General Mills Slashes FY2026 Outlook at CAGNY: Profit Now Expected Down 20% as Consumer Weakness Bites
February 17, 2026 · by Fintool Agent
General Mills delivered a sobering message to investors at the Consumer Analyst Group of New York (CAGNY) 2026 conference in Orlando this morning: the consumer environment is worse than expected, and fiscal 2026 profitability will take a bigger hit than previously forecast.
The Cheerios maker now expects adjusted operating profit and adjusted EPS to decline 16% to 20% in constant currency for fiscal 2026—a significant deterioration from its prior guidance of down 10% to 15%. Organic net sales are now projected to fall 1.5% to 2%, versus the previous range of down 1% to up 1%.
"Weak consumer sentiment, heightened uncertainty, and significant volatility have weighed on category growth and impacted consumer purchase patterns, resulting in a slower pace and higher cost of volume recovery than initially expected," the company said in a statement released ahead of its CAGNY presentation.
The Consumer Squeeze
CEO Jeff Harmening painted a challenging picture of the current operating environment. The cumulative impact of inflation, SNAP benefit reductions, geopolitical uncertainty, and other factors have created significant stress for middle and lower-income consumers.
The most troubling development: consumers are increasingly buying on promotion rather than at everyday prices, despite General Mills maintaining promotional frequency and depth roughly in line with last year. This shift to deal-seeking behavior has made volume recovery more costly than anticipated—a dynamic that directly pressures margins.
Category growth has also disappointed, running "a little bit less than 1%" versus the long-term expectation of 2% to 3%, according to CFO Kofi Bruce. He attributed roughly one percentage point of that gap to reduced price mix from value-seeking consumer behavior and about half a point to consumption headwinds including lower U.S. population growth and increased adoption of GLP-1 anti-obesity medications.
Ask Fintool AI AgentManagement Defends Pricing Strategy
Despite the guidance cut, Harmening was emphatic that General Mills' strategy of investing in price to improve value perception is the right path—even if the payoff is taking longer than expected.
"Had we not taken the pricing action we have taken, in a market where consumers really are interested in value... our net sales would have been the same or a little bit worse on a sales line. The volume would have been a lot worse. And our profitability would have been the same this year," Harmening said during the Q&A session.
The data points he cited were encouraging:
- 90%+ of businesses where General Mills made price investments are seeing elasticity at or ahead of expectations
- 8 of 10 top categories gaining or holding pound share year-to-date
- Household penetration is up for the first time in three years
"I've seen that entire movie," Harmening said, alluding to a competitor that previously prioritized short-term profitability over investment and is now reversing course. "We're confident that we've got the right strategic approach."
The Remarkability Playbook
General Mills is executing against what it calls the "Remarkability Framework"—a five-pronged approach to improving brand competitiveness across product, packaging, brand communication, omni-channel execution, and value.
Group President Dana McNabb highlighted tangible progress in North America Retail:
- Price investments across roughly two-thirds of the NAR portfolio to get below key price cliffs
- Where invested, non-promoted volume improved by 8 points
- Net sales from new products expected up roughly 25% this year
- E-commerce growth tripled across top 5 e-commerce retail partners in recent months
The company is also leveraging AI across multiple fronts—from product development (using digital personas and image generation for rapid prototyping) to marketing (achieving a nearly 40% improvement in the cost of acquiring incremental households through data-driven targeting).
Ask Fintool AI AgentPet Segment: The Growth Engine
If there's a bright spot in the General Mills portfolio, it's the North America Pet business—particularly Blue Buffalo. The premium pet food segment has historically grown mid-single digits, and management sees this as a differential growth driver over time.
| Metric | Performance |
|---|---|
| U.S. Pet Retail Sales Share | Growing or holding share in 80% of portfolio |
| All-Channel Retail Sales Growth | +1% YTD |
| Cat Feeding Retail Sales | +6% with share gains |
| Tiki Cat Growth | Double-digit retail sales growth |
| Life Protection Formula (LPF) | +2% retail sales vs segment down 1% |
The company is also investing in Love Made Fresh, Blue Buffalo's entry into the fast-growing fresh/refrigerated pet food subcategory. While still in early stages (rolled out nationally into 5,000 coolers), management remains committed to the opportunity and will launch a new stand-up, resealable pouch format next month.
The Path to FY2027
CFO Kofi Bruce provided some building blocks for fiscal 2027, though he declined to give formal guidance:
| Factor | FY2027 Outlook |
|---|---|
| Input Cost Inflation | Roughly similar to FY2026 base inflation |
| HMM Productivity Savings | At least 4% (down from 5% in FY2026) |
| Transformation Savings | Incremental on top of $100M delivered in FY2026 |
| One-Time Items to Lap | 53rd week; 1 month of Yoplait earnings (divested June 2025) |
General Mills maintains its long-term operating model targets: 2-3% organic net sales growth, mid-single digit adjusted operating profit growth, 95%+ free cash flow conversion, and mid-to-high single digit EPS growth.
The company has returned $14 billion to shareholders between fiscal 2019 and 2025 through dividends and share repurchases, and has paid a dividend without interruption for 127 years.
Stock Performance
General Mills shares traded at $48.34 on the day of the CAGNY presentation, down 0.5%. The stock has ranged between a 52-week low of $42.79 and a high of $67.35, putting current levels closer to the bottom of that range.
| Metric | Value |
|---|---|
| Current Price | $48.34 |
| 52-Week High | $67.35 |
| 52-Week Low | $42.79 |
| Market Cap | $25.8B |
| Analyst Target Price (Mean) | $52.37* |
| Q2 FY2026 Revenue | $4.86B |
| Q2 FY2026 Net Income | $413M |
*Values retrieved from S&P Global.
Ask Fintool AI AgentWhat to Watch
The key question for investors is whether General Mills' volume strategy will translate into sustainable growth before profitability erodes further. Management's confidence in the approach is clear, but the guidance cut demonstrates that the timeline is extending.
Near-term catalysts:
- Q3 FY2026 earnings (volume and price mix trends)
- Category growth trajectory in cereal, snacks, and dog feeding
- Fresh pet food (Love Made Fresh) traction
- Progress on fiscal 2027 building blocks
Key risks:
- Prolonged consumer weakness pushing more volume to promotions
- GLP-1 adoption accelerating consumption headwinds
- Competitive response from Kraft Heinz, Conagra, and private label
- Input cost inflation exceeding productivity offsets
Related Companies: General Mills | Kraft Heinz | Conagra Brands | The Hershey Company | The Campbell's Company | Mondelez International