Strategy Focuses on Restoring Volume-Driven Growth
General Mills said its profits were lower in the second quarter of fiscal year 2026, but it stuck to its plan to boost organic sales growth. The company’s “value reset,” according to executives, is meant to improve ties with customers by making things more affordable and innovative.
Chairman and CEO Jeffrey Harmening said that even while earnings are temporarily under pressure, the company’s key strategic goal is still to bring “remarkability” back to its core brands.
Investments in Pricing, Brands, and Consumer Value
The corporation made price changes to two-thirds of its North American retail portfolio to make customers think they were getting more value. This readjustment helps with investments in marketing and new ideas.
General Mills also got into fresh pet food with Love Made Fresh. This added variety to their portfolio while keeping its market position in major food sectors.
Financial Performance Highlights for the Second Quarter
For the quarter that ended on November 23, net income dropped 48% to $413 million. This was mostly because of restructuring expenditures and increased taxes. Adjusted profits per share fell 25% to $1.10, yet this was more than what the market expected.
Operating income fell by 32% to $728 million because gross profit and costs related to transformation and divestitures went down.
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Organic Volume Growth Returns After Four Years
Net sales were $4.86 billion, down 7% from the previous year. Organic sales, on the other hand, were only down 1%. North America Retail’s first volume rise in more than four years is very important.
This improvement shows that pricing changes and marketing efforts are working with customers, which helps keep demand steady for important product lines.
Shifting Consumer Behavior and Promotional Spending
Harmening said that buyers with lower and intermediate incomes are relying more and more on sales to deal with rising prices. Overall, the level of advertising stayed the same, but value-driven buying went up.
He noted that this change in behavior shows how important it is to offer value that is easy to understand and useful without giving up on quality or investing in new ideas for the brand.
Segment Performance Across Core Business Units
Sales in North America declined 13%, whereas sales in other countries gained 6%, and sales of pets in North America rose 11%. Foodservice earnings fell by 8% as the market returned to normal.
Operating profit went up 19% over the world, but it went down 12% in foodservice and pet units because of inflation and costs of making changes.
Outlook and Efficiency Initiatives for Fiscal 2026
General Mills stuck to its full-year forecast, saying it expects organic sales to be between -1% and +1%. It also hopes to save up to 5% through its Holistic Margin Management efficiency initiative.
Executives think that profits will expand faster in the fourth quarter because of the extra fiscal week, better timing for trade, and ongoing growth in organic volume trends.
