General Mills Inc. (GIS): Solid F4Q results, with FY27 outlook dependent on innovation and cost savings to drive sequential improvement

Research evidence excerpt

General Mills Inc. (GIS): Solid F4Q results, with FY27 outlook dependent on innovation and cost savings to drive sequential improvement

Goldman Sachs General Mills Inc. (GIS)

n Pet pressured by retailer inventory headwinds: In F4Q, organic sales for Pet

decreased -3% (in line with last quarter), which lagged retail sales by ~2pts due to

changes in retailer inventory and unfavorable customer mix, with volumes down -6%

in the quarter while price/mix tracked at +3%. As ecommerce’s share of the category

continues to grow (30% of GIS pet today), we expect a retailer inventory headwind

to persist (likely -LSD in FY27), noting the channel typically holds less inventory

compared to traditional retail. By category, GIS highlighted +DD growth for cat

feeding (including strength across Tastefuls and sustained +DD growth for Tiki Cat),

+LSD growth for dog feeding (including sequential growth of +80% in Love Made

Fresh), while pet treating declined -LSD. Within dog feeding, the company indicated

continued softness in the Wilderness line, which accounted for more than 50% of the

volume decline in FY26, with plans to stabilize performance through improvements

to its value proposition, packaging renovation, optimization for ecommerce, and

leaning more into protein-forward innovation and communications. Regarding FY27,

a sequential top line improvement in pet should be supported by a slate of

innovation and media campaigns across Blue Buffalo’s Life Protection Formula, Tiki

Cat, Tastefuls, and Love Made Fresh, while profit should still be somewhat pressured

as the company annualizes its investment in fresh.

n FY27 guidance encompassed consensus: GIS introduced FY27 guidance, including

adj EPS of $3.00-$3.20, organic net sales of -1.5% to +0.5%, and an adj operating