Snack Slowdown Hits General Mills

General Mills shares fell in premarket trading in New York after the processed foods giant warned of “greater-than-expected retailer inventory headwinds and a slowdown in snacking,” which weighed on third-quarter sales and led to a lowered full-year guidance.

For the quarter that ended Feb. 25, General Mills reported adjusted earnings of $1 a share, exceeding the Bloomberg Consensus by four cents. However, in a sign of a broadening consumer slowdown, net sales slid 5% from the prior year to $4.84 billion, missing the average estimate of $4.97 billion. Also, retail sales across North America dropped 7.2%. 

Here’s a snapshot of third-quarter earnings (courtesy of Bloomberg):

Adjusted EPS $1.00 vs. $1.17 y/y, estimate 97c

Adjusted gross margin 33.4% vs. 34% y/y, estimate 33%

Net sales $4.84 billion, -5% y/y, estimate $4.97 billion

• North America Retail Net Sales $3.01 billion, -7.2% y/y, estimate $3.08 billion

• North America Foodservice Net Sales $555.3 million, +0.7% y/y, estimate $573.1 million

• Pet Segment Net Sales $623.7 million, -0.1% y/y, estimate $638.6 million

• International net sales $651.3 million, -4.2% y/y, estimate $680.4 million

Organic net sales -5%, estimate -2.67%

• North America Retail organic net sales -6%, estimate -4.18%

• Pet organic net sales -5%, estimate +0.89%

• Change in North America Foodservice Organic Net Sales +1%, estimate +4.25%

• Change in International Organic Net Sales -3%, estimate -0.33%

Organic sales volume -4 pts, estimate -1.61

• North America retail organic sales volume -5 pts, estimate -3.93

• Pet organic sales volume -3 pts, estimate +0.17

• North America foodservice organic sales volume -1 pts

• International organic sales volume -4 pts, estimate +2.72

Organic sales price/mix -1 pts, estimate -1.12

• North America retail organic sales price/mix -1 pts, estimate -0.88

• Pet organic sales price/mix -1 pts, estimate -2.64

• North America foodservice organic sales price/mix +2, estimate +1.79

“Our third-quarter organic net sales finished below our expectations, driven largely by greater-than-expected retailer inventory headwinds and a slowdown in snacking categories,” General Mills Chairman and CEO Jeff Harmening wrote in a statement. 

Harmening said, “Stepping back, it’s been a challenging year.” 

General Mills adjusted its fiscal-year outlook, warning about retailer inventory headwinds and mounting macroeconomic uncertainty. 

Here’s a snapshot of the 2025 full-year forecast:

• Sees organic net sales -1.5% to -2%, saw 0% to +1%, estimate -0.33% (Bloomberg Consensus)

• Sees adj. EPS in constant currency -7% to -8%, saw -2% to -4%

• Sees Adjusted operating loss constant-currency -7% to -8%, saw -2% to -4%

RBC Capital Markets analyst Nik Modi told clients earlier that the full-year earnings outlook will likely come at the lower end of guidance. He has a Sector Perform rating with a target of $70 a share. 

Shares of General Mills are down about 5% in premarket trading in New York. As of Tuesday’s close, the stock had fallen about 5.22% year-to-date. If losses persist through the cash session, the processed foods giant could enter correction territory.

The company noted that the guidance above doesn’t include the impact of tariffs yet to be implemented: 

“Due to continued uncertainty regarding the implementation dates and scope of potential U.S. import tariffs or retaliatory tariffs put in place by other countries, this guidance does not include any impact from new tariff actions in 2025.”

The news from General Mills this morning adds to consumer concerns, as the lingering effects of failed Bidenomics continue to weigh on households early in President Trump’s second term. The current administration is working to counter disastrous economic and green policies, which fueled an inflation storm that has financially crippled many working-class families.

In the era of Trump’s MAHA, Americans should be steering clear of the toxic processed foods cartel and instead, seek real, clean food.