# General Mills (GIS) Sector: Packaged foods | Field | Value | |---|---| | Price | $33.13 | | Fair value (Analysts) | $43.00 | | Discount to fair value | 23% | | Fair value uncertainty (Analysts) | Medium | | Economic moat (Analysts) | Narrow | | LSEG analyst rating (1 strong buy to 5 strong sell) | 3.05 | | Data as of | 2026-10-16 | | Next earnings | 2026-12-23 (estimate) | ## In short The market prices General Mills for falling volume and lower profits in US packaged food, and stable organic sales with cost savings that protect earnings under the new CEO can close the gap. ## Themes and gap - Themes: Weak consumer (weak-consumer), New management (management-change), Weight-loss drugs (weight-loss-drugs) - Gap type: Can close (closable) - Why: The Q2 fiscal 2027 report in December 2026 and the fiscal 2028 outlook in July 2027 show whether volume stabilizes and profit growth returns. ## About General Mills makes packaged foods and pet food. Its brands include Cheerios, Nature Valley, Pillsbury, Betty Crocker, Old El Paso, Annie's, Totino's and Blue Buffalo. It reports four segments. North America Retail sells cereal, snacks, meals and baking products to US and Canadian stores, and it was $2.4 billion of the $4.4 billion of net sales in Q1 fiscal 2027. North America Pet sells Blue Buffalo and other pet foods. North America Foodservice sells to restaurants, schools and other food service customers. International sells mainly in Europe, Asia and other markets. General Mills also owns half of Cereal Partners Worldwide, a joint venture with Nestle, and half of Haagen-Dazs Japan. It sold its US yogurt business in fiscal 2026 and its Brazil business on September 2, 2026. Its fiscal year ends in late May. ## Thesis The market prices General Mills for falling volume and lower profits in US packaged food. Consumers are under pressure and buy less, and General Mills invested in lower prices in fiscal 2026 to defend its brands. Organic net sales fell 2% in fiscal 2026 and adjusted EPS fell 16% to $3.55. The fiscal 2027 guidance is for another fall in adjusted EPS, to $3.00 to $3.20. In Q1 fiscal 2027, North America Retail organic net sales fell 3% and its operating profit fell 15%. In Q4 fiscal 2026, General Mills recorded $1.8 billion of goodwill and brand charges, mostly because discount rates rose. For the gap to close, three things must be true. Organic net sales must stabilize within the fiscal 2027 range of down 1.5% to up 0.5%, and North America Retail volume must stop falling. The at least $750 million of cost savings planned for fiscal 2027 must offset input cost inflation, so that adjusted EPS stays within $3.00 to $3.20. The new CEO, Dana McNabb from January 1, 2027, must keep the dividend and a path back to profit growth in fiscal 2028. The Q2 fiscal 2027 report, expected in December 2026, and the fiscal 2028 outlook in about July 2027 are the main tests. If they pass, the gap can close over the next four to six quarters. The main reason it may not close is weak consumer demand that lasts, which would keep volume falling and force more price cuts. ## Checkpoints - Dec 23, 2026 (estimate): Q2 fiscal 2027 results: volume and cost savings. Status: Pending. Watch: Organic net sales within the down 1.5% to up 0.5% range, a smaller fall in North America Retail and adjusted EPS guidance of $3.00 to $3.20 kept pass; a guidance cut fails. - Jan 1, 2027: Dana McNabb becomes CEO. Status: Pending. Watch: A smooth handover with the strategy, the dividend and the cost savings plan kept passes; a large new charge or a dividend cut fails. - Jul 2027 (estimate): Fiscal 2027 results and the fiscal 2028 outlook. Status: Pending. Watch: Adjusted EPS of at least $3.00 and a fiscal 2028 outlook with growth in organic net sales and adjusted EPS pass; another year of lower EPS fails. ## Balance sheet - Cash: $433M - Debt: $13.6B - Net debt: $13.2B - Undrawn credit line: $2.7B, to October 2029 - Debt due within 12 months: $1.2B General Mills funds itself mostly with senior notes and commercial paper. Debt is long-term debt of $12,367 million, its current portion of $1,047 million and notes payable of $202 million at August 30, 2026. Notes payable were mostly US commercial paper at a 3.8% rate. The $2.7 billion committed credit facility runs to October 2029 and was not drawn. General Mills also had $776 million of uncommitted lines, with $12 million drawn. It complied with all its debt covenants. Total equity was $7.5 billion against $30.3 billion of total assets, because goodwill and brand intangible assets are a large part of the assets. In Q1 fiscal 2027, cash from operations was $298 million, capital investments were $90 million and dividends were $330 million, and General Mills bought back no shares. The quarterly dividend is $0.61 per share. The company expects free cash flow of about 95% of adjusted after-tax earnings in fiscal 2027. The Brazil sale closed on September 2, 2026, after the quarter. As of 2026-08-30. Sources: - https://www.sec.gov/Archives/edgar/data/40704/000162828026063201/gis-20260830.htm - https://www.sec.gov/Archives/edgar/data/40704/000162828026063141/a20260923ex99.htm - https://www.sec.gov/Archives/edgar/data/40704/000162828026046337/a20260701ex99.htm ## Recent events - 2026-09-29: The board elected Dana McNabb as CEO from January 1, 2027. She succeeds Jeff Harmening, who retires as CEO and stays as Executive Chair. Ms. McNabb joined General Mills in 1999 and has been Chief Operating Officer since June 2026. - 2026-09-23: General Mills reported Q1 fiscal 2027 results. Net sales fell 3% to $4.4 billion because of the US yogurt sale, and organic net sales were flat. Adjusted operating profit fell 11% in constant currency, and adjusted EPS fell 13% to $0.75. North America Retail organic net sales fell 3%. General Mills bought back no shares, and it kept its fiscal 2027 guidance. - 2026-09-02: General Mills completed the sale of its Brazil business. - 2026-07-01: General Mills reported fiscal 2026 results. Net sales fell 5% to $18.4 billion, organic net sales fell 2%, and adjusted EPS fell 16% to $3.55. It recorded $1.8 billion of goodwill and brand intangible asset charges and a $1.0 billion valuation loss for the Brazil sale, so diluted EPS was a loss of $0.16. For fiscal 2027, it guided organic net sales of down 1.5% to up 0.5% and adjusted EPS of $3.00 to $3.20. It set a target of $3 billion of total cost savings by fiscal 2030. ## Risks - High: Volume falls in US packaged food. In Q1 fiscal 2027, total organic volume fell 1 point and North America Retail organic net sales fell 3%. More price cuts or more spending on brands can lower margins further. - Medium: Input costs rose in fiscal 2027, and tariffs can raise them more. The plan depends on at least $750 million of cost savings in fiscal 2027. If savings fall short, adjusted EPS can fall below the $3.00 to $3.20 guidance. - Medium: General Mills recorded $1.8 billion of goodwill and brand charges in Q4 fiscal 2026. More charges are possible if brands keep losing sales or if discount rates rise again. - Medium: The CEO changes on January 1, 2027. A new CEO can change the strategy, the brand portfolio or the use of cash. - Low: Weight-loss drugs can reduce how much snack food and cereal some consumers buy over time. ## Links - Page: https://picks.kamadorueda.com/company/GIS/ - History of changes: https://picks.kamadorueda.com/company/GIS/history/ - JSON with full history: https://picks.kamadorueda.com/data/company/GIS.json > Picks is a personal record of stock picks. It gives information only, not financial, investment, tax or legal advice. Prices, fair values and ratings can be delayed or wrong; check the original source. Full disclaimer: /disclaimer/.