General Mills Inc (NYSE:GIS) stock fell 3.58% (As on June 25, 11:22:40 AM UTC-4, Source: Google Finance) after the company forecast annual profit below expectations, as weak demand for its refrigerated baked goods and snacks in the U.S. in a tariff-driven, uncertain macroeconomic background weighed on the Pillsbury owner. Economic uncertainty arising from President Donald Trump’s shifting tariff policies has weighed on consumer spending in the U.S., challenging General Mills’ efforts to drum up sales. The company has been trying to boost demand through new products, such as a fresh version of its Blue Buffalo pet food, betting on a rise in demand for the minimally processed fresh pet food market. But analysts expect investments in marketing and acquisitions to take a toll on its margins.
Moreover, the adjusted gross margin was down 220 basis points to 32.7 percent of net sales, driven primarily by higher input costs and unfavorable net price realization and mix. Adjusted operating profit of $622 million was down 22 percent in constant currency, driven by lower adjusted gross profit dollars and higher adjusted SG&A expenses. Adjusted operating profit margin was down 330 basis points to 13.7 percent. Net earnings attributable to General Mills of $294 million were down 47 percent.
GIS in the fourth quarter of FY25 has reported the adjusted earnings per share of 74 cents, beating the analysts’ estimates for the adjusted earnings per share of 71 cents. The company had reported the adjusted revenue decline of 3 percent to $4.56 billion in the fourth quarter of FY25, missing the analysts’ estimates for revenue of $4.59 billion. Organic net sales were also down 3 percent, including a 2-point headwind from unfavorable trade expense timing. Organic pound volume was in line with last year. Net sales at its North America retail segment, a major revenue contributor, were down 10%, offsetting gains from a 12% rise in General Mills’ pet segment sales in the region.
Additionally, cash provided by operating activities totaled $2.9 billion in fiscal 2025 compared to $3.3 billion a year ago. Divestiture gain totaled $96 million for the full year related to the sale of the Canada yogurt business. Capital investments totaled $625 million compared to $774 million a year ago. General Mills repurchased approximately 19 million shares of common stock in fiscal 2025 for a total of $1.2 billion compared to $2.0 billion in share repurchases a year ago.
The company expects full-year adjusted profit to decline between 10% and 15%, compared to analysts’ estimates of a 4.8% decline, according to data compiled by LSEG.