General Mills (GIS) Q1 2027 (Q&A) earnings summary

Executive summary

• Net sales for Q1 2027 declined 3% to $4.39 billion, primarily due to the U.S. yogurt divestiture, with organic net sales flat year-over-year and improved retail momentum in several categories.

• Operating profit dropped 63% to $634 million, mainly due to a prior-year divestiture gain, higher input costs, and lower volume; adjusted operating profit fell 11% in constant currency.

• Diluted EPS decreased 67% to $0.74; adjusted diluted EPS was $0.75, down 13% in constant currency.

• Cost savings initiatives are on track, with $750 million targeted for fiscal 2027 as part of a $3 billion cumulative savings goal through 2030.

• Full-year fiscal 2027 outlook reaffirmed despite ongoing market volatility and headwinds from divestitures and cost pressures.

Financial highlights

• Q1 net sales were $4.39 billion, down 3% year-over-year; organic net sales were flat.

• Adjusted operating profit was $634 million, down 11% year-over-year in constant currency; adjusted diluted EPS was $0.75, down 13%.

• Adjusted gross margin declined to 33.3% from 34.2% last year, driven by higher input costs.

• Operating cash flow was $298 million, down from $397 million in the prior year.

• No share repurchases in Q1 2027 versus $500 million in the prior year.

Outlook and guidance

• Organic net sales for fiscal 2027 expected to range from down 1.5% to up 0.5%.

• Adjusted operating profit projected to decline 13% to 8% in constant currency; adjusted diluted EPS guidance set at $3.00 to $3.20.

• Free cash flow conversion targeted at approximately 95% of adjusted after-tax earnings.

• Outlook includes headwinds from lapping a 53rd week, normalization of incentive compensation, and divested yogurt earnings.

• Cost savings and transformation remain key priorities amid ongoing cost and market headwinds.