General Mills shares tumble on earnings miss, guidance cut
Consumer packaged goods company slashes FY2026 outlook as volume weakness and GLP-1 drugs weigh on demand
General Mills shares fell sharply on Wednesday after the packaged food company reported a disappointing fiscal third quarter and slashed its full-year outlook, signaling that a turnaround effort remains far from complete.
The Minneapolis-based maker of Cheerios, Betty Crocker and Haagen-Dazs ice cream reported adjusted earnings per share of 64 cents for the quarter ended February 2026, missing the 73-cent analyst consensus by 12.3%. Revenue declined 8% year-over-year to $4.4 billion, narrowly falling short of the $4.41 billion forecast, according to earnings data compiled by Investing.com.
The company, which has already cut its full-year 2026 guidance once in February, now expects adjusted EPS to fall 16-20% on a constant-currency basis for the year, a steeper decline than the 10-15% range it previously projected. Organic net sales are expected to decline 1.5% to 2.0%, a downgrade from earlier expectations of flat to up 1%.
"The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call," Zacks Investment Research noted in its analysis.
The stock was already under pressure heading into earnings, having fallen 13% over the prior seven trading sessions. Shares are now trading near their 52-week low of $38.59, down roughly 35% from their yearly high of $59.63 set last year. The stock slipped 0.6% in pre-market trading following the earnings release.
Analysts have been downgrading the stock in recent weeks as the company's challenges have become apparent. Wells Fargo downgraded General Mills from 'Equal-Weight' to 'Underweight' on March 12, slashing its price target from $45 to $35. Barclays lowered its target to $43 from $46 on March 16 while maintaining an 'Equal Weight' rating, and Bank of America cut its rating from 'Buy' to 'Neutral' in late February with a $48 price target.
The average analyst price target now sits at approximately $46, still above current levels, but consensus ratings have shifted to a 'Hold' from 'Buy' territory.
Chief Executive Jeff Harmening has acknowledged that GLP-1 weight loss drugs are having a 'lasting influence' on the food market, forcing the company to reassess its product mix toward smaller portions and nutrient-dense foods. Research shows GLP-1 users reduce grocery spending by about 6% and restaurant spending by roughly 8% within six months of starting medication, shifting demand toward higher protein and fiber content.
Beyond the GLP-1 trend, General Mills is grappling with broader volume weakness across its categories. The company's cereal business, a major revenue driver, faces increased competition from protein-based alternatives. While cereal pounds sold rose about 1% in the quarter, dollar sales experienced a slight decline. Overall organic net sales decreased 3%, driven by lower organic pound volume and unfavorable pricing and mix.
Operational challenges have also mounted. Retailer inventory headwinds and weather-related supply chain disruptions contributed to the quarterly decline, according to analyst coverage of the earnings call transcript. The company has also cited ongoing tariff uncertainty as a potential headwind, though these costs are not yet reflected in current guidance.
The earnings miss represents a significant step back from the prior year, when the company reported EPS of $1 per share on revenue of $4.84 billion in the same quarter. The double-digit earnings decline reflects both top-line pressure from weaker volumes and ongoing margin compression as the company invests in innovation and promotional activity to drive demand.
Looking ahead, investors will be watching for signs of volume stabilization and progress on the company's turnaround strategy. With the stock trading at roughly 8.4 times trailing earnings—the lowest multiple in its sector peers according to market data from YCharts—much of the bad news may already be priced in. However, continued volume declines and the structural shift in consumer behavior driven by weight loss medications could extend the recovery timeline further than expected.