General Mills Q2 Earnings Plunge 48% Amid Restructuring, Sales Dip

TL;DR

**General Mills' Q2 results are a red flag, showing deep cuts and asset impairments that overshadow divestiture gains; expect continued volatility as they restructure.**

AI Summary

General Mills Inc. (GIS) reported a significant decline in net sales and net earnings for the quarter ended November 23, 2025, with net sales decreasing by 7.2% to $4,860.8 million from $5,240.1 million in the prior year. Net earnings attributable to General Mills plummeted by 48.1% to $413.0 million from $795.7 million. This sharp decline was primarily driven by a substantial increase in restructuring, transformation, impairment, and other exit costs, which surged to $122.1 million from $1.2 million in the comparable quarter. The company also recorded a $1,054.4 million divestitures gain for the six-month period, largely from the sale of its U.S. yogurt business to Groupe Lactalis S.A., which positively impacted operating profit for the six-month period to $2,453.8 million, up from $1,909.4 million. However, a $52.9 million non-cash impairment charge related to the Uncle Toby's brand intangible asset and $45.4 million in asset write-offs for supply chain initiatives further impacted profitability. Diluted EPS fell to $0.78 from $1.42 year-over-year for the quarter.

Why It Matters

This filing reveals significant operational challenges and strategic shifts for General Mills. The sharp decline in net earnings and sales, coupled with substantial restructuring and impairment charges, signals a period of significant transformation. Investors should be concerned about the immediate impact on profitability and the long-term effectiveness of these restructuring efforts in a competitive consumer packaged goods market. Employees in affected supply chain operations may face job insecurity, while customers could see changes in product availability or pricing as the company optimizes its portfolio and operations. The divestiture of the U.S. yogurt business, while generating a gain, also indicates a strategic narrowing of focus, potentially impacting market share and competitive dynamics within the food industry.

Risk Assessment

Risk Level: high — The risk level is high due to the 48.1% decrease in net earnings attributable to General Mills for the quarter, from $795.7 million to $413.0 million, and a 7.2% decline in net sales. Furthermore, restructuring, transformation, impairment, and other exit costs surged to $122.1 million, including a $52.9 million non-cash impairment charge for the Uncle Toby's brand, indicating significant operational distress and asset value erosion.

Analyst Insight

Investors should exercise caution and consider a 'hold' or 'reduce' position on GIS. Monitor future filings closely for signs that the ongoing restructuring and supply chain initiatives are yielding tangible improvements in sales and profitability, rather than just generating one-time gains from divestitures.

Financial Highlights

revenue

$4,860.8M

net Income

$413.0M

eps

$0.78

cash Position

$683.4M

revenue Growth

-7.2%

Revenue Breakdown

Key Numbers

• $4,860.8M — Net Sales (Decreased 7.2% from $5,240.1M in Q2 2024)
• $413.0M — Net Earnings Attributable to General Mills (Decreased 48.1% from $795.7M in Q2 2024)
• $0.78 — Diluted Earnings Per Share (Decreased from $1.42 in Q2 2024)
• $122.1M — Restructuring, Transformation, Impairment, and Other Exit Costs (Increased significantly from $1.2M in Q2 2024)
• $1,054.4M — Divestitures Gain (Recorded for the six-month period ended Nov 23, 2025)
• $52.9M — Uncle Toby's Brand Impairment (Non-cash charge in Q2 2026)
• $45.4M — Asset Write-offs (Related to supply chain initiatives in Q2 2026)
• $683.4M — Cash and Cash Equivalents (As of Nov 23, 2025, up from $363.9M as of May 25, 2025)
• $1,538.9M — Net Cash Provided by Investing Activities (Primarily due to proceeds from divestitures for the six-month period)
• $2,434.2M — Net Cash Used by Financing Activities (For the six-month period, including debt payments and share repurchases)

Key Players & Entities

• GENERAL MILLS INC (company) — registrant
• Groupe Lactalis S.A. (company) — acquirer of US yogurt business
• Sodiaal International (company) — acquirer of Canada yogurt business
• NX Pet Holding, Inc. (company) — acquired company (Whitebridge Pet Brands)
• Uncle Toby's (company) — brand with intangible asset impairment
• $4,860.8 million (dollar_amount) — net sales for quarter ended Nov 23, 2025
• $413.0 million (dollar_amount) — net earnings attributable to General Mills for quarter ended Nov 23, 2025
• $122.1 million (dollar_amount) — restructuring, transformation, impairment, and other exit costs for quarter ended Nov 23, 2025
• $1,046.5 million (dollar_amount) — pre-tax gain from sale of US yogurt business
• $52.9 million (dollar_amount) — non-cash impairment charge related to Uncle Toby's brand

FAQ

Risk Factors

• Supply Chain Disruptions [medium — operational]: The company experienced asset write-offs totaling $45.4 million related to supply chain initiatives. Continued disruptions or inefficiencies in the supply chain could lead to increased costs and impact product availability.
• Restructuring and Exit Costs [medium — financial]: Restructuring, transformation, impairment, and other exit costs surged to $122.1 million in the quarter, up from $1.2 million in the prior year. Significant ongoing restructuring efforts may continue to impact short-term profitability.
• Brand Impairment [low — financial]: A non-cash impairment charge of $52.9 million was recorded for the Uncle Toby's brand intangible asset. Further impairments or declines in brand value could negatively affect the company's balance sheet.
• Consumer Demand Shifts [medium — market]: The decline in net sales suggests potential shifts in consumer preferences or reduced demand for certain product categories. Failure to adapt to evolving consumer tastes could lead to sustained revenue pressure.

Industry Context

General Mills operates in the highly competitive packaged food industry, facing pressure from both large established players and emerging niche brands. Trends include a growing demand for healthier options, plant-based alternatives, and convenient meal solutions. Retailer consolidation and private label competition also pose challenges, requiring continuous innovation and efficient supply chain management.

Regulatory Implications

The company must comply with food safety regulations, labeling requirements, and advertising standards across its diverse markets. Changes in trade policies or tariffs could also impact international sales and sourcing. Increased scrutiny on environmental, social, and governance (ESG) factors may also necessitate greater transparency and investment in sustainable practices.

What Investors Should Do

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Key Dates

• 2025-11-23: Quarter ended November 23, 2025 — Reported significant decline in net sales and net earnings, impacted by increased restructuring costs and a divestiture gain in the six-month period.
• 2025-05-25: Fiscal Year End May 25, 2025 — Previous fiscal year end, provides a basis for year-over-year comparisons.
• 2025-11-23: Six-month period ended November 23, 2025 — Included a substantial $1,054.4 million divestitures gain from the sale of the U.S. yogurt business, boosting operating profit.
• 2024-11-24: Quarter ended November 24, 2024 — Prior year comparable period for net sales and earnings analysis.
• 2026-05-31: Fiscal Year Ending May 31, 2026 — The current fiscal year for which the 10-Q provides interim results.

Glossary

Restructuring, transformation, impairment, and other exit costs

Expenses incurred due to significant changes in business operations, including closing facilities, workforce reductions, or writing down asset values. (These costs significantly impacted net earnings in the current quarter, masking underlying operational performance.)

Divestitures gain

Profit recognized from the sale of a business unit or asset. (A large gain from the sale of the U.S. yogurt business significantly boosted operating profit for the six-month period.)

Non-cash impairment charge

A reduction in the carrying value of an asset on the balance sheet that does not involve an outflow of cash. (The $52.9 million charge for the Uncle Toby's brand indicates a decrease in the perceived value of that intangible asset.)

Diluted Earnings Per Share (EPS)

A company's net profit divided by the total number of diluted common shares outstanding, including the potential dilution from stock options and convertible securities. (A key metric for investors, showing a significant decrease from $1.42 to $0.78 year-over-year for the quarter.)

Net sales

The total revenue generated from the sale of goods or services, net of returns, allowances, and discounts. (The primary measure of top-line performance, which declined by 7.2% in the quarter.)

Operating profit

Profit generated from a company's core business operations, before interest and taxes. (While impacted by specific charges, the six-month operating profit was positively influenced by the divestiture gain.)

Year-Over-Year Comparison

Compared to the prior year's comparable quarter, General Mills experienced a notable 7.2% decline in net sales, falling to $4,860.8 million. This translated into a sharp 48.1% decrease in net earnings attributable to General Mills, dropping to $413.0 million, with diluted EPS falling from $1.42 to $0.78. The primary driver for this decline was a substantial increase in restructuring, transformation, impairment, and other exit costs, which rose dramatically from $1.2 million to $122.1 million. While the six-month period benefited from a significant $1,054.4 million divestiture gain, the quarterly performance highlights considerable headwinds.

Filing Documents

• gis-20251123.htm (10-Q) — 3178KB
• exhibit101.htm (EX-10.1) — 22303KB
• exhibit311.htm (EX-31.1) — 8KB
• exhibit312.htm (EX-31.2) — 8KB
• exhibit321.htm (EX-32.1) — 3KB
• exhibit322.htm (EX-32.2) — 3KB
• 0001628280-25-057598.txt ( ) — 35431KB
• gis-20251123.xsd (EX-101.SCH) — 51KB
• gis-20251123_cal.xml (EX-101.CAL) — 80KB
• gis-20251123_def.xml (EX-101.DEF) — 205KB
• gis-20251123_lab.xml (EX-101.LAB) — 616KB
• gis-20251123_pre.xml (EX-101.PRE) — 429KB
• gis-20251123_htm.xml (XML) — 2318KB

– Financial Information

PART I – Financial Information

Financial Statements

Item 1. Financial Statements Consolidated Statements of Earnings for the quarters and six-month periods ended November 23, 2025 and November 24, 2024 4 Consolidated Statements of Comprehensive Income for the quarters and six-month periods ended November 23, 2025 and November 24, 2024 5 Consolidated Balance Sheets as of November 23, 2025 and May 25, 2025 6 Consolidated Statements of Total Equity for the quarters and six-month periods ended November 23, 2025 and November 24, 2024 7 Consolidated Statements of Cash Flows for the six-month periods ended November 23, 2025 and November 24, 2024 9

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 22

Quantitative and Qualitative Disclosures About Market Risk

Item 3. Quantitative and Qualitative Disclosures About Market Risk 40

Controls and Procedures

Item 4. Controls and Procedures 41

– Other Information

PART II – Other Information

Unregistered Sales of Equity Securities and Use of Proceeds

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 41

Other Information

Item 5. Other Information 41

Exhibits

Item 6. Exhibits 42

Signatures

Signatures 43 4

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements. Consolidated Statements of Earnings GENERAL MILLS, INC. AND SUBSIDIARIES (Unaudited) (In Millions, Except per Share Data) Quarter Ended Six-Month Period Ended Nov. 23, 2025 Nov. 24, 2024 Nov. 23, 2025 Nov. 24, 2024 Net sales $ 4,860.8 $ 5,240.1 $ 9,378.3 $ 10,088.2 Cost of sales 3,168.3 3,309.0 6,153.0 6,468.3 Selling, general, and administrative expenses 842.4 852.0 1,687.5 1,707.1 Divestitures gain — — ( 1,054.4 ) — Restructuring, transformation, impairment, and other exit costs 122.1 1.2 138.4 3.4 Operating profit 728.0 1,077.9 2,453.8 1,909.4 Benefit plan non-service income ( 15.7 ) ( 13.8 ) ( 30.8 ) ( 27.7 ) Interest, net 125.9 124.6 258.7 248.2 Earnings before income taxes and after-tax (loss) earnings from joint ventures 617.8 967.1 2,225.9 1,688.9 Income taxes 143.9 194.8 554.8 352.2 After-tax (loss) earnings from joint ventures ( 59.6 ) 30.0 ( 52.8 ) 49.2 Net earnings, including earnings attributable to noncontrolling interests 414.3 802.3 1,618.3 1,385.9 Net earnings attributable to noncontrolling interests 1.3 6.6 1.1 10.3 Net earnings attributable to General Mills $ 413.0 $ 795.7 $ 1,617.2 $ 1,375.6 Earnings per share – basic $ 0.78 $ 1.43 $ 3.00 $ 2.46 Earnings per share – diluted $ 0.78 $ 1.42 $ 3.00 $ 2.45 See accompanying notes to consolidated financial statements. 5 Consolidated Statements of Comprehensive Income GENERAL MILLS, INC. AND SUBSIDIARIES (Unaudited) (In Millions) Quarter Ended Six-Month Period Ended Nov. 23, 2025 Nov. 24, 2024 Nov. 23, 2025 Nov. 24, 2024 Net earnings, including earnings attributable to noncontrolling interests $ 414.3 $ 802.3 $ 1,618.3 $ 1,385.9 Other comprehensive income (loss), net of tax: Foreign currency translation 12.4 28.8 ( 52.3 ) ( 33.1 ) Net actuarial loss —

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (1) Background The accompanying Consolidated Financial Statements of General Mills, Inc. (we, us, our, General Mills, or the Company) have been prepared in accordance with accounting principles generally accepted in the United States (GAAP) for interim financial information and with the rules and regulations for reporting on Form 10-Q. Accordingly, they do not include certain information and disclosures required for comprehensive financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been included and are of a normal recurring nature, including the elimination of all intercompany transactions. Operating results for the fiscal quarter ended November 23, 2025 , are not necessarily indicative of the results that may be expected for the fiscal year ending May 31, 2026 . These statements should be read in conjunction with the Consolidated Financial Statements and footnotes included in our Annual Report on Form 10-K for the fiscal year ended May 25, 2025 . The accounting policies used in preparing these Consolidated Financial Statements are the same as those described in Note 2 to the Consolidated Financial Statements in that Form 10-K. Certain reclassifications to our previously reported financial information have been made to conform to the current period presentation. Certain terms used throughout this report are defined in the "Glossary" section below. (2) Acquisition and Divestitures During the first quarter of fiscal 2026, we completed the sale of our United States yogurt business to Groupe Lactalis S.A. and recorded a pre-tax gain of $ 1,046.5 million . During the third quarter of fiscal 2025, we completed the sale of our Canada yogurt business to Sodiaal International and recorded a pre-tax gain of $ 95.9 million . In the first quarter of fiscal 2026, we recorded a sale price adjustment that resulted in a $ 7.9 million increa