Executive Summary
General Mills delivered a challenging top-line quarter in Q1 FY2026, with revenue of $4.5175 billion, down 4.17% year over year and 6.71% quarter over quarter, amid a backdrop of deliberate investments to restore profitable organic growth. Operating income of $1.7258 billion produced a robust margin of 38.2%, and net income reached $1.2042 billion (net margin ≈ 26.7%), supported by favorable timing in inflation and international mix as well as disciplined cost management. Management reaffirmed fiscal 2026 guidance, signaling that the back-half of the year should show improving trajectory as investments mature and the Yoplait divestiture and Whitebridge acquisition effects unfold.
The quarter underscored the company’s strategic execution: a pronounced push into innovation and brand-building (new product launches and campaigns), ongoing price-value actions to address price cliffs, and a major push into the fresh pet-food initiative with a production and distribution ramp planned through FY2026. Management emphasized that the growth model centers on consumer-driven remarkability and gaining or protecting share in key categories, supported by HMM cost savings and a transformational efficiency program. The firm also highlighted a notable improvement in demand-planning and forecasting enabled by AI, freeing marketing to accelerate demand generation. While near-term gross margins benefited from timing and international dynamics, ongoing inflationary pressure and price/mix challenges remain key watchpoints for the remainder of the year.
Overall, GIS appears positioned to leverage its diversified portfolio (North America Retail, Pet, International, and Foodservice), a strengthening innovation cadence, and an expanding refrigerated-pet footprint to drive mid-to-back-half growth as the investment cycle matures and base dynamics normalize.
Key Performance Indicators
QoQ: 93.61% | YoY:121.48%
QoQ: 92.49% | YoY:116.00%
QoQ: 94.74% | YoY:126.53%
Key Insights
Revenue: $4.5175B, YoY -4.17%, QoQ -6.71%; Operating income: $1.7258B, margin 38.20%; EBITDA: $1.7258B; Net income: $1.2042B, net margin 26.66%; EPS: $2.22 basic/diluted; Gross profit not disclosed; SG&A: $845.1M; Free cash flow: $397.0M; Net cash provided by operating activities: $397.0M; Cash at end of period: $952.9M; Total assets: $33.0156B; Total liabilities: $23.4967B; Stockholders’ equity: $9.5066B; Total debt: $14.407B; Net debt: $13.454B; 4Q1 2026 earnings call: management reitera...
Financial Highlights
Revenue: $4.5175B, YoY -4.17%, QoQ -6.71%; Operating income: $1.7258B, margin 38.20%; EBITDA: $1.7258B; Net income: $1.2042B, net margin 26.66%; EPS: $2.22 basic/diluted; Gross profit not disclosed; SG&A: $845.1M; Free cash flow: $397.0M; Net cash provided by operating activities: $397.0M; Cash at end of period: $952.9M; Total assets: $33.0156B; Total liabilities: $23.4967B; Stockholders’ equity: $9.5066B; Total debt: $14.407B; Net debt: $13.454B; 4Q1 2026 earnings call: management reiterated that demand remains largely in line with expectations, with volume broadly flat and price/mix pressures more material to near-term performance; new-product volumes up 25% year over year; new pet initiative to install 1,000 coolers by month-end and 5,000 by end of Q2; new-product contribution and innovation mix underpinning a shift toward higher-margin growth later in the year.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
4.52B |
-4.17% |
-6.71% |
| Operating Income |
1.73B |
121.48% |
93.61% |
| Net Income |
1.20B |
116.00% |
92.49% |
| EPS |
2.22 |
126.53% |
94.74% |
Management Commentary
Strategy and guidance: Jeff Harmening reiterated: “returning to profitable organic growth as the best way to create value for our shareholders” and emphasized ongoing investments in innovation and campaigns, supported by cost savings and transformational benefits. He stressed that management is increasingly confident in the strategy’s trajectory and reaffirmed fiscal 2026 guidance. Demand and category dynamics: Harmening noted that volumes have been largely flat versus historical levels, with price/mix being the primary driver of observed share and volume dynamics. Dana McNabb highlighted that the top 10 categories showed improvement in pounds versus Q4, with certain categories (refrigerated dough, fruit snacks, salty snacks, snacks bars) showing favorable elasticities to price investments. He also acknowledged a shipment timing headwind in Pets (deliveries) that modestly impacted quarterly pounds and underscored that the company is in the process of converting Totino’s packaging to drive efficiency. Innovation and product news: McNabb cited a 25% increase in “new product volumes,” and Harmening elaborated that GIS is expanding investment in “new product news and brand campaigns,” expecting net-new product sales to rise to about 5% of net sales from roughly 3.5% a year ago. Pet strategy: The company is launching fresh pet food with a planned cooler-network rollout (1,000 coolers by month-end; 5,000 by end of Q2) and expects ramp in 2026. Demand planning and supply chain: Harmening described a technology-enabled forecasting improvement (AI-driven) that has reduced reliance on manual inputs, enabling more time for marketing and more efficient operations. Regulatory and nutrition trends: Jeff addressed reformulation and dyes elimination as consumer-driven, contending that federal-level consistency is preferable to state-by-state variation. He pointed to the 98% of K-12 offerings without certified colors as indicative of progress toward more uniform regulation.Quantitative and qualitative balance: The team acknowledged near-term margin pressure due to investments and divestitures but emphasized that operating leverage and new-product contributions should strengthen in the back half of the year.Quote highlights to guide investor focus include: “returning to profitable organic growth” (Harmening); “we are using AI and leveraging technology to get to good forecasting much more efficiently” (Harmening); “new product volumes are already up 25%” (Harmening); and “we reaffirmed our fiscal ’26 guidance” (Harmening).
"returning to profitable organic growth as the best way to create value for our shareholders"
— Jeffrey Harmening
"we're using AI and leveraging technology to get to good forecasting much more efficiently."
— Jeffrey Harmening
Forward Guidance
Outlook and key watchpoints: GIS reaffirmed its fiscal 2026 guidance, signaling a multi-quarter path to improved profitability as investments mature. Near-term profitability will reflect higher investment intensity (innovation, advertising, category renovations) and the Yoplait divestiture impact, with inflation-phasing and price-mix dynamics continuing to influence margins. Management expects Q2 to see some moderation in margin as timing benefits unwind, but expects back-half improvement as promotional activity normalizes and new-product momentum accrues. Key catalysts to monitor include: - Progress of the fresh pet-launch and cooler-distribution ramp (targets of 1,000 coolers by end-FYQ2 and 5,000 by end-FYQ2; ramp continues into 2026). - Share gains and volume stabilization in core categories, particularly cereals, refrigerated dough, fruit snacks, and salty snacks, aided by pricing architecture and advertising. - Growth in new-product contribution to sales (target ~5% of net sales). - International and foodservice momentum, including Haagen-Dazs expansion in China and other markets. - Demand planning improvements and supply-chain efficiency gains via AI and increased marketing focus. - Regulatory environment around food additives/colors at the federal level, reducing state-by-state fragmentation. Overall, investors should monitor: category mix and price/mix trajectory, the pace of margin normalization as promotional investments reduce, pet-channel contributions from the fresh pet strategy, and the sustainability of demand generation driven by innovation and campaigns.