General Mills 4Q:26: Has investment in price boosted volume recovery and will leverage fall from here?

Research evidence excerpt

General Mills 4Q:26: Has investment in price boosted volume recovery and will leverage fall from here?

volumes remains uncertain. Meanwhile, management is rightly now focused on debt paydown, although

the fact that this is now seen as a priority does suggest that this is something of an acknowledgment that financials are

beginning to come under pressure, especially with the recent debt refinancing that includes an option to defer interest

payments.

Quarterly beat driven by margins, especially in International and NA Foodservice. Revenues of $4,610m were 0.3%

above consensus estimates, with flat organic sales growth YoY (price/mix +4% and volume -4%), above consensus of -0.2%.

This was a sequential acceleration from the -3.0% OSG seen last quarter, where price/mix was down by -1% and volume down

by -2%. The adjusted gross margin of 34.2% was 77bp above consensus and up 149bp YoY—an improvement from the -371bp

YoY seen last quarter. Adjusted EBIT of $705.4m came in 11.8% above consensus and up 13.3% YoY, while EPS of $0.95 was a

15c beat and up 29.7% YoY.

FY27 guidance mixed as OSG estimates are behind consensus but EPS is roughly in-line. For FY27, management

expects OSG between -1.5% and +0.5%, vs current consensus of +0.1%. Adj. EBIT is expected to decline -13% to -8% (vs

current consensus of -9.2%) and adj. EPS is expected to fall between $3.00 and $3.20 (vs current consensus of $3.13). The

HMM program and other cost savings actions are expected to yield at least $750m in savings, but management also expects

headwinds from input cost inflation, investing in brand remarkabilty, and normalizing incentive compensation.

EXHIBIT 1: GIS 4Q:26 Results Table

Results Consensus Actual vs. Consensus YoY Chg Previous Year

Organic growth -0.2% 0.0%