit costs | |||||||||
Operating profit | $ | ||||||||
Net sales for our North America Retail operating units were as follows:
Quarter Ended | |||
In Millions | Aug. 30, 2026 | Aug. 24, 2025 | |
U.S. Meals & Baking Solutions | $ | $ | |
U.S. Snacks | |||
Big G Cereal & Canada | |||
Total | $ | $ | |
21
Quarter Ended | |||
In Millions | Aug. 30, 2026 | Aug. 24, 2025 | |
Snacks | $ | $ | |
Cereal | |||
Pet | |||
Convenient meals | |||
Dough | |||
Baking mixes and ingredients | |||
Super-premium ice cream | |||
Yogurt | |||
Other | |||
Total | $ | $ | |
22
Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations.
INTRODUCTION
This Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) should be read in
conjunction with the MD&A included in our Annual Report on Form 10-K for the fiscal year ended May 31, 2026, for important
background regarding, among other things, our key business drivers. Significant trademarks and service marks used in our business
are set forth in italics herein. Certain terms used throughout this report are defined in the “Glossary” section below.
Our key priorities in fiscal 2027 are to strengthen our organic net sales growth, accelerate our enterprise transformation efforts, and
drive disciplined capital allocation and returns. Amid a continued challenging macroeconomic backdrop for consumers, we expect
category growth to be consistent with recent trends and below our long-term growth projections. With our price investments
completed in fiscal 2026, our plans in fiscal 2027 are focused on delivering product innovation and renovation news centered on the
benefits that matter most to today’s consumers, including better-for-you benefits like protein and fiber, bold flavors, fun and
indulgence, and pet humanization, all of which should help support stronger topline growth. We expect to generate at least $750
million in total savings from our ongoing Holistic Margin Management (HMM) productivity program, our global transformation
initiative, and other cost savings actions. These savings are part of our $3 billion cumulative cost savings target through fiscal 2030
and will help offset our forecast for 4 to 5 percent input cost inflation and increased investments in product innovation and renovation
in fiscal 2027. In addition to these factors, we expect decreases of approximately 9 points on operating profit and 11 points on EPS in
fiscal 2027 from lapping the 53rd week in fiscal 2026, normalizing corporate incentive expense, and the impact of fiscal 2026
divestitures.
CONSOLIDATED RESULTS OF OPERATIONS
First Quarter Results
In the first quarter of fiscal 2027, net sales decreased 3 percent, including the impact of the divestiture of our United States yogurt
business (Divestiture) in the first quarter of fiscal 2026. Organic net sales essentially matched the same period last year. Operating
profit decreased 63 percent to $634 million, primarily driven by a gain related to the Divestiture in the first quarter of fiscal 2026,
higher input costs, and a decrease in contributions from volume growth, partially offset by favorable net price realization and mix and
a favorable change in the mark-to-market valuation of certain commodity positions and grain inventories. Operating profit margin of
14.4 percent decreased 2,380 basis points. Adjusted operating profit of $634 million decreased 11 percent on a constant-currency
basis, primarily driven by higher input costs and a decrease in contributions from volume growth, partially offset by favorable net
price realization and mix. Adjusted operating profit margin decreased 130 basis points to 14.4 percent. Diluted earnings per share of
$0.74 decreased 67 percent in the first quarter of fiscal 2027. Adjusted diluted earnings per share of $0.75 decreased 13 percent on a
constant-currency basis compared to the first quarter of fiscal 2026. See the “Non-GAAP Measures” section below for a description of
our use of measures not defined by GAAP.
A summary of our consolidated financial results for the first quarter of fiscal 2027 follows:
Quarter Ended Aug. 30, 2026 | In millions, except per share | Quarter Ended Aug. 30, 2026 vs. Aug. 24, 2025 | Percent of Net Sales | Constant- Currency Growth (a) | |||
Net sales | $4,389.5 | (3) | % | ||||
Operating profit | 633.6 | (63) | % | 14.4% | |||
Net earnings attributable to General Mills | 397.0 | (67) | % | ||||
Diluted earnings per share | $0.74 | (67) | % | ||||
Organic net sales growth rate (a) | Flat | ||||||
Adjusted operating profit (a) | 634.0 | (11) | % | 14.4% | (11)% | ||
Adjusted diluted earnings per share (a) | $0.75 | (13) | % | (13)% | |||
(a)See the “Non-GAAP Measures” section below for our use of measures not defined by GAAP.
23
Consolidated net sales were as follows:
Quarter Ended | |||||
Aug. 30, 2026 | Aug. 30, 2026 vs. Aug. 24, 2025 | Aug. 24, 2025 | |||
Net sales (in millions) | $4,389.5 | (3) | % | $4,517.5 | |
Contributions from volume growth (a) | (4) | pts | |||
Net price realization and mix | 1 | pt | |||
Foreign currency exchange | Flat | ||||
Note: Table may not foot due to rounding.
(a)Measured in tons based on the stated weight of our product shipments.
Net sales in the first quarter of fiscal 2027 decreased 3 percent compared to the same period in fiscal 2026, driven by a decrease in
contributions from volume growth, partially offset by favorable net price realization and mix, both of which include the impact of the
Divestiture.
Components of organic net sales growth are shown in the following table:
Quarter Ended Aug. 30, 2026 vs. | ||
Quarter Ended Aug. 24, 2025 | ||
Contributions from organic volume growth (a) | (1) | pt |
Organic net price realization and mix | Flat | |
Organic net sales growth | Flat | |
Foreign currency exchange | Flat | |
Divestiture | (3) | pts |
Net sales growth | (3) | pts |
Note: Table may not foot due to rounding.
(a)Measured in tons based on the stated weight of our product shipments.
Organic net sales in the first quarter of fiscal 2027 essentially matched the same period in fiscal 2026.
Cost of sales decreased $82 million to $2,902 million in the first quarter of fiscal 2027 compared to the same period in fiscal 2026.
The decrease was primarily driven by a $118 million decrease attributable to lower volume, partially offset by a $73 million increase
attributable to product rate and mix, both of which include the impact of the Divestiture. We recorded a $30 million net decrease in
cost of sales related to the mark-to-market valuation of certain commodity positions and grain inventories in the first quarter of fiscal
2027, compared to an $8 million net increase in the first quarter of fiscal 2026. We also recorded $1 million of integration costs
recorded in the first quarter of fiscal 2027 related to the Whitebridge Pet Brands acquisition in fiscal 2025.
Selling, general, and administrative (SG&A) expenses decreased $13 million to $832 million in the first quarter of fiscal 2027
compared to the same period in fiscal 2026, primarily driven by lower transactions costs. SG&A expenses as a percent of net sales in
the first quarter of fiscal 2027 increased 30 basis points compared to the first quarter of fiscal 2026.
Divestitures gain totaled $1,054 million in the first quarter of fiscal 2026, primarily related to the sale of our United States yogurt
business (please refer to Note 2 to the Consolidated Financial Statements in Part I, Item 1 of this report).
Restructuring, transformation, impairment, and other exit costs totaled $21 million in the first quarter of fiscal 2027, compared to
$16 million in the same period last year. In the first quarter of fiscal 2027, we recorded an additional $24 million non-cash pre-tax
valuation loss related to the planned divestiture of our Brazil business (please refer to Note 3 to the Consolidated Financial Statements
in Part I, Item 1 of this report).
Benefit plan non-service income totaled $11 million in the first quarter of fiscal 2027, compared to $15 million in the same period
last year, primarily driven by lower expected return on plan assets and higher interest costs.
Interest, net for the first quarter of fiscal 2027 totaled $142 million, up $9 million from the first quarter of fiscal 2026, primarily
driven by higher interest rates.
The effective tax rate for the first quarter of fiscal 2027 was 24.5 percent compared to 25.6 percent for the first quarter of fiscal 2026.
The 1.1 percentage point decrease was primarily due to certain unfavorable tax components related to the Divestiture in fiscal 2026
and favorable earnings mix by jurisdiction in fiscal 2027, partially offset by certain nonrecurring discrete tax costs in fiscal 2027. Our
effective tax rate excluding certain items affecting comparability was 23.4 percent in the first quarter of fiscal 2027, compared to 24.1
percent in the same period last year (see the “Non-GAAP Measures” section below for a description of our use of measures not
24
defined by GAAP). The 0.7 percentage point decrease was primarily due to favorable earnings mix by jurisdiction in fiscal 2027,
partially offset by certain nonrecurring discrete tax costs in fiscal 2027.
After-tax earnings from joint ventures for the first quarter of fiscal 2027 increased to $19 million compared to $7 million in the
same period in fiscal 2026, primarily due to our share of asset impairment charges and transaction costs related to certain assets held
for sale at Cereal Partners Worldwide (CPW) in fiscal 2026. On a constant-currency basis, after-tax earnings from joint ventures
increased 178 percent (see the “Non-GAAP Measures” section below for a description of our use of measures not defined by GAAP).
The components of our joint ventures’ net sales growth are shown in the following table:
Quarter Ended Aug. 30, 2026 vs. | ||||||
Quarter Ended Aug. 24, 2025 | CPW | HDJ (a) | Total | |||
Contributions from volume growth (b) | (10) | pts | (7) | pts | ||
Net price realization and mix | 5 | pts | 5 | pts | ||
Net sales growth in constant currency | (4) | pts | (3) | pts | (4) | pts |
Foreign currency exchange | Flat | (9) | pts | (2) | pts | |
Net sales growth | (5) | pts | (11) | pts | (6) | pts |
Note: Table may not foot due to rounding.
(a)Häagen-Dazs Japan, Inc. (HDJ).
(b)Measured in tons based on the stated weight of our product shipments.
Average diluted shares outstanding decreased by 5 million in the first quarter of fiscal 2027 from the same period a year ago
primarily due to share repurchases in fiscal 2026.
SEGMENT OPERATING RESULTS
Our businesses are organized into four operating segments: North America Retail, International, North America Pet, and North
America Foodservice. Please refer to Note 15 of the Consolidated Financial Statements in Part I, Item 1 of this report for a description
of our operating segments.
North America Retail Segment Results
North America Retail net sales were as follows:
Quarter Ended | |||||
Aug. 30, 2026 | Aug. 30, 2026 vs. Aug. 24, 2025 | Aug. 24, 2025 | |||
Net sales (in millions) | $2,451.8 | (7) | % | $2,625.5 | |
Contributions from volume growth (a) | (9) | pts | |||
Net price realization and mix | 2 | pts | |||
Foreign currency exchange | Flat | ||||
Note: Table may not foot due to rounding.
(a)Measured in tons based on the stated weight of our product shipments.
North America Retail net sales decreased 7 percent in the first quarter of fiscal 2027 compared to the same period in fiscal 2026,
driven by a decrease in contributions from volume growth, partially offset by favorable net price realization and mix, both of which
include the impact of the Divestiture.
25
The components of North America Retail organic net sales growth are shown in the following table:
Quarter Ended | ||
Aug. 30, 2026 | ||
Contributions from organic volume growth (a) | (2) | pts |
Organic net price realization and mix | (1) | pt |
Organic net sales growth | (3) | pts |
Foreign currency exchange | Flat | |
Divestiture (b) | (4) | pts |
Net sales growth | (7) | pts |
Note: Table may not foot due to rounding.
(a)Measured in tons based on the stated weight of our product shipments.
(b)Divestiture of the United States yogurt business in the first quarter of fiscal 2026. Please refer to Note 2 to the Consolidated Financial
Statements in Part I, Item 1 of this report.
North America Retail organic net sales decreased 3 percent in the first quarter of fiscal 2027 compared to the same period in fiscal
2026, driven by a decrease in contributions from organic volume growth and unfavorable organic net price realization and mix.
North America Retail net sales percentage change by operating unit are shown in the following table:
Quarter Ended | ||
Aug. 30, 2026 | ||
Big G Cereal & Canada (a) | (14) | % |
U.S. Snacks | (6) | % |
U.S. Meals & Baking Solutions | Flat | |
Total | (7) | % |
(a)The Big G Cereal & Canada operating unit includes the impact of the Divestiture. Please refer to Note 2 to the Consolidated Financial
Statements in Part I, Item 1 of this report.
Segment operating profit decreased 15 percent to $479 million in the first quarter of fiscal 2027, compared to $564 million in the same
period in fiscal 2026, including the impact of the Divestiture, primarily driven by a decrease in contributions from volume growth and
higher input costs, partially offset by favorable net price realization and mix and lower SG&A expenses. Segment operating profit
decreased 15 percent on a constant-currency basis in the first quarter of fiscal 2027, compared to the same period in fiscal 2026 (see
the “Non-GAAP Measures” section below for our use of this measure not defined by GAAP).
International Segment Results
International net sales were as follows:
Quarter Ended | |||||
Aug. 30, 2026 | Aug. 30, 2026 vs. Aug. 24, 2025 | Aug. 24, 2025 | |||
Net sales (in millions) | $794.3 | 4 | % | $760.2 | |
Contributions from volume growth (a) | 6 | pts | |||
Net price realization and mix | (3) | pts | |||
Foreign currency exchange | 1 | pt | |||
Note: Table may not foot due to rounding.
(a)Measured in tons based on the stated weight of our product shipments.
International net sales increased 4 percent in the first quarter of fiscal 2027 compared to the same period in fiscal 2026, driven by an
increase in contributions from volume growth and favorable foreign currency exchange impacts, partially offset by unfavorable net
price realization and mix.
26
The components of International organic net sales growth are shown in the following table:
Quarter Ended | ||
Aug. 30, 2026 | ||
Contributions from organic volume growth (a) | 6 | pts |
Organic net price realization and mix | (3) | pts |
Organic net sales growth | 4 | pts |
Foreign currency exchange | 1 | pt |
Net sales growth | 4 | pts |
Note: Table may not foot due to rounding.
(a)Measured in tons based on the stated weight of our product shipments.
International organic net sales increased 4 percent in the first quarter of fiscal 2027 compared to the same period in fiscal 2026, driven
by an increase in contributions from organic volume growth, partially offset by unfavorable organic net price realization and mix.
Segment operating profit increased 14 percent to $75 million in the first quarter of fiscal 2027, compared to $66 million in the same
period in fiscal 2026, primarily driven by an increase in contributions from volume growth and lower input costs, partially offset by
unfavorable price realization and mix and higher SG&A expenses, including increased media and advertising expenses. Segment
operating profit increased 15 percent on a constant-currency basis in the first quarter of fiscal 2027, compared to the same period in
fiscal 2026 (see the “Non-GAAP Measures” section below for our use of this measure not defined by GAAP).
North America Pet Segment Results
North America Pet net sales were as follows:
Quarter Ended | |||||
Aug. 30, 2026 | Aug. 30, 2026 vs. Aug. 24, 2025 | Aug. 24, 2025 | |||
Net sales (in millions) | $612.8 | Flat | $610.0 | ||
Contributions from volume growth (a) | (6) | pts | |||
Net price realization and mix | 7 | pts | |||
Foreign currency exchange | Flat | ||||
Note: Table may not foot due to rounding.
(a)Measured in tons based on the stated weight of our product shipments.
North America Pet net sales in the first quarter of fiscal 2027 essentially matched the same period in fiscal 2026.
The components of North America Pet organic net sales growth are shown in the following table:
Quarter Ended | ||
Aug. 30, 2026 | ||
Contributions from organic volume growth (a) | (6) | pts |
Organic net price realization and mix | 7 | pts |
Organic net sales growth | Flat | |
Foreign currency exchange | Flat | |
Net sales growth | Flat | |
Note: Table may not foot due to rounding.
(a)Measured in tons based on the stated weight of our product shipments.
North America Pet organic net sales in the first quarter of fiscal 2027 essentially matched the same period in fiscal 2026.
Segment operating profit decreased 12 percent to $100 million in the first quarter of fiscal 2027, compared to $113 million in the same
period in fiscal 2026, primarily driven by higher input costs, a decrease in contributions from volume growth, and higher SG&A
expenses, partially offset by favorable price realization and mix. Segment operating profit decreased 12 percent on a constant-currency
basis in the first quarter of fiscal 2027, compared to the same period in fiscal 2026 (see the “Non-GAAP Measures” section below for
our use of this measure not defined by GAAP).
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North America Foodservice Segment Results
North America Foodservice net sales were as follows:
Quarter Ended | |||||
Aug. 30, 2026 | Aug. 30, 2026 vs. Aug. 24, 2025 | Aug. 24, 2025 | |||
Net sales (in millions) | $523.1 | 1 | % | $516.7 | |
Contributions from volume growth (a) | (3) | pts | |||
Net price realization and mix | 4 | pts | |||
Foreign currency exchange | Flat | ||||
Note: Table may not foot due to rounding.
(a)Measured in tons based on the stated weight of our product shipments.
North America Foodservice net sales increased 1 percent in the first quarter of fiscal 2027 compared to the same period in fiscal 2026,
driven by favorable net price realization and mix, partially offset by a decrease in contributions from volume growth, both of which
include the impact of the Divestiture.
The components of North America Foodservice organic net sales growth are shown in the following table:
Quarter Ended | ||
Aug. 30, 2026 | ||
Contributions from organic volume growth (a) | (1) | pt |
Organic net price realization and mix | 5 | pts |
Organic net sales growth | 4 | pts |
Foreign currency exchange | Flat | |
Divestiture (b) | (2) | pts |
Net sales growth | 1 | pt |
Note: Table may not foot due to rounding.
(a)Measured in tons based on the stated weight of our product shipments.
(b)Divestiture of the United States yogurt business in the first quarter of fiscal 2026. Please refer to Note 2 to the Consolidated Financial
Statements in Part I, Item 1 of this report.
North America Foodservice organic net sales increased 4 percent in the first quarter of fiscal 2027 compared to the same period in
fiscal 2026, driven by favorable organic net price realization and mix, partially offset by a decrease in contributions from organic
volume growth.
Segment operating profit increased 12 percent to $79 million in the first quarter of fiscal 2027 compared to $71 million in the same
period in fiscal 2026, primarily driven by favorable net price realization and mix, partially offset by higher input costs. Segment
operating profit increased 12 percent on a constant-currency basis in the first quarter of fiscal 2027, compared to the same period in
fiscal 2026 (see the “Non-GAAP Measures” section below for our use of this measure not defined by GAAP).
UNALLOCATED CORPORATE ITEMS
Unallocated corporate expenses totaled $78 million in the first quarter of fiscal 2027, compared to $126 million in the same period in
fiscal 2026. In the first quarter of fiscal 2027, we recorded a $30 million net decrease in expense related to the mark-to-market
valuation of certain commodity positions and grain inventories, compared to an $8 million net increase in expense in the same period
last year. Additionally, in the first quarter of fiscal 2027, we recorded $4 million of transaction costs primarily related to the definitive
agreement to sell our Brazil business, compared to $12 million of transaction costs related to the Divestiture in the same period last
year. We recorded $2 million of integration costs in the first quarter of fiscal 2027 compared to $1 million of integration costs during
the same period last year, both of which related to the Whitebridge Pet Brands acquisition in fiscal 2025. We also recorded $2 million
of restructuring charges in cost of sales in the first quarter of fiscal 2027, which essentially matched the same period last year.
LIQUIDITY AND CAPITAL RESOURCES
During the first quarter of fiscal 2027, cash provided by operations was $298 million compared to $397 million in the same period last
year. The $99 million decrease was primarily driven by a $310 million change in current assets and liabilities largely driven by lower
accrued federal income taxes payable, which included tax expense of $277 million associated with the Divestiture in fiscal 2026. This
was partially offset by a $248 million increase in net earnings, excluding the pretax gain on the Divestiture in fiscal 2026.
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Cash used by investing activities during the first quarter of fiscal 2027 was $116 million compared to $1,695 million provided by
investing activities for the same period in fiscal 2026. In the first quarter of fiscal 2026, we completed the sale of our United States
yogurt business for $1,798 million cash. We also received an additional $6 million of cash related to a sale price adjustment related to
the sale of our Canada yogurt business in the first quarter of fiscal 2026. In addition, during the first quarter of fiscal 2027, we spent
$90 million on purchases of land, buildings, and equipment, compared to $110 million in the same period last year.
Cash used by financing activities during the first quarter of fiscal 2027 was $210 million compared to $1,507 million in the same
period in fiscal 2026. We had $133 million of net debt issuances in the first quarter of fiscal 2027 compared to $655 million of net
debt payments in the same period a year ago. In addition, we purchased $500 million of common stock for treasury in the first quarter
of fiscal 2026. We paid $330 million of dividends in the first quarter of fiscal 2027, essentially matching the same period last year.
As of August 30, 2026, we had $406 million of cash and cash equivalents in foreign jurisdictions. In anticipation of repatriating funds
from foreign jurisdictions, we record local country withholding taxes on our international earnings, as applicable. We may repatriate
our cash and cash equivalents held by our foreign subsidiaries without such funds being subject to further U.S. income tax
liability. Earnings prior to fiscal 2018 from our foreign subsidiaries remain permanently reinvested in those jurisdictions.
The following table details the credit facilities and lines of credit we had available as of August 30, 2026:
In Millions | Borrowing Capacity | Borrowed Amount | |
Committed credit facility expiring October 2029 | $2,700.0 | $— | |
Uncommitted credit facilities and lines of credit | 776.4 | 11.6 | |
Total | $3,476.4 | $11.6 |
To ensure availability of funds, we maintain bank credit lines and have commercial paper programs available to us in the United States
and Europe.
Certain of our long-term debt agreements and our credit facilities contain restrictive covenants. We are in compliance with all of these
covenants.
We have $1,047 million of long-term debt maturing in the next 12 months that is classified as current, including €500 million of
floating-rate senior notes due October 22, 2026 and €400 million of 1.5 percent fixed-rate senior notes due April 22, 2027. We believe
that cash flows from operations, together with available short- and long-term debt financing, will be adequate to meet our liquidity and
capital needs for at least the next 12 months.
CRITICAL ACCOUNTING ESTIMATES
Our significant accounting policies are described in Note 2 to the Consolidated Financial Statements included in our Annual Report on
Form 10-K for the fiscal year ended May 31, 2026. The accounting policies used in preparing our interim fiscal 2027 Consolidated
Financial Statements are the same as those described in our Form 10-K. Please refer to Note 1 to the Consolidated Financial
Statements in Part I, Item 1 of this report for additional information.
Our critical accounting estimates are those that have meaningful impact on the reporting of our financial condition and results of
operations. These estimates include our accounting for revenue recognition, valuation of long-lived assets, intangible assets, income
taxes, and defined benefit pension, other postretirement benefit, and postemployment benefit plans. The assumptions and
methodologies used in the determination of those estimates as of August 30, 2026, are the same as those described in our Annual
Report on Form 10-K for the fiscal year ended May 31, 2026.
Our annual goodwill and indefinite-lived intangible assets impairment test was performed on the first day of the second quarter of
fiscal 2026. As a result of lower future sales and profitability projections for the business supporting our Uncle Toby’s brand
intangible asset, we determined that the fair value of the brand intangible asset no longer exceeded its carrying value and recorded a
$53 million non-cash impairment charge.
In addition, we identified a triggering event due to a sustained decline in market capitalization and stock price in the fourth quarter of
fiscal 2026 reflecting heightened macroeconomic uncertainty and lower market multiples in our industry, which caused a related
increase in our discount rates and required an interim impairment assessment. We performed the interim impairment assessment of our
goodwill and other intangible assets as of May 31, 2026, and determined that the fair values of our North America Pet reporting unit
and our Nudges and True Chews brand intangible assets no longer exceeded the carrying values of the respective assets, primarily
driven by an increase in the discount rates. As a result, in the fourth quarter of fiscal 2026 we recorded $1,750 million of non-cash
impairment charges, of which $1,500 million related to the North America Pet reporting unit goodwill and $250 million related to the
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brand intangible assets, all of which are included within our North America Pet segment. The $1,500 million goodwill impairment
charge is not deductible for tax purposes.
We recorded these impairment charges in restructuring, transformation, impairment, and other exit costs in our Consolidated
Statements of (Loss) Earnings in the fourth quarter of fiscal 2026. Our estimates of the fair values were determined based on a
discounted cash flow model using inputs which included our long-range cash flow projections for the businesses, royalty rates,
discount rates, and tax rates. These fair values are Level 3 assets in the fair value hierarchy.
In addition, while having significant coverage as of our May 31, 2026, assessment date, the Blue Buffalo brand intangible asset had
risk of decreasing coverage due to the increase in our discount rates. The Progresso brand intangible asset also had risk of decreasing
coverage. We will continue to monitor applicable businesses for potential impairment. All other reporting unit and intangible asset fair
values were substantially in excess of the carrying values.
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
In September 2025, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2025-06,
amending the accounting for costs related to internal-use software. The ASU removes reference to software development project
stages. Additionally, the ASU requires capitalization of software costs to begin when management has authorized and committed to
funding the software and it is probable that the project will be completed and the software will be used to perform the function
intended. The requirements of the new standard are effective for annual periods beginning after December 15, 2027, and interim
periods within those annual periods, which for us is the first quarter of fiscal 2029. Early adoption is permitted and the amendments
may be applied on a prospective, retrospective, or modified basis. We are in the process of analyzing the impact on our results of
operations and financial position.
In November 2024, the FASB issued ASU 2024-03 requiring additional income statement disclosures. The ASU requires the
disaggregation of specific categories of expenses underlying the line items presented on the income statement. Additionally, the ASU
requires enhanced disclosure of selling expenses. The requirements of the ASU are effective for annual periods beginning after
December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. For us, annual reporting requirements
will be effective for fiscal 2028 and interim reporting requirements will be effective beginning with our first quarter of fiscal 2029.
Early adoption is permitted and the amendments should be applied on a prospective basis. Retrospective application is permitted. We
are in the process of analyzing the impact of the ASU on our related disclosures.
NON-GAAP MEASURES
We have included in this report measures of financial performance that are not defined by GAAP. We believe that these measures
provide useful information to investors, and include these measures in other communications to investors.
For each of these non-GAAP financial measures, we are providing below a reconciliation of the differences between the non-GAAP
measure and the most directly comparable GAAP measure, an explanation of why we believe the non-GAAP measure provides useful
information to investors, and any additional material purposes for which our management or Board of Directors uses the non-GAAP
measure. These non-GAAP measures should be viewed in addition to, and not in lieu of, the comparable GAAP measure.
Significant Items Impacting Comparability
Several measures below are presented on an adjusted basis. The adjustments are either items resulting from infrequently occurring
events or items that, in management’s judgment, significantly affect the year-to-year assessment of operating results.
The following are descriptions of significant items impacting comparability of our results.
Mark-to-market effects
Net mark-to-market valuation of certain commodity positions recognized in unallocated corporate items. Please refer to Note 6 to the
Consolidated Financial Statements in Part I, Item 1 of this report.
Valuation loss on held for sale business
Non-cash valuation loss related to the planned divestiture of our Brazil business recorded in fiscal 2027. Please refer to Note 2 to the
Consolidated Financial Statements in Part I, Item 1 of this report.
Transaction costs
Fiscal 2027 transaction costs primarily related to the definitive agreement to sell our Brazil business. Fiscal 2026 transaction costs
related to the sale of our United States yogurt business. Please refer to Note 2 to the Consolidated Financial Statements in Part I, Item
1 of this report.
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Acquisition integration costs
Integration costs related to the Whitebridge Pet Brands acquisition in fiscal 2025 recorded in fiscal 2027 and fiscal 2026, and the
acquisition of a pet food business in Europe in fiscal 2024 recorded in fiscal 2026.
Restructuring and transformation charges
Restructuring and transformation charges related to previously announced actions recorded in fiscal 2027 and fiscal 2026. Please refer
to Note 3 to the Consolidated Financial Statements in Part I, Item 1 of this report.
Divestitures gain
Divestitures gain recorded in fiscal 2026 related to the sale of our United States yogurt business in fiscal 2026 and Canada yogurt
business in fiscal 2025. Please refer to Note 2 to the Consolidated Financial Statements in Part I, Item 1 of this report.
CPW asset impairments and transaction costs
CPW asset impairment charges and transaction costs related to certain assets held for sale recorded in fiscal 2026.
Investment activity, net
Valuation adjustments of certain corporate investments in fiscal 2026.
Organic Net Sales Growth Rates
We provide organic net sales growth rates for our consolidated net sales and segment net sales. This measure is used in reporting to
our Board of Directors and executive management and as a component of the measurement of our performance for incentive
compensation purposes. We believe that organic net sales growth rates provide useful information to investors because they provide
transparency to underlying performance in our net sales by excluding the effect that foreign currency exchange rate fluctuations,
acquisitions, divestitures, and a 53rd week, when applicable, have on year-to-year comparability. A reconciliation of these measures to
reported net sales growth rates, the relevant GAAP measures, are included in our Consolidated Results of Operations and Results of
Segment Operations discussions in the MD&A above.
Adjusted Operating Profit as a Percent of Net Sales (Adjusted Operating Profit Margin)
We believe this measure provides useful information to investors because it is important for assessing our operating profit margin on a
comparable basis.
Our adjusted operating profit margins are calculated as follows:
Quarter Ended | |||||||
Aug. 30, 2026 | Aug. 24, 2025 | ||||||
In Millions | Value | Percent of Net Sales | Value | Percent of Net Sales | |||
Operating profit as reported | $633.6 | 14.4% | $1,725.8 | 38.2% | |||
Mark-to-market effects | (29.5) | (0.7)% | 8.5 | 0.2% | |||
Valuation loss on held for sale business | 23.7 | 0.5% | — | —% | |||
Transaction costs | 4.3 | 0.1% | 11.8 | 0.3% | |||
Acquisition integration costs | 1.7 | —% | 1.4 | —% | |||
Restructuring and transformation charges | 0.2 | —% | 18.3 | 0.4% | |||
Divestitures gain | — | —% | (1,054.4) | (23.3)% | |||
Investment activity, net | — | —% | (0.2) | —% | |||
Adjusted operating profit | $634.0 | 14.4% | $711.2 | 15.7% | |||
Note: Table may not foot due to rounding.
For more information on the reconciling items, see the Significant Items Impacting Comparability section above.
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Adjusted Operating Profit and Related Constant-currency Growth Rate
This measure is used in reporting to our Board of Directors and executive management and as a component of the measurement of our
performance for incentive compensation purposes. We believe that this measure provides useful information to investors because it is
the operating profit measure we use to evaluate operating profit performance on a comparable year-to-year basis. Additionally, the
measure is evaluated on a constant-currency basis by excluding the effect that foreign currency exchange rate fluctuations have on
year-to-year comparability given the volatility in foreign currency exchange rates.
Our adjusted operating profit growth on a constant-currency basis is calculated as follows:
Quarter Ended | |||||
In Millions | Aug. 30, 2026 | Aug. 24, 2025 | Change | ||
Operating profit as reported | $633.6 | $1,725.8 | (63)% | ||
Mark-to-market effects | (29.5) | 8.5 | |||
Valuation loss on held for sale business | 23.7 | — | |||
Transaction costs | 4.3 | 11.8 | |||
Acquisition integration costs | 1.7 | 1.4 | |||
Restructuring and transformation charges | 0.2 | 18.3 | |||
Divestitures gain | — | (1,054.4) | |||
Investment activity, net | — | (0.2) | |||
Adjusted operating profit | $634.0 | $711.2 | (11)% | ||
Foreign currency exchange impact | Flat | ||||
Adjusted operating profit growth, on a constant-currency basis | (11)% | ||||
Note: Table may not foot due to rounding.
For more information on the reconciling items, see the Significant Items Impacting Comparability section above.
Adjusted Diluted EPS and Related Constant-currency Growth Rate
This measure is used in reporting to our Board of Directors and executive management. We believe that this measure provides useful
information to investors because it is the profitability measure we use to evaluate earnings performance on a comparable year-to-year
basis.
The reconciliation of our GAAP measure, diluted EPS, to adjusted diluted EPS and the related constant-currency growth rates follows:
Quarter Ended | |||||
Per Share Data | Aug. 30, 2026 | Aug. 24, 2025 | Change | ||
Diluted earnings per share, as reported | $0.74 | $2.22 | (67)% | ||
Valuation loss on held for sale business | 0.04 | — | |||
Mark-to-market effects | (0.04) | 0.01 | |||
Transaction costs | 0.01 | 0.02 | |||
Restructuring and transformation charges | — | 0.03 | |||
Divestitures gain | — | (1.43) | |||
CPW asset impairments and transaction costs | — | 0.02 | |||
Adjusted diluted earnings per share | $0.75 | $0.86 | (13)% | ||
Foreign currency exchange impact | Flat | ||||
Adjusted diluted earnings per share growth, on a constant-currency basis | (13)% | ||||
Note: Table may not foot due to rounding.
For more information on the reconciling items, see the Significant Items Impacting Comparability section above.
See our reconciliation below of the effective income tax rate as reported to the adjusted effective income tax rate for the tax impact of
each item affecting comparability.
Constant-currency After-tax Earnings from Joint Ventures Growth Rates
We believe that this measure provides useful information to investors because it provides transparency to underlying performance of
our joint ventures by excluding the effect that foreign currency exchange rate fluctuations have on year-to-year comparability given
volatility in foreign currency exchange markets.
32
After-tax earnings from joint ventures growth rates on a constant-currency basis are calculated as follows:
Percentage Change in After-Tax Earnings from Joint Ventures as Reported | Impact of Foreign Currency Exchange | Percentage Change in After-Tax Earnings from Joint Ventures on Constant-Currency Basis | |||
Quarter Ended Aug. 30, 2026 | 178% | Flat | 178% |
Note: Table may not foot due to rounding.
Constant-currency Segment Operating Profit Growth Rates
We believe that this measure provides useful information to investors because it provides transparency to underlying performance of
our segments by excluding the effect that foreign currency exchange rate fluctuations have on year-to-year comparability given
volatility in foreign currency exchange markets.
Our segments’ operating profit growth rates on a constant-currency basis are calculated as follows:
Quarter Ended Aug. 30, 2026 | |||||
Percentage Change in Operating Profit as Reported | Impact of Foreign Currency Exchange | Percentage Change in Operating Profit on Constant-Currency Basis | |||
North America Retail | (15)% | Flat | (15)% | ||
International | 14% | (1) pt | 15% | ||
North America Pet | (12)% | Flat | (12)% | ||
North America Foodservice | 12% | Flat | 12% | ||
Note: Table may not foot due to rounding.
Adjusted Effective Income Tax Rates
We believe this measure provides useful information to investors because it presents the adjusted effective income tax rate on a
comparable year-to-year basis.
Adjusted effective income tax rates are calculated as follows:
Quarter Ended | |||||||
Aug. 30, 2026 | Aug. 24, 2025 | ||||||
In Millions (Except Per Share Data) | Pretax Earnings (a) | Income Taxes | Pretax Earnings (a) | Income Taxes | |||
As reported | $502.0 | $122.8 | $1,608.1 | $410.9 | |||
Mark-to-market effects | (29.5) | (6.8) | 8.5 | 2.0 | |||
Valuation loss on held for sale business | 23.7 | — | — | — | |||
Transaction costs | 4.3 | 1.0 | 11.8 | 2.7 | |||
Acquisition integration costs | 1.7 | 0.4 | 1.4 | 0.3 | |||
Restructuring and transformation charges | 0.2 | — | 18.3 | 4.3 | |||
Divestitures gain | — | — | (1,054.4) | (276.9) | |||
Investment activity, net | — | — | (0.2) | (0.1) | |||
As adjusted | $502.4 | $117.5 | $593.5 | $143.2 | |||
Effective tax rate: | |||||||
As reported | 24.5% | 25.6% | |||||
As adjusted | 23.4% | 24.1% | |||||
Sum of adjustments to income taxes | $(5.4) | $(267.7) | |||||
Average number of common shares - diluted EPS | 537.9 | 542.5 | |||||
Impact of income tax adjustments on adjusted diluted EPS | $0.01 | $0.49 | |||||
Note: Table may not foot due to rounding.
(a) Earnings before income taxes and after-tax earnings from joint ventures.
For more information on the reconciling items, please see the Significant Items Impacting Comparability section above.
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Glossary
AOCI. Accumulated other comprehensive income (loss).
Adjusted diluted EPS. Diluted EPS adjusted for certain items affecting year-to-year comparability.
Adjusted operating profit. Operating profit adjusted for certain items affecting year-to-year comparability.
Adjusted operating profit margin. Operating profit adjusted for certain items affecting year-over-year comparability, divided by net
sales.
Constant currency. Financial results translated to United States dollars using constant foreign currency exchange rates based on the
rates in effect for the comparable prior-year period. To present this information, current period results for entities reporting in
currencies other than United States dollars are translated into United States dollars at the average exchange rates in effect during the
corresponding period of the prior fiscal year, rather than the actual average exchange rates in effect during the current fiscal year.
Therefore, the foreign currency impact is equal to current year results in local currencies multiplied by the change in the average
foreign currency exchange rate between the current fiscal period and the corresponding period of the prior fiscal year.
Derivatives. Financial instruments such as futures, swaps, options, and forward contracts that we use to manage our risk arising from
changes in commodity prices, interest rates, foreign exchange rates, and stock prices.
Fair value hierarchy. For purposes of fair value measurement, we categorize assets and liabilities into one of three levels based on
the assumptions (inputs) used in valuing the asset or liability. Level 1 provides the most reliable measure of fair value, while Level 3
generally requires significant management judgment. The three levels are defined as follows:
Level 1:Unadjusted quoted prices in active markets for identical assets or liabilities.
Level 2: Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets or liabilities in
active markets or quoted prices for identical assets or liabilities in inactive markets.
Level 3:Unobservable inputs reflecting management’s assumptions about the inputs used in pricing the asset or liability.
Free cash flow. Net cash provided by operating activities less purchases of land, buildings, and equipment.
Generally Accepted Accounting Principles (GAAP). Guidelines, procedures, and practices that we are required to use in recording
and reporting accounting information in our financial statements.
Goodwill. The difference between the purchase price of acquired companies plus the fair value of any noncontrolling interests and the
related fair values of net assets acquired.
Gross margin. Net sales less cost of sales.
Hedge accounting. Accounting for qualifying hedges that allows changes in a hedging instrument’s fair value to offset corresponding
changes in the hedged item in the same reporting period. Hedge accounting is permitted for certain hedging instruments and hedged
items only if the hedging relationship is highly effective, and only prospectively from the date a hedging relationship is formally
documented.
Holistic Margin Management (HMM). Company-wide initiative to use productivity savings, mix management, and price realization
to offset input cost inflation, protect margins, and generate funds to reinvest in sales-generating activities.
Mark-to-market. The act of determining a value for financial instruments, commodity contracts, and related assets or liabilities based
on the current market price for that item.
Net mark-to-market valuation of certain commodity positions. Realized and unrealized gains and losses on derivative contracts
that will be allocated to segment operating profit when the exposure we are hedging affects earnings.
Net price realization. The impact of list and promoted price changes, net of trade and other price promotion costs.
Noncontrolling interests. Interests of subsidiaries held by third parties.
Notional amount. The amount of a position or an agreed upon amount in a derivative contract on which the value of financial
instruments are calculated.
OCI. Other Comprehensive Income (Loss).
34
Organic net sales growth. Net sales growth adjusted for foreign currency translation, acquisitions, divestitures and a 53rd fiscal week,
when applicable.
Reporting unit. An operating segment or a business one level below an operating segment.
SOFR. Secured Overnight Financing Rate.
Strategic Revenue Management (SRM). A company-wide capability focused on generating sustainable benefits from net price
realization and mix by identifying and executing against specific opportunities to apply tools including pricing, sizing, mix
management, and promotion optimization across each of our businesses.
Supply chain input costs. Costs incurred to produce and deliver product, including costs for ingredients and conversion, inventory
management, logistics, and warehousing.
Translation adjustments. The impact of the conversion of our foreign affiliates’ financial statements to United States dollars for the
purpose of consolidating our financial statements.
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CAUTIONARY STATEMENT RELEVANT TO FORWARD-LOOKING INFORMATION FOR THE PURPOSE OF “SAFE
HARBOR” PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
This report contains or incorporates by reference forward-looking statements within the meaning of the Private Securities Litigation
Reform Act of 1995 that are based on our current expectations and assumptions. We also may make written or oral forward-looking
statements, including statements contained in our filings with the Securities and Exchange Commission and in our reports to
stockholders.
The words or phrases “will likely result,” “are expected to,” “may continue,” “is anticipated,” “estimate,” “plan,” “project,” or similar
expressions identify “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such
statements are subject to certain risks and uncertainties that could cause actual results to differ materially from historical results and
those currently anticipated or projected. We caution you not to place undue reliance on any such forward-looking statements.
In connection with the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, we are identifying important
factors that could affect our financial performance and could cause our actual results in future periods to differ materially from any
current opinions or statements.
Our future results could be affected by a variety of factors, such as: imposed and threatened tariffs by the United States and its trading
partners; disruptions or inefficiencies in the supply chain; competitive dynamics in the consumer foods industry and the markets for
our products, including new product introductions, advertising activities, pricing actions, and promotional activities of our
competitors; economic conditions, including changes in inflation rates, interest rates, tax rates, tariffs, or the availability of capital;
product development and innovation; consumer acceptance of new products and product improvements; consumer reaction to pricing
actions and changes in promotion levels; acquisitions or dispositions of businesses or assets; changes in capital structure; changes in
the legal and regulatory environment, including tax legislation, labeling and advertising regulations, and litigation; impairments in the
carrying value of goodwill, other intangible assets, or other long-lived assets, or changes in the useful lives of other intangible assets;
changes in accounting standards and the impact of critical accounting estimates; product quality and safety issues, including recalls
and product liability; changes in consumer demand for our products; effectiveness of advertising, marketing, and promotional
programs; changes in consumer behavior, trends, and preferences, including weight loss trends; consumer perception of health-related
issues, including obesity; consolidation in the retail environment; changes in purchasing and inventory levels of significant customers;
fluctuations in the cost and availability of supply chain resources, including raw materials, packaging, energy, and transportation;
effectiveness of restructuring, transformation, and cost saving initiatives; volatility in the market value of derivatives used to manage
price risk for certain commodities; benefit plan expenses due to changes in plan asset values and discount rates used to determine plan
liabilities; failure or breach of our information technology systems; foreign economic conditions, including currency rate fluctuations
and tariffs; and political unrest in foreign markets and economic uncertainty due to terrorism or war.
You should also consider the risk factors that we identify in Item 1A of Part I of our Annual Report on Form 10-K for the fiscal year
ended May 31, 2026, which could also affect our future results.
We undertake no obligation to publicly revise any forward-looking statements to reflect events or circumstances after the date of those
statements or to reflect the occurrence of anticipated or unanticipated events.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
The estimated maximum potential value-at-risk arising from a one-day loss in fair value for our interest rate, foreign exchange,
commodity, and equity market-risk-sensitive instruments outstanding as of August 30, 2026, was as follows:
In Millions | One-day Risk of Loss | Change During Three- Month Period Ended Aug. 30, 2026 | Analysis of Change | ||
Interest rate instruments | $33 | $(4) | Decrease in interest rate volatility | ||
Foreign currency instruments | 39 | (7) | Decrease in rate volatility | ||
Commodity instruments | 5 | 1 | Immaterial | ||
Equity instruments | 3 | 1 | Immaterial |
For additional information, see Item 7A of Part II of our Annual Report on Form 10-K for the fiscal year ended May 31, 2026.
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Item 4. Controls and Procedures.
We, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial
Officer, have evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule
13a-15(e) under the Securities Exchange Act of 1934). Based on our evaluation, our Chief Executive Officer and Chief Financial
Officer have concluded that, as of August 30, 2026, our disclosure controls and procedures were effective to ensure that information
required to be disclosed by us in reports that we file or submit under the Securities Exchange Act of 1934 is (1) recorded, processed,
summarized, and reported within the time periods specified in Securities and Exchange Commission rules and forms, and (2)
accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, in a manner
that allows timely decisions regarding required disclosure.
There were no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act
of 1934) during the quarter ended August 30, 2026, that materially affected, or are reasonably likely to materially affect, our internal
control over financial reporting.
PART II. OTHER INFORMATION
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
The following table sets forth information with respect to shares of our common stock that we purchased during the quarter ended
August 30, 2026:
Period | Total Number of Shares Purchased (a) | Average Price Paid Per Share (b) | Total Number of Shares Purchased as Part of a Publicly Announced Program (c) | Maximum Number of Shares that may yet be Purchased Under the Program (c) | |||
June 1, 2026 - July 05, 2026 | — | $— | — | 26,897,169 | |||
July 06, 2026 - August 02, 2026 | — | — | — | 26,897,169 | |||
August 03, 2026 - August 30, 2026 | — | — | — | 26,897,169 | |||
Total | — | $— | — | 26,897,169 |
(a)The total number of shares purchased includes shares of common stock withheld for the payment of withholding taxes upon the distribution of
deferred option units.
(b)Excludes commissions paid and other costs of execution, including excise taxes.
(c)On June 27, 2022, our Board of Directors approved an authorization for the repurchase of up to 100,000,000 shares of our common stock and
terminated the prior authorization. Purchases can be made in the open market or in privately negotiated transactions, including the use of call
options and other derivative instruments, Rule 10b5-1 trading plans, and accelerated repurchase programs. The Board did not specify an
expiration date for the authorization.
Item 5. Other Information.
During the fiscal quarter ended August 30, 2026, no director or officer of the Company adopted terminated
arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.
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PART II. OTHER INFORMATION
Item 6. | Exhibits. |
10.1 | Forms of Special Stock Unit Award Agreements |
31.1 | Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
31.2 | Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
32.1 | Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
32.2 | Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
101 | Financial Statements from the Quarterly Report on Form 10-Q of the Company for the quarter ended August 30, 2026, formatted in Inline Extensible Business Reporting Language: (i) Consolidated Statements of Earnings; (ii) Consolidated Statements of Comprehensive Income, (iii) Consolidated Balance Sheets; (iv) Consolidated Statements of Total Equity; (v) Consolidated Statements of Cash Flows; and (vi) Notes to Consolidated Financial Statements. |
104 | Cover Page, formatted in Inline Extensible Business Reporting Language and contained in Exhibit 101. |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
GENERAL MILLS, INC. | |
(Registrant) | |
Date: September 23, 2026 | /s/ Mark A. Pallot |
Mark A. Pallot | |
Vice President, Chief Accounting Officer | |
(Principal Accounting Officer and Duly Authorized Officer) |