Group 1 - Barclays has lowered the target price for General Mills from $54 to $52 while maintaining a "Hold" rating [1]

Group 1 - General Mills, Inc. (NYSE:GIS) is recognized as one of the 13 best high dividend stocks to buy under $100, with a market capitalization of nearly $27 billion, indicating its significant presence in the consumer staples sector [1][2] - The company specializes in packaged food products and has the ability to compete effectively in distribution, R&D, and marketing due to its scale, positioning it as a potential industry consolidator [2] - A notable acquisition by General Mills was Blue Buffalo, a leading natural pet food brand, which has allowed the company to strengthen its pet-food business through additional smaller deals [3] Group 2 - On June 25, General Mills declared a 1.7% increase in its quarterly dividend to $0.61 per share, marking the fifth consecutive year of dividend growth, and it has been paying regular dividends for 127 years [4] - The stock currently has a dividend yield of 4.89% as of September 18, highlighting its attractiveness to income-focused investors [4]

Group 1 - UBS has lowered the target price for General Mills from $49 to $47 while maintaining a "sell" rating [1]

Core Viewpoint - General Mills, Inc. reported fiscal 2026 first-quarter results that exceeded Wall Street expectations, with adjusted earnings per share of 86 cents and revenue of $4.52 billion, slightly above projections [1]. Financial Performance - Adjusted earnings per share of 86 cents surpassed analyst estimates of 81 cents per share [1]. - Revenue for the quarter was $4.52 billion, edging past projections of $4.51 billion [1]. Fiscal Outlook - The company reaffirmed its fiscal 2026 outlook, forecasting a decline in adjusted operating profit and adjusted EPS by 10% to 15% in constant currency [2]. Analyst Insights - RBC Capital Markets analyst Nik Modi maintained an Outperform rating on General Mills with a price target of $63, indicating confidence in the company's ability to navigate a sluggish environment [3]. - Modi noted that the EPS guidance for FY26 provides a cushion for the company despite ongoing price investments [3]. Pricing Strategy - General Mills is adjusting price/value across approximately two-thirds of its portfolio to address price cliffs and gaps, with over half of the adjustments completed in the first quarter [4]. - The management is committed to further pricing moves, which is seen as a positive sign [4]. Growth Drivers - Growth was primarily driven by markets in India, North Asia, and Europe, with improvements noted in China due to minimal impact from closing underperforming Häagen-Dazs stores [4]. Segment Performance - Segment margins benefited from the closure of underperforming stores, while Häagen-Dazs at retail and Wanchi Ferry showed solid growth [5]. Future Initiatives - The management reiterated a target of approximately 5,000 coolers for the fresh pet food rollout by the end of the second quarter, with about 1,000 coolers expected to be in place by the end of September [5]. Sales Projections - Analyst projections for full-year organic sales have been adjusted to a decline of 0.4%, down from a previous estimate of -0.1%, reflecting slightly reduced growth assumptions for the second half of the year [5]. Earnings Growth - The analyst maintains an EPS growth estimate of -14.2%, suggesting that the first-quarter upside may be offset over the remainder of the year [6].

Core Viewpoint - General Mills, Inc. reported fiscal 2026 first-quarter results that exceeded Wall Street expectations, with adjusted earnings per share of 86 cents and revenue of $4.52 billion, slightly above projections [1] Group 1: Financial Performance - Adjusted earnings per share came in at 86 cents, surpassing analyst estimates of 81 cents [1] - Revenue for the quarter was $4.52 billion, edging past projections of $4.51 billion [1] - The company reaffirmed its fiscal 2026 outlook, forecasting adjusted operating profit and adjusted EPS to decline by 10% to 15% in constant currency [2] Group 2: Analyst Insights - RBC Capital Markets analyst Nik Modi reiterated an Outperform rating on General Mills with a price target of $63, indicating confidence in the company's performance despite a sluggish environment [3] - Modi noted that the FY26 EPS guidance provides a cushion for the company to deliver results amid ongoing price investments [3] Group 3: Strategic Adjustments - General Mills is adjusting price/value across approximately two-thirds of its portfolio to address price cliffs and gaps, with over half of this adjustment completed in the first quarter [4] - The company is targeting around 5,000 coolers for the fresh pet food rollout by the end of the second quarter, with about 1,000 expected to be in place by the end of September [5] Group 4: Market Performance - General Mills shares were trading higher by 1.36% to $49.84 at the time of publication [6]

Core Insights - The Indian snack market is experiencing significant growth due to a convergence of demographics, economics, changing consumer behavior, and a shift towards organized retail [1][21] - The market is evolving from traditional snacks to a diverse range of products, including protein bars, baked snacks, and health-focused options, reflecting changing consumer preferences [3][21] Demographics and Consumer Behavior - Rapid urbanization in India is reshaping eating habits, with a growing demand for convenient, ready-to-eat snacks as dual-income households and nuclear families become more common [2][21] - Disposable incomes are rising across India, including Tier 2, 3, and rural areas, leading consumers to opt for premium and branded snack options [5][21] - Over 50% of India's population is under 30, creating a favorable market for innovative and adventurous food choices [6][21] Market Dynamics - The shift from an informal to an organized sector is gaining momentum, with branded snacks preferred for their quality, safety, and distribution advantages [8][21] - Low-unit price packs (Rs 1, Rs 5, Rs 10) have made branded snacks more accessible, particularly in price-sensitive rural markets [9][21] Health and Premiumization Trends - There is a growing demand for healthier snacks, with 55% of Indians preferring preservative-free options and 52% choosing eco-conscious packaging [11][21] - Consumers are increasingly willing to pay more for premium snacks, viewing them as lifestyle statements [12][13][21] Investment and Financial Interest - The Indian snack sector is attracting significant investment from multinationals and private equity firms, indicating its profitability and scalability [14][21] - Recent high-profile deals, such as Temasek's investment in Haldiram's and interest from General Mills in Balaji Wafers, highlight the sector's appeal [14][21] Market Growth Projections - India's snacks market was valued at ₹42,695 crore in 2023 and is projected to exceed ₹95,522 crore by 2032, with a CAGR of nearly 10% [16][21] - Segments like extruded snacks and health-focused variants are expected to grow even faster, supported by increased retail access and digitization [17][21] Challenges and Competition - Price sensitivity remains a critical issue, with small price hikes potentially leading to consumer backlash [19][22] - The market faces competition from the informal sector, particularly in rural areas, where local preferences may favor traditional snack makers [19][22] - Regulatory challenges around food safety and labeling standards need careful navigation, especially for smaller brands scaling up [19][22]

Company Overview - Balaji Wafers, founded in 1982, has grown from a movie theatre snack supplier to a major player in the Indian snack market, with annual sales of Rs 6,500 crore and a net profit of nearly Rs 1,000 crore projected for 2024-25 [6][10] - The company holds a dominant market position in Gujarat, Maharashtra, and Rajasthan, commanding approximately 65% of the organized market for snacks like potato chips, namkeen, and bhujia [6][10] - Despite its regional focus, Balaji is the third-largest salty snack brand in India, following Haldiram's and PepsiCo, attributed to its low-cost, high-efficiency operational model [7][10] Investment Discussions - General Mills, the owner of brands like Pillsbury and Betty Crocker, is in talks to acquire a stake in Balaji Wafers, aiming for a majority holding, although Balaji's founders are currently only willing to sell a 10% stake [1][9] - Balaji Wafers is also engaging with multiple potential investors, emphasizing that the fundraising is intended to bring in professional management rather than to support business operations [2][10] - The company is considering an initial public offering (IPO) and aims to attract strategic investors to enhance operational efficiency and prepare for this transition [3][10] Financial Valuation and Future Plans - Balaji Wafers is contemplating divesting a stake at an estimated valuation of nearly Rs 40,000 crore, with the process of identifying potential buyers expected to conclude in three months [5][10] - The company operates four manufacturing plants and plans to double this capacity to facilitate national expansion [10] - Balaji's advertising expenditure is notably low at about 4% of revenue, compared to the industry average of 8-12%, allowing for significant reinvestment in production [9][10]

Group 1 - General Mills, Inc. reported fiscal first-quarter 2026 results that exceeded Wall Street profit expectations while reaffirming its full-year guidance [1] - The company posted adjusted earnings of $0.86 per share, surpassing analysts' forecast of $0.81, despite a 7% decline in net sales to $4.5 billion [1] - Revenue was in line with expectations at $4.52 billion but fell 3% organically, impacted by unfavorable price realization and mix in the North America Retail segment [1] Group 2 - Adjusted operating profit decreased 18% in constant currency to $711 million, although results were slightly better than internal projections [2] - The divestiture of the U.S. yogurt business generated a $1.05 billion gain, boosting reported operating profit by 108% to $1.7 billion and diluted EPS by 116% to $2.22 [2] Group 3 - By division, North America Retail sales dropped 13%, while North America Pet sales grew 6%, aided by an 11-point benefit from the Whitebridge Pet Brands acquisition [3] - North America Foodservice sales declined 4%, and International sales rose 6% [3] - General Mills reaffirmed its fiscal 2026 outlook, projecting organic net sales growth between -1% and +1%, with adjusted operating profit and EPS both expected to decline 10% to 15% in constant currency [3]

[PART I – Financial Information](index=4&type=section&id=PART%20I%20%E2%80%93%20Financial%20Information) This section presents General Mills' unaudited consolidated financial statements and management's discussion for Q1 FY26 [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents General Mills' unaudited consolidated financial statements and notes for the quarter ended August 24, 2025 [Consolidated Statements of Earnings](index=4&type=section&id=Consolidated%20Statements%20of%20Earnings) The Consolidated Statements of Earnings show a significant increase in operating profit and net earnings for Q1 FY26, driven by a divestiture gain | Metric | Quarter Ended Aug. 24, 2025 (Millions) | Quarter Ended Aug. 25, 2024 (Millions) | Change (%) | | :--------------------------------------- | :------------------------------------- | :------------------------------------- | :--------- | | Net sales | $4,517.5 | $4,848.1 | -6.8% | | Operating profit | $1,725.8 | $831.5 | 107.6% | | Net earnings attributable to General Mills | $1,204.2 | $579.9 | 107.7% | | Earnings per share – diluted | $2.22 | $1.03 | 115.5% | - Operating profit and net earnings significantly increased due to a **$1,054.4 million divestitures gain** in the current quarter[12](index=12&type=chunk) [Consolidated Statements of Comprehensive Income](index=5&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income) Total comprehensive income for General Mills more than doubled year-over-year, driven by higher net earnings | Metric | Quarter Ended Aug. 24, 2025 (Millions) | Quarter Ended Aug. 25, 2024 (Millions) | Change (%) | | :------------------------------------- | :------------------------------------- | :------------------------------------- | :--------- | | Net earnings | $1,204.0 | $583.6 | 106.3% | | Other comprehensive loss, net of tax | $(55.0) | $(56.3) | -2.3% | | Total comprehensive income | $1,149.0 | $527.3 | 117.9% | | Comprehensive income attributable to General Mills | $1,148.7 | $523.1 | 119.6% | [Consolidated Balance Sheets](index=6&type=section&id=Consolidated%20Balance%20Sheets) The balance sheet shows a slight decrease in total assets and liabilities, while total equity increased, driven by higher retained earnings | Metric | Aug. 24, 2025 (Millions) | May 25, 2025 (Millions) | Change (%) | | :--------------------------------- | :----------------------- | :---------------------- | :--------- | | Cash and cash equivalents | $952.9 | $363.9 | 161.8% | | Total current assets | $5,239.8 | $5,275.7 | -0.7% | | Total assets | $33,015.6 | $33,071.1 | -0.2% | | Total current liabilities | $7,959.6 | $7,857.3 | 1.3% | | Total liabilities | $23,496.7 | $23,859.9 | -1.5% | | Total equity | $9,518.9 | $9,211.2 | 3.3% | - Assets held for sale decreased from **$740.4 million** to **$0**, indicating the completion of divestitures[16](index=16&type=chunk) [Consolidated Statements of Total Equity](index=7&type=section&id=Consolidated%20Statements%20of%20Total%20Equity) Total equity increased quarter-over-quarter, primarily due to net earnings, partially offset by cash dividends and share repurchases | Metric | Quarter Ended Aug. 24, 2025 (Millions) | Quarter Ended Aug. 25, 2024 (Millions) | Change (%) | | :--------------------------------------- | :------------------------------------- | :------------------------------------- | :--------- | | Total equity, beginning balance | $9,211.2 | $9,648.5 | -4.5% | | Net earnings attributable to General Mills | $1,204.2 | $579.9 | 107.7% | | Cash dividends declared | $(330.9) | $(337.8) | -2.0% | | Common stock in treasury, ending balance | $(11,866.6) | $(10,601.9) | 11.9% | | Total equity, ending balance | $9,518.9 | $9,526.6 | -0.1% | [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Cash from operations decreased, while investing activities generated significant cash due to divestitures, and financing activities used more cash | Metric | Quarter Ended Aug. 24, 2025 (Millions) | Quarter Ended Aug. 25, 2024 (Millions) | Change (Millions) | | :------------------------------------- | :------------------------------------- | :------------------------------------- | :---------------- | | Net cash provided by operating activities | $397.0 | $624.2 | $(227.2) | | Net cash provided by (used by) investing activities | $1,694.8 | $(148.0) | $1,842.8 | | Net cash used by financing activities | $(1,507.2) | $(429.4) | $(1,077.8) | | Increase in cash and cash equivalents | $589.0 | $50.1 | $538.9 | | Cash and cash equivalents - end of period | $952.9 | $468.1 | $484.8 | - Investing activities were significantly boosted by **$1,803.4 million** in proceeds from divestitures in Q1 FY26[20](index=20&type=chunk) - Financing activities saw a substantial increase in cash used, primarily due to **$654.8 million** in net debt payments and **$500.0 million** in common stock repurchases[20](index=20&type=chunk) [Notes to Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes provide essential context and detail for the financial statements, covering accounting policies, significant transactions, and segment performance [(1) Background](index=9&type=section&id=(1)%20Background) Interim financial statements are prepared under GAAP, and Q1 FY26 results are not indicative of the full fiscal year - Interim financial statements are prepared under GAAP, and Q1 FY26 results are not necessarily indicative of the full fiscal year[22](index=22&type=chunk) - Accounting policies are consistent with the Annual Report on Form 10-K for the fiscal year ended May 25, 2025[23](index=23&type=chunk) [(2) Acquisition and Divestitures](index=9&type=section&id=(2)%20Acquisition%20and%20Divestitures) General Mills completed the sale of its U.S. yogurt business in Q1 FY26, recording a significant pre-tax gain, and acquired Whitebridge Pet Brands - Completed the sale of the United States yogurt business in Q1 FY26, recording a pre-tax gain of **$1,046.5 million**[25](index=25&type=chunk) - Recorded a **$7.9 million** increase to the pre-tax gain from the sale of the Canada yogurt business in Q1 FY26[25](index=25&type=chunk) - Acquired NX Pet Holding, Inc. (Whitebridge Pet Brands) for **$1.4 billion** in Q3 FY25, adding **$1,086.7 million** in goodwill and **$289.0 million** for the Tiki Pets brand[26](index=26&type=chunk) [(3) Restructuring, Transformation, Impairment, and Other Exit Costs](index=9&type=section&id=(3)%20Restructuring,%20Transformation,%20Impairment,%20and%20Other%20Exit%20Costs) The company recorded **$18.3 million** in restructuring and transformation charges in Q1 FY26, an increase from the prior year | Metric | Quarter Ended Aug. 24, 2025 (Millions) | Quarter Ended Aug. 25, 2024 (Millions) | | :------------------------------------------------ | :------------------------------------- | :------------------------------------- | | Restructuring, transformation, impairment, and other exit costs | $16.3 | $2.2 | | Cost of sales (restructuring charges) | $2.0 | $0.7 | | Total restructuring, transformation, and impairment charges | $18.3 | $2.9 | - Net cash paid for restructuring and transformation actions increased from **$2.7 million** in Q1 FY25 to **$21.0 million** in Q1 FY26[28](index=28&type=chunk) Reserve Balance for Restructuring and Transformation Actions | Metric | Amount (Millions) | | :---------------------------------- | :---------------- | | Reserve balance as of May 25, 2025 | $77.1 | | Fiscal 2026 charges | $0.6 | | Utilized in fiscal 2026 | $(8.4) | | Reserve balance as of Aug. 24, 2025 | $69.3 | [(4) Goodwill and Other Intangible Assets](index=10&type=section&id=(4)%20Goodwill%20and%20Other%20Intangible%20Assets) Goodwill and other intangible assets saw minor changes in Q1 FY26, primarily due to foreign currency translation | Metric | Aug. 24, 2025 (Millions) | May 25, 2025 (Millions) | | :---------------------------------- | :----------------------- | :---------------------- | | Goodwill | $15,660.2 | $15,622.4 | | Other intangible assets | $7,087.3 | $7,081.4 | | Total | $22,747.5 | $22,703.8 | - Annual amortization expense for finite-lived intangible assets is estimated at approximately **$20 million** for each of the next five fiscal years[31](index=31&type=chunk) - The company monitors Progresso, Nudges, True Chews, and Kitano brand intangible assets for potential impairment[34](index=34&type=chunk) [(5) Inventories](index=11&type=section&id=(5)%20Inventories) Total inventories increased from May 25, 2025, to August 24, 2025, primarily driven by an increase in finished goods | Component | Aug. 24, 2025 (Millions) | May 25, 2025 (Millions) | | :-------------------------- | :----------------------- | :---------------------- | | Finished goods | $2,068.0 | $1,883.9 | | Raw materials and packaging | $496.0 | $460.0 | | Grain | $77.8 | $112.5 | | Excess of FIFO over LIFO cost | $(590.3) | $(545.6) | | Total | $2,051.5 | $1,910.8 | [(6) Risk Management Activities](index=11&type=section&id=(6)%20Risk%20Management%20Activities) General Mills uses derivatives to manage market price risks for commodities and foreign currency, aiming for price certainty - Derivatives are used to manage price risk for principal ingredients (grains, oils, dairy) and energy costs to achieve future price certainty[36](index=36&type=chunk) - Changes in derivative values are recorded in cost of sales, with gains/losses reclassified from unallocated corporate items to segment operating profit[37](index=37&type=chunk)[38](index=38&type=chunk) Net Loss on Mark-to-Market Valuation of Commodity Positions | Metric | Quarter Ended Aug. 24, 2025 (Millions) | Quarter Ended Aug. 25, 2024 (Millions) | | :---------------------------------------------------------------- | :------------------------------------- | :------------------------------------- | | Net loss on mark-to-market valuation of certain commodity positions | $(0.5) | $(37.7) | | Net mark-to-market valuation of certain commodity positions recognized in unallocated corporate items | $(8.5) | $(28.8) | [(7) Debt](index=12&type=section&id=(7)%20Debt) Notes payable significantly decreased, primarily due to the reduction in U.S. commercial paper, while maintaining substantial credit facilities Notes Payable | Metric | Aug. 24, 2025 (Millions) | May 25, 2025 (Millions) | Weighted Average Interest Rate (Aug. 24, 2025) | | :----------------------- | :----------------------- | :---------------------- | :--------------------------------------------- | | U.S. commercial paper | $- | $669.4 | -% | | Financial institutions | $22.1 | $7.6 | 6.0% | | Total notes payable | $22.1 | $677.0 | 6.0% | Credit Facilities | Credit Facility | Borrowing Capacity (Millions) | Borrowed Amount (Millions) | | :------------------------------------ | :---------------------------- | :------------------------- | | Committed credit facility expiring October 2029 | $2,700.0 | $- | | Uncommitted credit facilities and lines of credit | $774.8 | $22.1 | | Total | $3,474.8 | $22.1 | - The company was in compliance with all credit facility covenants, including maintaining a fixed charge coverage ratio of at least **2.5 times**, as of August 24, 2025[44](index=44&type=chunk)[49](index=49&type=chunk) [(8) Noncontrolling Interests](index=13&type=section&id=(8)%20Noncontrolling%20Interests) General Mills purchased the outstanding Class A limited membership interests of General Mills Cereals, LLC in Q4 FY25 for **$252.8 million** - In Q4 FY25, General Mills purchased the outstanding GMC Class A limited membership interests for **$252.8 million**, which represented its principal noncontrolling interest[50](index=50&type=chunk) [(9) Stockholders' Equity](index=13&type=section&id=(9)%20Stockholders'%20Equity) Stockholders' equity details the components of comprehensive income and accumulated other comprehensive loss, showing various impacts Comprehensive Income Attributable to General Mills | Metric | Quarter Ended Aug. 24, 2025 (Millions) | Quarter Ended Aug. 25, 2024 (Millions) | | :------------------------------------------------ | :------------------------------------- | :------------------------------------- | | Net earnings attributable to General Mills | $1,204.2 | $579.9 | | Other comprehensive (loss) income attributable to General Mills | $(55.5) | $(56.8) | | Total comprehensive income attributable to General Mills | $1,148.7 | $523.1 | Accumulated Other Comprehensive Loss (AOCI) | Component of AOCI | Aug. 24, 2025 (Millions) | May 25, 2025 (Millions) | | :------------------------------------------ | :----------------------- | :---------------------- | | Foreign currency translation adjustments | $(941.9) | $(876.7) | | Unrealized loss from hedge derivatives | $(1.6) | $(7.4) | | Pension, other postretirement, and postemployment benefits: Net actuarial loss | $(1,718.9) | $(1,726.8) | | Prior service credits | $61.9 | $65.9 | | Accumulated other comprehensive loss | $(2,600.5) | $(2,545.0) | [(10) Stock Plans](index=13&type=section&id=(10)%20Stock%20Plans) Compensation expense related to stock-based payments decreased in Q1 FY26, with fair value estimated using a Black-Scholes model Stock-Based Payments | Metric | Quarter Ended Aug. 24, 2025 (Millions) | Quarter Ended Aug. 25, 2024 (Millions) | | :------------------------------------------ | :------------------------------------- | :------------------------------------- | | Compensation expense related to stock-based payments | $15.1 | $20.3 | | (Shortfall) windfall tax impacts of stock-based payments | $(1.5) | $2.8 | - Unrecognized compensation expense for non-vested stock awards was **$181.6 million** as of August 24, 2025, to be recognized over an average of **28 months**[55](index=55&type=chunk) Stock Option Valuation Assumptions | Assumption | Quarter Ended Aug. 24, 2025 | Quarter Ended Aug. 25, 2024 | | :------------------------ | :-------------------------- | :-------------------------- | | Risk-free interest rate | 4.2% | 4.5% | | Expected term | 8.0 years | 8.5 years | | Expected volatility | 22.3% | 21.6% | | Dividend yield | 4.7% | 3.8% | [(11) Earnings Per Share](index=15&type=section&id=(11)%20Earnings%20Per%20Share) Basic and diluted EPS significantly increased in Q1 FY26, driven by higher net earnings and fewer diluted shares outstanding | Metric | Quarter Ended Aug. 24, 2025 | Quarter Ended Aug. 25, 2024 | | :------------------------------------------ | :-------------------------- | :-------------------------- | | Net earnings attributable to General Mills (Millions) | $1,204.2 | $579.9 | | Average number of common shares – basic EPS (Millions) | 541.3 | 560.5 | | Average number of common shares – diluted EPS (Millions) | 542.5 | 563.8 | | Earnings per share – basic | $2.22 | $1.03 | | Earnings per share – diluted | $2.22 | $1.03 | - Anti-dilutive stock options, restricted stock units, and performance share units increased from **4.4 million** in Q1 FY25 to **11.6 million** in Q1 FY26[58](index=58&type=chunk) [(12) Share Repurchases](index=15&type=section&id=(12)%20Share%20Repurchases) General Mills repurchased a higher number of shares for a greater aggregate price in Q1 FY26, primarily through ASR agreements Share Repurchase Activity | Metric | Quarter Ended Aug. 24, 2025 (Millions) | Quarter Ended Aug. 25, 2024 (Millions) | | :-------------------------- | :------------------------------------- | :------------------------------------- | | Shares of common stock | 8.7 | 4.5 | | Aggregate purchase price | $454.0 | $302.2 | - Entered into two ASR agreements totaling **$500.0 million** in Q1 FY26, receiving an initial delivery of **7.5 million shares**, funded by divestiture proceeds[59](index=59&type=chunk) - The delivery of **8.7 million shares** under ASR agreements reduced outstanding shares for EPS calculation in Q1 FY26[62](index=62&type=chunk) [(13) Statements of Cash Flows (Supplemental)](index=16&type=section&id=(13)%20Statements%20of%20Cash%20Flows%20(Supplemental)) Supplemental cash flow information shows an increase in both net cash interest payments and net income tax payments for Q1 FY26 | Metric | Quarter Ended Aug. 24, 2025 (Millions) | Quarter Ended Aug. 25, 2024 (Millions) | | :------------------------- | :------------------------------------- | :------------------------------------- | | Net cash interest payments | $125.9 | $83.7 | | Net income tax payments | $24.8 | $18.7 | [(14) Retirement and Postemployment Benefits](index=16&type=section&id=(14)%20Retirement%20and%20Postemployment%20Benefits) Net periodic benefit expense for defined benefit pension plans decreased, while other postretirement benefit plans generated net income | Benefit Plan | Quarter Ended Aug. 24, 2025 (Millions) | Quarter Ended Aug. 25, 2024 (Millions) | | :-------------------------------- | :------------------------------------- | :------------------------------------- | | Defined Benefit Pension Plans | $8.7 | $10.1 | | Other Postretirement Benefit Plans | $(15.4) | $(13.3) | | Postemployment Benefit Plans | $4.4 | $5.2 | [(15) Income Taxes](index=16&type=section&id=(15)%20Income%20Taxes) The effective tax rate increased in Q1 FY26, primarily due to unfavorable tax components related to the U.S. yogurt business sale - The effective tax rate for Q1 FY26 was **25.6%**, up from **21.8%** in Q1 FY25, primarily due to unfavorable tax components from the U.S. yogurt business sale and earnings mix[90](index=90&type=chunk) - The One Big Beautiful Bill Act (OBBBA) was signed into law on July 4, 2025, with no material impact on income tax expense for Q1 FY26[65](index=65&type=chunk)[91](index=91&type=chunk) - OECD Pillar 2 rules, effective for fiscal 2025 in numerous countries, had no material impact on consolidated financial statements[66](index=66&type=chunk) [(16) Business Segment and Geographic Information](index=16&type=section&id=(16)%20Business%20Segment%20and%20Geographic%20Information) General Mills operates in four segments, with segment operating profit being the primary metric for performance assessment - Operating segments include North America Retail, International, North America Pet, and North America Foodservice[68](index=68&type=chunk) - Segment operating profit excludes unallocated corporate items, divestiture gains/losses, and restructuring costs, as these are centrally managed[74](index=74&type=chunk) Segment Net Sales and Operating Profit | Segment | Q1 FY26 Net Sales (Millions) | Q1 FY25 Net Sales (Millions) | Q1 FY26 Operating Profit (Millions) | Q1 FY25 Operating Profit (Millions) | | :------------------------ | :--------------------------- | :--------------------------- | :---------------------------------- | :---------------------------------- | | North America Retail | $2,625.5 | $3,016.6 | $564.2 | $745.7 | | International | $760.2 | $717.0 | $65.7 | $20.9 | | North America Pet | $610.0 | $576.1 | $112.9 | $119.4 | | North America Foodservice | $516.7 | $536.2 | $70.6 | $71.5 | | Total Segment | $4,512.4 | $4,845.9 | $813.4 | $957.5 | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=20&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's analysis of General Mills' financial performance, liquidity, and critical accounting estimates for Q1 FY26 [Introduction](index=20&type=section&id=Introduction) General Mills' key priorities for fiscal 2026 include returning North America Retail to volume growth and accelerating North America Pet growth - Key priorities for fiscal 2026 are to return North America Retail to volume growth, accelerate North America Pet growth, and drive efficiencies for reinvestment[78](index=78&type=chunk) - Category growth is expected to be below long-term projections due to less benefit from net price realization and mix amid a challenging consumer backdrop[78](index=78&type=chunk) - Strategic investment includes launching Blue Buffalo into the U.S. fresh pet food sub-category in calendar 2025[78](index=78&type=chunk) - The net impact of North American yogurt divestitures and Whitebridge Pet Brands acquisition is expected to reduce adjusted operating profit growth by approximately **5 points** in fiscal 2026[78](index=78&type=chunk) [Consolidated Results of Operations](index=20&type=section&id=Consolidated%20Results%20of%20Operations) In Q1 FY26, net sales decreased **7%** (3% organic), while operating profit surged **108%** due to a divestiture gain Consolidated Financial Highlights | Metric | Q1 FY26 Value (Millions) | Q1 FY25 Value (Millions) | % Change | Constant Currency Growth (a) | | :--------------------------------------- | :----------------------- | :----------------------- | :------- | :--------------------------- | | Net sales | $4,517.5 | $4,848.1 | (7)% | | | Operating profit | $1,725.8 | $831.5 | 108% | | | Net earnings attributable to General Mills | $1,204.2 | $579.9 | 108% | | | Diluted earnings per share | $2.22 | $1.03 | 116% | | | Organic net sales growth rate | | | (3)% | | | Adjusted operating profit | $711.2 | $865.3 | (18)% | (18)% | | Adjusted diluted earnings per share | $0.86 | $1.07 | (20)% | (20)% | - The **108%** increase in operating profit was primarily driven by a **$1,054.4 million** divestiture gain from the sale of the U.S. yogurt business[79](index=79&type=chunk)[87](index=87&type=chunk) Net Sales Growth Components | Component of Net Sales Growth | Q1 FY26 vs. Q1 FY25 | | :---------------------------- | :------------------ | | Contributions from volume growth | (8) pts | | Net price realization and mix | 1 pt | | Foreign currency exchange | Flat | | Net sales growth | (7)% | Organic Net Sales Growth Components | Component of Organic Net Sales Growth | Q1 FY26 vs. Q1 FY25 | | :------------------------------------ | :------------------ | | Contributions from organic volume growth | (1) pt | | Organic net price realization and mix | (2) pts | | Organic net sales growth | (3) pts | [Segment Operating Results](index=22&type=section&id=Segment%20Operating%20Results) Segment results show varied performance, with North America Retail declining, International growing, and North America Pet sales up but profit down [North America Retail Segment Results](index=22&type=section&id=North%20America%20Retail%20Segment%20Results) North America Retail net sales decreased **13%** (5% organic) in Q1 FY26, primarily due to lower volume and divestitures North America Retail Financial Highlights | Metric | Q1 FY26 Net Sales (Millions) | Q1 FY25 Net Sales (Millions) | % Change | | :-------------------------------- | :--------------------------- | :--------------------------- | :------- | | Net sales | $2,625.5 | $3,016.6 | (13)% | | Segment operating profit | $564.2 | $745.7 | (24)% | North America Retail Net Sales Growth Components | Component of Net Sales Growth | Q1 FY26 vs. Q1 FY25 | | :---------------------------- | :------------------ | | Contributions from volume growth | (16) pts | | Net price realization and mix | 3 pts | | Divestitures | (8) pts | | Net sales growth | (13)% | - Organic net sales decreased **5%**, driven by unfavorable organic net price realization and mix and a decrease in organic volume growth[99](index=99&type=chunk) [International Segment Results](index=23&type=section&id=International%20Segment%20Results) International net sales increased **6%** (4% organic) in Q1 FY26, driven by favorable net price realization and foreign currency International Financial Highlights | Metric | Q1 FY26 Net Sales (Millions) | Q1 FY25 Net Sales (Millions) | % Change | | :-------------------------------- | :--------------------------- | :--------------------------- | :------- | | Net sales | $760.2 | $717.0 | 6% | | Segment operating profit | $65.7 | $20.9 | 214% | International Net Sales Growth Components | Component of Net Sales Growth | Q1 FY26 vs. Q1 FY25 | | :---------------------------- | :------------------ | | Contributions from volume growth | (2) pts | | Net price realization and mix | 6 pts | | Foreign currency exchange | 3 pts | | Net sales growth | 6% | - International organic net sales increased **4%**, driven by favorable organic net price realization and mix, partially offset by a decrease in organic volume growth[105](index=105&type=chunk) [North America Pet Segment Results](index=24&type=section&id=North%20America%20Pet%20Segment%20Results) North America Pet net sales increased **6%** in Q1 FY26, but segment operating profit decreased **5%** due to higher costs North America Pet Financial Highlights | Metric | Q1 FY26 Net Sales (Millions) | Q1 FY25 Net Sales (Millions) | % Change | | :-------------------------------- | :--------------------------- | :--------------------------- | :------- | | Net sales | $610.0 | $576.1 | 6% | | Segment operating profit | $112.9 | $119.4 | (5)% | North America Pet Net Sales Growth Components | Component of Net Sales Growth | Q1 FY26 vs. Q1 FY25 | | :---------------------------- | :------------------ | | Contributions from volume growth | 1 pt | | Net price realization and mix | 5 pts | | Acquisition | 11 pts | | Organic net sales growth | (5) pts | | Net sales growth | 6% | - Organic net sales for North America Pet decreased **5%**, driven by a decrease in contributions from organic volume growth[110](index=110&type=chunk) [North America Foodservice Segment Results](index=25&type=section&id=North%20America%20Foodservice%20Segment%20Results) North America Foodservice net sales decreased **4%** in Q1 FY26, primarily due to lower volume and unfavorable net price realization North America Foodservice Financial Highlights | Metric | Q1 FY26 Net Sales (Millions) | Q1 FY25 Net Sales (Millions) | % Change | | :-------------------------------- | :--------------------------- | :--------------------------- | :------- | | Net sales | $516.7 | $536.2 | (4)% | | Segment operating profit | $70.6 | $71.5 | (1)% | North America Foodservice Net Sales Growth Components | Component of Net Sales Growth | Q1 FY26 vs. Q1 FY25 | | :---------------------------- | :------------------ | | Contributions from volume growth | (2) pts | | Net price realization and mix | (2) pts | | Divestitures | (5) pts | | Organic net sales growth | 1 pt | | Net sales growth | (4)% | - Organic net sales for North America Foodservice increased **1%**, driven by an increase in contributions from organic volume growth[115](index=115&type=chunk) [Unallocated Corporate Items](index=25&type=section&id=Unallocated%20Corporate%20Items) Unallocated corporate expenses remained relatively stable in Q1 FY26, with transaction costs related to the U.S. yogurt business sale | Metric | Q1 FY26 (Millions) | Q1 FY25 (Millions) | | :---------------------------------------------------------------- | :----------------- | :----------------- | | Unallocated corporate expenses | $126 | $124 | | Transaction costs related to U.S. yogurt business sale | $12 | $- | | Net increase in expense from mark-to-market valuation of commodity positions and grain inventories | $8 | $29 | | Acquisition integration costs | $1 | $2 | [Liquidity and Capital Resources](index=26&type=section&id=Liquidity%20and%20Capital%20Resources) Cash from operations decreased, while investing activities generated significant cash due to divestitures, and financing activities used more cash Cash Flow Activities | Cash Flow Activity | Q1 FY26 (Millions) | Q1 FY25 (Millions) | Change (Millions) | | :-------------------------------- | :----------------- | :----------------- | :---------------- | | Net cash provided by operating activities | $397 | $624 | $(227) | | Net cash provided by investing activities | $1,695 | $(148) | $1,843 | | Net cash used by financing activities | $(1,507) | $(429) | $(1,078) | - Investing activities were significantly boosted by **$1,798 million** cash from the sale of the U.S. yogurt business[119](index=119&type=chunk) - The company has **$2,166 million** of long-term debt maturing in the next **12 months** and expects adequate liquidity[124](index=124&type=chunk) [Critical Accounting Estimates](index=26&type=section&id=Critical%20Accounting%20Estimates) Critical accounting estimates remain consistent with the prior annual report, with no impairment found in the fiscal 2025 annual test - Critical accounting estimates, such as revenue recognition and valuation of assets, use the same assumptions and methodologies as described in the FY25 Form 10-K[126](index=126&type=chunk) - No impairment was determined for goodwill and indefinite-lived intangible assets in the fiscal 2025 annual test, but certain brands are being monitored for potential impairment[127](index=127&type=chunk) [Recently Issued Accounting Pronouncements](index=27&type=section&id=Recently%20Issued%20Accounting%20Pronouncements) General Mills is analyzing the impact of two recently issued FASB ASUs requiring additional income statement and income tax disclosures - FASB ASU 2024-03, requiring disaggregation of income statement expenses, is effective for annual periods beginning after December 15, 2026 (FY28)[128](index=128&type=chunk) - FASB ASU 2023-09, requiring enhanced income tax disclosures, is effective for annual periods beginning after December 15, 2024 (FY26)[129](index=129&type=chunk) [Non-GAAP Measures](index=27&type=section&id=Non-GAAP%20Measures) This section provides reconciliations and explanations for non-GAAP financial measures used by management to show underlying performance - Non-GAAP measures are used to provide useful information to investors and management by offering transparency to underlying performance[130](index=130&type=chunk)[131](index=131&type=chunk)[142](index=142&type=chunk) Reconciliation of Operating Profit to Adjusted Operating Profit | Metric | Q1 FY26 Value (Millions) | Q1 FY25 Value (Millions) | % of Net Sales (Q1 FY26) | % of Net Sales (Q1 FY25) | | :--------------------------------------- | :----------------------- | :----------------------- | :----------------------- | :----------------------- | | Operating profit as reported | $1,725.8 | $831.5 | 38.2% | 17.2% | | Divestitures gain | $(1,054.4) | $- | (23.3)% | -% | | Restructuring and transformation charges | $18.3 | $2.9 | 0.4% | 0.1% | | Transaction costs | $11.8 | $- | 0.3% | -% | | Mark-to-market effects | $8.5 | $28.8 | 0.2% | 0.6% | | Acquisition integration costs | $1.4 | $1.6 | -% | -% | | Adjusted operating profit | $711.2 | $865.3 | 15.7% | 17.8% | Reconciliation of Diluted Earnings Per Share to Adjusted Diluted Earnings Per Share | Metric | Q1 FY26 | Q1 FY25 | Change (%) | Constant-currency Growth (%) | | :------------------------------------------ | :------ | :------ | :--------- | :--------------------------- | | Diluted earnings per share, as reported | $2.22 | $1.03 | 116% | | | Divestitures gain | $(1.43) | $- | | | | Restructuring and transformation charges | $0.03 | $- | | | | CPW asset impairments and transaction costs | $0.02 | $- | | | | Transaction costs | $0.02 | $- | | | | Mark-to-market effects | $0.01 | $0.04 | | | | Adjusted diluted earnings per share | $0.86 | $1.07 | (20)% | (20)% | [Glossary](index=32&type=section&id=Glossary) This section defines key financial and operational terms used throughout the report, including GAAP and non-GAAP measures - Provides definitions for key terms such as 'Adjusted diluted EPS', 'Adjusted operating profit', 'Constant currency', 'Derivatives', 'Fair value hierarchy', 'Goodwill', 'Holistic Margin Management (HMM)', 'Organic net sales growth', and 'Strategic Revenue Management (SRM)'[159](index=159&type=chunk)[160](index=160&type=chunk)[161](index=161&type=chunk)[162](index=162&type=chunk)[163](index=163&type=chunk)[165](index=165&type=chunk)[167](index=167&type=chunk)[173](index=173&type=chunk)[176](index=176&type=chunk) [CAUTIONARY STATEMENT RELEVANT TO FORWARD -LOOKING INFORMATION FOR THE PURPOSE OF "SAFE HARBOR" PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995](index=34&type=section&id=CAUTIONARY%20STATEMENT%20RELEVANT%20TO%20FORWARD%20-LOOKING%20INFORMATION%20FOR%20THE%20PURPOSE%20OF%20%22SAFE%20HARBOR%22%20PROVISIONS%20OF%20THE%20PRIVATE%20SECURITIES%20LITIGATION%20REFORM%20ACT%20OF%201995) This cautionary statement identifies various risks and uncertainties that could cause actual results to differ materially from forward-looking projections - Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from projections[179](index=179&type=chunk) - Key risk factors include tariffs, supply chain disruptions, competitive dynamics, economic conditions, and regulatory changes[181](index=181&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=34&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company provides a quantitative disclosure of its estimated maximum potential value-at-risk (VaR) for various market-risk-sensitive instruments Value-at-Risk (VaR) for Market-Risk-Sensitive Instruments | Instrument Type | One-day Risk of Loss (Millions) | Change During Quarter Ended Aug. 24, 2025 (Millions) | Analysis of Change | | :------------------------ | :------------------------------ | :--------------------------------------------------- | :----------------------- | | Interest rate instruments | $41 | $(5) | Decrease in interest rate volatility | | Foreign currency instruments | $54 | $3 | Immaterial | | Commodity instruments | $2 | $(1) | Immaterial | | Equity instruments | $3 | $- | Immaterial | [Item 4. Controls and Procedures](index=35&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective as of August 24, 2025 - Disclosure controls and procedures were evaluated and deemed effective as of August 24, 2025[184](index=184&type=chunk) - No material changes occurred in internal control over financial reporting during the quarter ended August 24, 2025[185](index=185&type=chunk) [PART II – Other Information](index=35&type=section&id=PART%20II%20%E2%80%93%20Other%20Information) This section contains other required information, including equity security sales, market risk, controls, and exhibits [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=35&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) General Mills repurchased **8.7 million** shares for **$454.0 million** in Q1 FY26, primarily through ASR agreements Common Stock Repurchases | 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) | | :------------------------ | :----------------------------------- | :------------------------------- | :----------------------------------------------------------------------- | :----------------------------------------------------------------------- | | May 26, 2025 - June 29, 2025 | - | $- | - | 36,918,163 | | June 30, 2025 - July 27, 2025 | 7,520,212 | $49.92 | 7,520,212 | 29,397,951 | | July 28, 2025 - August 24, 2025 | 1,199,631 | $50.41 | 1,199,631 | 28,198,320 | | Total | 8,719,843 | $49.99 | 8,719,843 | 28,198,320 | - The company entered into two ASR agreements totaling **$500.0 million** in Q1 FY26, receiving an initial delivery of **7.5 million shares**[190](index=190&type=chunk) - The Board of Directors authorized the repurchase of up to **100,000,000 shares** of common stock on June 27, 2022, with no expiration date[189](index=189&type=chunk) [Item 5. Other Information](index=35&type=section&id=Item%205.%20Other%20Information) No director or officer adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the quarter - No director or officer adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the quarter[191](index=191&type=chunk) [Item 6. Exhibits](index=36&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including stock award agreements, CEO/CFO certifications, and iXBRL financial statements - Exhibits include forms of Performance Stock Unit, Stock Option, and Restricted Stock Unit Award Agreements[193](index=193&type=chunk) - Certifications from the Chief Executive Officer and Chief Financial Officer pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act of 2002 are included[193](index=193&type=chunk) - Financial Statements from the Quarterly Report on Form 10-Q are formatted in Inline Extensible Business Reporting Language (iXBRL)[193](index=193&type=chunk) [Signatures](index=37&type=section&id=Signatures) The report is duly signed on behalf of General Mills, Inc. by Mark A. Pallot, Vice President, Chief Accounting Officer - The report is signed by Mark A. Pallot, Vice President, Chief Accounting Officer, on September 17, 2025[196](index=196&type=chunk)

Group 1 - The core observation is that individuals on GLP-1 drugs are reducing their overall calorie intake while simultaneously developing a heightened demand for protein due to muscle mass loss [1] Group 2 - The packaged-foods producer is responding to the changing dietary needs of consumers who are using GLP-1 medications [1]