To The Moon

$General Mills(GIS)$ is scheduled to report its fiscal Q1 2026 earnings on September 17, 2025. This report is highly anticipated by investors, as the company has been facing a number of challenges, including shrinking sales volumes and margin pressures.

Expected EPS: The consensus is for adjusted earnings of $0.81 to $0.82 per share, which would represent a significant decrease from the $1.07 per share reported in Q1 2025.

Expected Revenue: Analysts forecast revenues of around $4.50 to $4.52 billion, a notable drop from $4.85 billion in the prior-year quarter.

General Mills (GIS) reported its fiscal Q4 2025 earnings on June 25, 2025, with a mixed bag of results that led to a stock price decline despite an earnings beat. Here is a summary of the key takeaways and the lessons learned from the company's guidance.

Summary of Q4 2025 Earnings

Mixed Financial Results: General Mills reported adjusted earnings per share (EPS) of $0.74, which surpassed the analyst consensus of $0.71. This was a positive surprise. However, revenue came in at $4.56 billion, slightly missing the expected $4.6 billion and representing a 3% year-over-year decline.

Declining Sales and Organic Growth: The company's net sales were down, driven by a combination of lower sales volumes and unfavorable price and product mix. Organic sales were also down 3%. This indicates a difficult operating environment, as consumers, impacted by inflation, are increasingly looking for value and shifting to private-label brands.

Segment Performance: The North America Retail segment saw a significant sales decline of 10%, while the North America Foodservice segment was down 2%. The pet food segment, particularly the Blue Buffalo brand, was a bright spot with a 12% sales increase, benefiting from a recent acquisition and the ongoing humanization trend in pet care. The International segment also showed strong growth, up 11%.

Profitability Pressures: The company's gross and operating margins were under pressure due to higher input costs, supply chain challenges, and unfavorable pricing. Adjusted operating profit was down 22% in constant currency.

The Lesson Learned from Fiscal 2026 Guidance

The market's negative reaction to the Q4 report was largely driven by the company's fiscal 2026 guidance, which signaled a period of significant strategic investment and near-term profitability pressures.

Growth Over Profitability (Short-Term): The most important lesson is that General Mills is prioritizing long-term volume and market share growth over short-term profitability. This is a strategic shift aimed at strengthening the company's competitive position in a challenging consumer environment. The company plans to increase investments in brand-building, product innovation, and marketing.

Investments in Key Areas: The guidance highlighted significant investments, particularly in the pet food segment, with a focus on expanding the Fresh Pet product line. General Mills aims to grow this segment from $3 billion to $10 billion over the next decade. This indicates the company's belief that pet care is a key growth driver that justifies near-term investment.

Near-Term Financial Headwinds: The guidance for fiscal 2026 was cautious, with expectations for organic sales growth to be flat, ranging from -1% to +1%. More significantly, the company guided for a constant-currency adjusted EPS to be down 10-15% compared to fiscal 2025. This negative outlook on earnings, driven by the increased investments and ongoing cost pressures, was the primary reason for the stock's negative reaction.

In essence, the lesson from the guidance is that General Mills is taking a "one step back, two steps forward" approach. The company is sacrificing short-term profitability to invest in its core brands and high-growth segments, with the long-term goal of returning to sustainable volume growth. For investors, this means the near-term outlook is likely to be volatile and challenging, but for those with a longer time horizon, the strategic investments could lay the groundwork for a stronger and more competitive General Mills in the years to come.

Analysis of Expectations

Analysts are generally cautious about General Mills' upcoming earnings report. The consensus expectation is for a decline in both the top and bottom lines compared to the same quarter last year.

Challenges: The company is grappling with a difficult macroeconomic environment. Consumers, faced with persistent inflation, are becoming more price-conscious and are shifting to private-label brands. This is particularly impacting sales volumes in the U.S. and some international markets. Additionally, higher input costs continue to weigh on the company's profit margins.

Key Metrics to Watch

Investors should pay close attention to the following metrics in the earnings report and subsequent call:

Organic Sales Growth: This is a crucial metric that reveals the health of the company's core business, excluding the impact of acquisitions, divestitures, and currency fluctuations. Analysts expect a decline in organic sales, so a better-than-expected result could be a positive surprise.

Profit Margins (Gross and Operating): As input costs and pricing pressures have been a major headwind, the company's ability to maintain or improve its margins will be a key indicator of its operational efficiency and pricing power.

Performance by Segment: Pay attention to the performance of different business segments, particularly North America Retail and North America Pet. The pet food segment has been a key area for growth, while the retail segment has been under pressure. Any signs of improvement or further weakness in these segments will be important.

Guidance for Fiscal 2026: The company's outlook for the remainder of the fiscal year will be a major driver of post-earnings stock movement. Management's comments on the expected trends for sales, earnings, and capital allocation will provide insight into their confidence in the company's "Accelerate" strategy.

Dividend and Share Repurchases: General Mills is a favorite among income-focused investors due to its long history of dividend payments. Any changes to the dividend policy or an announcement of new share repurchase programs could influence investor sentiment.

General Mills (GIS) Price Target

Based on 19 analysts from Tiger Brokers offering 12 month price targets for General Mills in the last 3 months. The average price target is $55.48 with a high forecast of $66.11 and a low forecast of $48.00. The average price target represents a 13.20% change from the last price of $49.01.

Short-Term Trading Opportunities

Given the cautious analyst sentiment and the potential for volatility, there could be short-term trading opportunities around the earnings report.

Potential for a "Miss": With analysts already expecting a decline in performance, a significant miss on key metrics like EPS or revenue, or a disappointing outlook, could lead to a sharp sell-off. This could create a short-term trading opportunity for those who believe the bad news is not fully priced in.

Potential for an "Earnings Beat": While the expectations are low, a positive surprise—even a modest one—could trigger a relief rally. This could happen if the company demonstrates better-than-expected sales volumes, successful cost-cutting measures, or a more optimistic outlook than anticipated.

Trading the Narrative: Beyond the numbers, the management's commentary on the earnings call will be critical. If they can articulate a clear plan for addressing the current headwinds, particularly consumer shifts and inflation, the stock could see a positive reaction regardless of the headline numbers. Conversely, a lack of a clear strategy could fuel a decline.

Technical Analysis - Exponential Moving Average (EMA)

GIS have been trading on the negative momentum for quite a long period, and the bears are still in control, so in the upcoming earnings, I think GIS need to give a clear strategy on how they planned to address the current headwinds especially consumer shifts and inflation.

The concerning sales volume would be another factor investors are not into this stock, though we are not seeing any significant decline, but any larger shrinking sales number with increasing input costs could see the stock price taking a plunge.

But if there is any significant improvement in the performance of the North America Retail and Pet segments, we might see a short price surge after its earnings.

Summary

General Mills (GIS) is set to report its fiscal Q1 2026 earnings on September 17, 2025. Analysts are anticipating a weak quarter, with forecasts for both revenue and earnings per share to decline significantly year-over-year. The consensus expects adjusted EPS of around $0.81-$0.82 on revenues of approximately $4.5 billion, down from $1.07 and $4.85 billion in the prior-year quarter.

The primary concerns for investors are shrinking sales volumes, as consumers, faced with persistent inflation, are shifting to cheaper private-label brands. The company's profit margins are also under pressure from elevated input costs. Key metrics to watch in the report include organic sales growth, the performance of the North America Retail and Pet segments, and any updates to the company's full-year fiscal 2026 guidance. Given the low expectations, a positive surprise could lead to a short-term rally, while a miss or a cautious outlook could trigger a further sell-off.

Appreciate if you could share your thoughts in the comment section whether you think GIS would be able to produce a strategy that could drive down their input costs to improve the profit margins.

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire @MillionaireTiger appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.