General Mills is optimistic that its investment program aimed at restoring volume growth will yield positive results throughout the fiscal year, following a challenging quarter.
In the opening quarter of fiscal 2026, sales declined across the US food group’s portfolio, with North America retail, its largest regional segment, leading the drop in volumes.
While sales and volumes have been impacted by the disposal of yogurt products in the region, Chairman and CEO Jeff Harmening emphasized that the priority for the Nature Valley snack bar maker is “returning to profitable organic growth.”
During prepared remarks accompanying the three-month results through 24 August, Harmening expressed increasing confidence that the company’s strategy is effective. General Mills is focused on investing to support volumes and driving innovation centered around “remarkability.”
Profit results faced significant pressure in the fiscal 2026 first quarter due to increased investments and the yogurt divestiture, and this trend is anticipated to persist in the next quarter.
“Importantly, [profits] will improve in the back half of this year, certainly in Q4, but throughout the back half of the year,” Harmening reiterated.
He continued, “So far, so good. We strengthened our pound share in eight of our top 10 categories and now we’re holding pound share in pet.”
“While price remains an important tool in today’s environment, it is insufficient to drive lasting growth. Sustainable, profitable growth hinges on ensuring that all elements of remarkability—product, packaging, messaging, omnichannel execution, and value—truly resonate with consumers.”
In terms of reported performance, General Mills experienced an eight-point decline in volumes across the group during the quarter, despite a positive one-point contribution from price/mix. North America retail observed a notable 16-point drop, while international business saw a two-point decrease.
In North America, pet volumes increased by one point, while the foodservice division experienced a two-point decline.
Overall, reported sales and organic revenues for the Cheerios cereals owner were down 7% and 3%, respectively, totaling $4.5 billion compared to the same quarter of fiscal 2025.
Dana McNabb, General Mills’ president for retail and pet in North America, participated in a Q&A session this week, addressing how the company balances pricing, volumes, and promotions.
“As we transitioned into this fiscal year, our focus has been on adjusting our base shelf price, ensuring we remain competitive,” McNabb stated.
“We need to implement these adjustments across two-thirds of our portfolio, and we accomplished the majority of this in Q1. The outcomes have exceeded our expectations. The remainder of the base-price adjustments will be completed in Q2.”
McNabb also mentioned that once the pricing adjustments are finalized, General Mills will ramp up innovation efforts, particularly in enhanced protein products such as snacks and bars.
“We’re increasing our new product development from approximately 3.5% to 5% of net sales,” she noted, highlighting that household penetration rates across General Mills’ North American retail portfolio grew for the “first time since fiscal 2022.”
Snack bars, along with both fruit and salty snacks, and cereals were specifically mentioned.
“Maintaining manageable gaps relative to the competition drove that penetration improvement. Additionally, our successful approach to remarkability—backed by strong advertising and quality product innovation—contributed to the best results,” McNabb concluded.
Regarding the US government’s initiatives to minimize additives and colorings in food products, Harmening underscored General Mills’ longstanding commitment and progress in this area. However, he criticized the fragmented nature of local regulations.
“Numerous state regulations are being introduced now, which poses challenges,” he stated. “This fragmented approach complicates matters for consumers, as it incurs costs associated with managing regulations state by state, rather than on a federal level. This ultimately impacts consumers directly.”
“The entire industry faces challenges with a state-by-state approach. This is not solely our issue. A consistent federal standard would be far more beneficial,” he emphasized.
