General Mills Sees Volume Trends Improve in Q4 2025, Investments Show Early Payoff

General Mills announced its fiscal year 2025 fourth-quarter results, revealing a positive shift in volume trends and market share gains. Despite a full-year dip in organic sales, the company's strategic investments in the latter half of the year appear to be yielding promising results, setting the stage for a renewed focus on volume-driven growth in the upcoming fiscal year.

Key Takeaways

• Improved volume and pound share trends observed across the portfolio in the second half of fiscal 2025.

• North America Retail (NAR) pound share competitiveness saw significant gains in Q4.

• Company met its updated annual guidance for fiscal 2025.

• Strategic priorities for fiscal 2026 include restoring volume-driven organic growth and accelerating North America Pet segment expansion.

• Product innovation pipeline is a key focus, with new offerings across "Tasty Protein," "Bold Flavors," and "Familiar & Fun" themes.

Performance Highlights

For the full fiscal year 2025, General Mills reported a 2% decrease in organic net sales, with adjusted operating profit and adjusted diluted earnings per share each declining by 7%. However, organic volume remained flat year-over-year, marking a 3-point improvement from fiscal 2024. A notable achievement was the enhanced competitiveness in North America Retail (NAR) pound share during the fourth quarter, with 64% of business in the top 10 U.S. categories holding or growing share, a substantial increase from 17% in the prior quarter. Volume trends strengthened by one percentage point in the second half of the fiscal year, supported by improved media return on investment and stabilized household penetration.

Strategic Initiatives

Looking ahead to fiscal 2026, General Mills has outlined three primary objectives. The foremost goal is to reignite volume-driven organic growth in North America Retail by bolstering investments in "remarkable experiences." This includes enhancing product quality, packaging, brand communication, omnichannel execution, and value propositions. The company is also focused on accelerating growth in its North America Pet segment through an expanded portfolio and strengthening the Blue Buffalo brand. Furthermore, General Mills aims to drive efficiencies by reinvesting in growth via cost savings from its Holistic Margin Management (HMM) program and executing a global transformation initiative. The company has demonstrated strong cash generation, achieving 97% free cash flow conversion, and returned $2.5 billion to shareholders through dividends and share repurchases.

Product Innovation

Product innovation is central to General Mills' strategy for fiscal 2026, with plans for significant new product introductions across its top 10 U.S. categories, projecting a 25% increase in new product sales compared to the previous year. These innovations are categorized under three key themes: "Tasty Protein," "Bold Flavors," and "Familiar & Fun." Examples include new Pillsbury Big Cookies in flavors like S'mores and Salted Caramel, enhanced Totino's Ultimate pizza rolls, and protein-focused cereals such as Cookies & Creme Cheerios and Cheerios Protein. The company is also investing in its pet food segment with new offerings like Blue Wilderness Chicken Free Recipe and Edgard & Cooper fresh meat products.

Outlook for Fiscal 2026

General Mills' strategic investments are designed to foster sustainable growth. The company plans to increase investment in its "Remarkable Experience Framework," including a 25% rise in new product sales and doubling price/pack architecture compared to the prior year. Enhanced creative ideas with improved ROIs, driven by data-driven marketing, are also a key component. The focus on restoring volume-driven growth, expanding the pet food business, and driving efficiencies through cost savings positions the company to navigate the evolving market landscape.

Sources

• Volume trends improve as investments pay off By Investing.com, Investing.com Nigeria.