Profits are falling, consumption is falling: General Mills is in trouble
Declining revenue, melting profits and disappointed investors characterize the 2025 business year of General Mills, one of the largest food companies in the United States. According to the company, the decline in American consumption is primarily due to economic uncertainty and Donald Trump’s tariff policy, which has particularly reduced sales of snack products and frozen baked goods, writes VG.
The company not only reported weaker results compared to last year, but also said that it would consider a 10-15 percent decline in operating profit by 2026 acceptable – while analysts’ expectations were “only” a 4.8 percent decrease. General Mills’ brands – including Cheerios, Haagen Dazs, Pillsbury and Cocoa Puffs – are solidly present in the market, but declining demand for premium products, acquisition costs and unsuccessful new product launches (e.g., the new versions of the Blue Buffalo dog food brand) have had a strong impact on the results.
The company’s after-tax profit fell 8 percent to $2.29 billion, while sales fell 2 percent to $19.48 billion. Although the sale of its North American yogurt business is generating some extra revenue, the overall picture is still not favorable. However, the company is confident that it will be able to generate additional sales thanks to an extra 53rd week in the 2026 fiscal year.
It is a small consolation for investors that the company’s board of directors recommended a dividend of 61 cents per share – one cent more than in the previous quarter – and the company continues to proudly claim that it has been paying dividends to its shareholders for 126 consecutive years.
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