General Mills Q4 2025 Prepared Remarks Earnings Report

General Mills EPS Results

• Actual EPS: $0.74
• Consensus EPS: $0.72
• Beat/Miss: Beat by +$0.02
• One Year Ago EPS: $1.01

General Mills Revenue Results

• Actual Revenue: $4.56 billion
• Expected Revenue: $4.60 billion
• Beat/Miss: Missed by -$48.60 million
• YoY Revenue Growth: -3.30%

General Mills Announcement Details

• Quarter: Q4 2025 Prepared Remarks
• Date: 6/25/2025
• Time: Before Market Opens
• Conference Call Date: Wednesday, June 25, 2025
• Conference Call Time: 7:00AM ET

General Mills (NYSE:GIS) (NYSE: GIS) is a leading global food company with a diverse portfolio spanning cereals, snacks, yogurt, frozen desserts and pet food. Established in 1866 as the Minneapolis Milling Company, it gained prominence with its Gold Medal flour brand. Over time, the company expanded through product innovation and strategic acquisitions, positioning itself as a household name in more than 100 countries.

The company’s brand roster includes iconic names such as Cheerios, Häagen-Dazs, Nature Valley, Old El Paso and Yoplait, reflecting a balanced offering across breakfast, snacks, meals and indulgent desserts. In recent years, General Mills has also built a strong presence in the pet nutrition segment through its Blue Buffalo brand, catering to growing consumer demand for premium pet foods.

General Mills operates manufacturing facilities and distribution networks across North America, Europe, Asia, Latin America and Oceania, enabling it to adapt products to local tastes and supply chains. The company invests in research and development to drive innovation in health-oriented foods, sustainability initiatives and packaging improvements, aligning with evolving consumer preferences and environmental goals.

Under the leadership of Chairman and Chief Executive Officer Jeffrey L. Harmening, General Mills emphasizes long-term growth through brand building, operational efficiency and responsible sourcing. Its management team prioritizes community engagement, supplier partnerships and commitments to sustainable agriculture, reflecting a blend of financial discipline and corporate responsibility in the global food industry.

General Mills Q4 2025 Prepared Remarks Earnings Call Transcript

Key Takeaways

• Investments in consumer value, product news and innovation drove improved volume and pound share across over 60% of priority businesses in the fourth quarter, stabilizing household penetration in North America Retail.
• Fourth quarter reported net sales fell 3% and adjusted EPS declined 27% in constant currency, driven by trade expense timing and unfavorable price mix, though results were in line with updated guidance.
• The company delivered industry-leading productivity with 5% cost savings of COGS, achieved a 97% free cash flow conversion and returned $2.5 billion to shareholders via dividends and share repurchases.
• Fiscal 2026 guidance anticipates organic net sales of down 1% to up 1% and adjusted diluted EPS down 10–15% in constant currency, reflecting investments in value and headwinds from tariffs and lower price mix.
• For fiscal 2026, General Mills will deploy its “remarkable experience” framework to restore volume growth by investing in product, packaging, messaging, omnichannel execution and value, while accelerating North America Pet expansion with launches like Love Made Fresh fresh dog food.

Presentation

[Jeff Siemon, VP - IR & Treasurer at General Mills]

Good morning. This is Jeff Seaman, Vice President of Investor Relations and Corporate Finance. Thank you for listening to General Mills' prepared remarks for our fiscal twenty twenty five fourth quarter and full year earnings. Later this morning, we will hold a live question and answer session on today's results, which you can hear via webcast on our Investor Relations website. Joining me for this morning's presentation are Jeff Harmony, our Chairman and CEO and Kofi Bruce, our CFO.

[Jeff Siemon, VP - IR & Treasurer at General Mills]

Before I hand things over to them, let me first touch on a few housekeeping items. First, on our website, you will find our press release that posted this morning, along with a copy of the presentation and a transcript of these remarks. Please note that today's remarks include forward looking statements that are based on management's current views and assumptions. The second slide in today's presentation lists several factors that could cause our future results to be different than our current estimates. And with that, I'll turn it over to Jeff.

[Jeffrey Harmening, Chairman & CEO at General Mills]

Thank you, Jeff, and good morning, everyone. Let me start with today's key messages. First and most importantly, the investments we made in second half of fiscal twenty twenty five in greater consumer value, product news and innovation have worked as we expected, driving improved volume and pound share across our portfolio in the fourth quarter. Second, our fourth quarter financial results finished in line with our expectations and our updated guidance. And third, we're clear on the job to do in fiscal twenty twenty six, which is to restore volume driven organic sales growth by investing to deliver greater remarkability in our products and packaging, our messaging, our omnichannel execution and value for our consumers.

[Jeffrey Harmening, Chairman & CEO at General Mills]

Our full year results are summarized on Slide five. Organic net sales finished down 2% and adjusted operating profit and adjusted diluted EPS were down 7% in constant currency. These results were consistent with our revised guidance reflecting the decision we made during the year to step up investment in response to more prolonged value seeking consumer behaviors and greater volatility in the operating environment. That investment helped us deliver flat organic volume for the year, which was a three point improvement on our fiscal twenty twenty four result. We entered fiscal twenty twenty five with three priorities for the year: accelerate organic sales growth, create fuel for investment and drive strong cash generation.

[Jeffrey Harmening, Chairman & CEO at General Mills]

Our results against these three priorities were mixed with challenges on the top line, yet strong performance on efficiency and cash. Let me share a few highlights. On our first priority of accelerating organic growth, our full year sales trends did not meet our expectations, driven in part by continued value seeking orientation and weaker consumer sentiment. This was particularly true in our North America Retail segment. As a result, we made important changes to adapt to the evolving consumer environment and put our business on a path back to growth.

[Jeffrey Harmening, Chairman & CEO at General Mills]

We reassessed our strategy at the midpoint of the year, pivoting our plans and making the decision to invest in greater value for consumers, narrowing price gaps and moving below price cliffs on several North America retail businesses. We believe that getting our value into the right zone would allow for our product news, innovation and marketing to resonate more clearly for consumers, leading to improved volume and household penetration. Importantly, we expected volume trends to improve first with dollars lagging until we lap the investment in price. And that's what we saw play out with a significant improvement in North America Retail's competitiveness in the fourth quarter. We held a group pound share across more than 60% of our top 10 U.

[Jeffrey Harmening, Chairman & CEO at General Mills]

S. Priority businesses including cereal, refrigerated dough, fruit snacks, hot snacks and soup, five categories where we had made specific investments in a combination of value, product news, innovation and advertising. And we stabilized household penetration across North America Retail for the first time in three years. We expect these investments to continue to pay off and stronger in our competitiveness as we move into fiscal twenty twenty six. We also drove improved competitiveness on our other three segments in fiscal twenty twenty five with North America Pet, North America Foodservice and International each holding or growing dollar share in more than 50% of the priority businesses and each representing an improvement on our fiscal twenty twenty four results.

[Jeffrey Harmening, Chairman & CEO at General Mills]

On our second priority, we delivered another strong year of industry leading productivity with holistic margin management cost savings of 5% of cost of goods sold. This strong performance helped us fund investments in Remarkability, sustain our gross margin performance and generate cash for our shareholders. In fact, we exceeded our free cash flow conversion target in fiscal twenty twenty five, achieving a 97% conversion rate. And we continue to deploy that cash in shareholder friendly ways, including making further progress on reshaping our portfolio. With the White Bridge acquisition and The U.

[Jeffrey Harmening, Chairman & CEO at General Mills]

S. And Canada yogurt divestitures, we have now turned over roughly 30% of our net sales base since 2018 And we continue to return meaningful cash to shareholders in fiscal twenty twenty five with $2,500,000,000 returned through dividends and net share repurchases. As we head into fiscal twenty twenty six, we expect the operating environment will remain volatile with consumers pressured by widespread uncertainty from tariffs, global conflicts and changing regulations. Amid this uncertainty, we expect consumers to remain cautious and continue seeking value, prioritizing their spending on benefits that matter most to them like protein, bold flavors and the comfort of familiar and fun brands and experiences. And we expect consumers won't just focus on benefits for themselves.

[Jeffrey Harmening, Chairman & CEO at General Mills]

Pet parents will continue to prioritize spending on their pets, driven by the broader macro trend toward pet humanization. With these consumer dynamics in mind, we've set three clear priorities for the year ahead: maintaining a thoughtful balance of reinvesting for long term growth and driving cost savings to support these investments. First, we plan to return North America Retail to volume growth by continuing to invest in remarkable experiences to strengthen pound share and household penetration for our brands. Second, we plan to accelerate our North America pet growth with an expanded portfolio. This means growing our core Blue Buffalo business and launching several exciting category expansion plans.

[Jeffrey Harmening, Chairman & CEO at General Mills]

And third, to help fund these investments, we'll drive efficiency to reinvest in growth. This means continuing to deliver best in class productivity and transforming how we work to free up our teams to focus on growth. Our remarkable experience framework will be key to how we deliver on our priorities this year. This framework outlines how we assess our brands across five key areas product, packaging, brand communication, omni channel execution and value to identify where we are superior to competition and where we have gaps to close in our current product offerings. Applying this consistent rigorous approach allows us to determine the type of investments required for each brand, ensuring we are tailoring the right solution for each brand's competitive context.

[Jeffrey Harmening, Chairman & CEO at General Mills]

Let me provide a few examples of how we're applying this framework in fiscal twenty twenty six across our four segments. Our team is on a multiyear journey to improve our brand remarkability and our plans for North America Retail in fiscal twenty twenty six include investment to strengthen all aspects of our Remarkable Experience framework. We have significant product news across each of our top 10 U. S. Categories compared to news in just three categories last year, and we expect to drive a 25% increase in sales from new products.

[Jeffrey Harmening, Chairman & CEO at General Mills]

Our plans include twice the amount of price deck architecture as last year, leveraging our packaging capabilities to deliver new sizes and bring more value across growing sales channels. We will support this product news with increased media investment, leveraging stronger media ROIs enabled by our data driven marketing capabilities. We'll leverage our portfolio scale to deliver more impactful in store events and we'll continue to invest in retail media to strengthen our leading share position online. And we'll invest in value this year across two thirds of our NAR portfolio, addressing price gaps and cliffs on selected product lines within our top categories. This includes continuing the investments we made in fiscal twenty twenty five in many areas and extending to targeted additional product lines in fiscal twenty twenty six, ensuring that we consistently deliver on the value consumers are seeking across our brands.

[Jeffrey Harmening, Chairman & CEO at General Mills]

As I just mentioned, NAR has relevant product news across each of our top 10 categories in fiscal twenty twenty six. This news is focused on the benefits most relevant for consumers today, protein, bold flavors and familiar and fun favorites. General Mills is uniquely suited to deliver great tasting protein at an affordable price with iconic brands our consumers know and love. Our plans in fiscal twenty twenty six include expansion of Cheerios Protein, Annie's Super Mac and Nature Valley Protein Granola as well as a new line of Nature Valley Creamy Protein Bars. On bold flavors, we're delivering exciting taste first news in fiscal twenty twenty six, including Progresso Pitmaster Soups, Totino's Ultimate Pizza and Rolls, Old El Paso Bria Tacos and renovated bold sex mix flavors.

[Jeffrey Harmening, Chairman & CEO at General Mills]

We'll also deliver on consumers' desire for familiar and fun moments meant to be enjoyed by the whole family like Pillsbury Big Cookies, new Mott's Fruit Filled Bars and Betty Crocker Soft Bake Cookies, all delivering great taste and great value. Let me briefly share a few examples of how we're leveraging our remarkable experience framework to bring improved value, innovation and core news to our biggest businesses in fiscal twenty twenty six starting with refrigerated dough. We were encouraged by Pillsbury's strong improvement in volume in the second half of fiscal twenty twenty five driven by improved value, great product news and increased media support featuring the Doughboy. We're continuing that playbook in fiscal twenty twenty six bringing consumers more value by addressing key price gaps and by advertising behind our Bakes Up Bigger news on cinnamon rolls, crescents and biscuits. And we'll build on our cookie platform's double digit retail sales growth in fiscal twenty twenty five with the launch of our new Big Cookies bringing even more indulgence through refrigerated dough case.

[Jeffrey Harmening, Chairman & CEO at General Mills]

On patinos, we drove improved volume trends in Q4 by addressing value at the shelf and investing in value oriented advertising highlighted by our 10 pizza rolls for about $1 ad that was the most shared Super Bowl commercial this year. As we look to fiscal twenty twenty six, we will continue driving value for Totino's consumers by delivering the right price and formats at the shelf, investing in remarkable advertising and building on our successful game day activation. And we have a remarkable innovation launching this year with Totino's Ultimate Rolls and Ultimate Pizza redefining the experience consumers can expect from a value pizza. Our plans on Cereal in fiscal twenty twenty six strengthen our remarkability across the category's best loved brands. We'll communicate value by highlighting for consumers that Nature Valley and Cheerios deliver great tasting protein at an affordable price.

[Jeffrey Harmening, Chairman & CEO at General Mills]

In fact, with Nature Valley Protein, Cheerios Protein and Ghost Protein, we now have a portfolio of protein cereals that generates more than $100,000,000 in annual retail sales. We will ensure we have the right sizes and price points to deliver remarkable value for consumers. We have strong core news and new brand campaigns on Cheerios, Cinnamon Toast Crunch and Lucky Charms. And we plan to lead category innovation again in fiscal twenty twenty six with compelling new products like a new cookies and cream variety of Cheerios protein. On soup, we closed fiscal twenty twenty five with Nielsen measured pounds growing 4% in Q4 and household penetration up almost a full point versus the prior year, driven by value investments, product news and innovation that delivers on what consumers want, both flavors and protein.

[Jeffrey Harmening, Chairman & CEO at General Mills]

In fiscal twenty twenty six, we'll continue to focus on value for consumers, including launching new pack sizes and formats that allow us to meet consumers in the right channels with the right packages at the right price point. We have core news on our highly successful Old El Paso soup line, bringing consumers 30% more chicken on these great tasting, bold flavored, high protein soups. And we're doubling down on both flavors with the recent launch of a new line of Progresso Pitmaster soups. Inspired by grilling culture and delivering 20 grams of great tasting protein, Pitmaster is already off to a great start in limited distribution and helping expand General Mills share in the soup category. On fruit snacks, our business was challenged in fiscal twenty twenty five by slower snacking category growth as well as increased competition from fruit flavored candy, But we drove encouraging improvement in Q4 including pound share growth by narrowing price gaps on key product lines while continuing to bring news to our differentiated portfolio.

[Jeffrey Harmening, Chairman & CEO at General Mills]

As we look to fiscal twenty twenty six, we'll maintain our focus on value by addressing value expanding our sizes and formats leveraging our price pack architecture toolkit. We'll invest in messaging, including a new campaign on our differentiated Gushers, Fruit by the Foot and Rollups brands. And we'll launch exciting new items, including All Blue Gushers, Fruit by the Foot splits and a new line of Harry Potter fruit snacks in partnership with Warner Bros. Discovery. Overall, I'm encouraged by the strength of our plans in North America Retail and I'm confident that our investment in more remarkable offerings will return this business to volume growth in fiscal twenty twenty six.

[Jeffrey Harmening, Chairman & CEO at General Mills]

Our second priority for fiscal twenty twenty six is to accelerate growth for our North America Pet business. We'll do that by continuing to build on our improving momentum on our core Blue Buffalo lines and by investing to expand into new fast growing spaces. Our plans in fiscal twenty twenty six start with strong news on our Life Protection Formula and Wilderness dog feeding lines, which are the heritage of the Blue Buffalo business. Having ensured our value is in the right zone, we're increasing investment behind ingredient superiority advertising on both LPF and Wilderness, building on the success those campaigns drove in fiscal twenty twenty five. And will expand support behind our new salmon innovation, which brings a fast growing protein option to Life Protection Formula line.

[Jeffrey Harmening, Chairman & CEO at General Mills]

And to accelerate our growth in dog feeding, we launched Edgar and Cooper in The U. S. This July through an exclusive national retail partnership with PetSmart. This super premium brand has driven outstanding growth across its European markets since we acquired it a year ago. Our U.

[Jeffrey Harmening, Chairman & CEO at General Mills]

S. Launch will maintain Ed Gurden Cooper's fresh take on pet nutrition with dry food, wet food and treat recipes made with real recognizable ingredients like fresh chicken, venison and duck combined with nutritious fruits and vegetables. The National PetSmart launch will leverage Edgerton Cooper's digital first and social led marketing approach, a proven driver of the brand's rapid growth in Europe. Shifting to cat feeding, we plan to build on our strong momentum on our core Tasteful line, which delivered mid single digit retail sales growth in fiscal twenty twenty five. Our plans in fiscal twenty twenty six include increased media investment, highlighting Tasteful's ingredient quality and taste preference versus a leading brand in the category.

[Jeffrey Harmening, Chairman & CEO at General Mills]

And we'll accelerate our growth in cat feeding with our recently acquired Tiki Cat brand, which has enjoyed strong double digit retail sales growth in pet specialty and e commerce channels in recent years. In fiscal twenty twenty six, we're focused on growing Tiki Cat through increased core news including a new Tiki Solutions sub line as well as a double digit increase in e commerce investment. To round out our Pet Acceleration Plans, you heard from us earlier this week that we are expanding into The U. S. Fresh pet food segment later this year with the national launch of Blue Buffalo's Love Made Fresh.

[Jeffrey Harmening, Chairman & CEO at General Mills]

This new line of fresh dog food adheres to Blue Buffalo's trusted True Blue nutritional philosophy and superior ingredients with fresh offerings across multiple product formats and a variety of flavorful recipes. The Love Made Fresh portfolio gives Blue Buffalo a remarkable differentiated offering in U. S. Fresh pet food, a $3,000,000,000 subcategory today and one which we project will grow to $10,000,000,000 in the next ten years. Our Love Made Fresh refrigerator products are designed to be perfect companions to Blue Buffalo's portfolio of dry dog food or a standalone solution.

[Jeffrey Harmening, Chairman & CEO at General Mills]

In fact, with this launch, Buffalo will be the largest U. S. Pet brand to offer solutions across dry, wet and fresh feeding. And with more than 80% of fresh food usage occasions involving a mix of fresh food and kibble, we think the combined Blue Buffalo portfolio will be well positioned to deliver remarkable feeding solution that capture the whole bowl. We're planning for significant investment in fiscal twenty twenty six behind this launch, including strong media support to drive trial and awareness and we've already seen significant early retail customer acceptance.

[Jeffrey Harmening, Chairman & CEO at General Mills]

We'll plan to share more details on Love Made Fresh products, messaging and distribution as we get closer to the launch this fall. Moving now to our North America Foodservice business. We'll leverage our category leadership in fiscal twenty twenty six to continue driving breakfast growth in K-twelve schools with our regulation ready portfolio and commitment to nutrition. We'll lean in with remarkable innovation across the biggest categories in K-twelve, while continuing our share momentum on our important cereal business. We'll also expand our frozen baked goods leadership across foodservice channels by accelerating bread growth and bringing new innovation like our new Pillsbury Blondie Bars.

[Jeffrey Harmening, Chairman & CEO at General Mills]

And international, our team is focused on delivering remarkable experiences accelerating our growth in fiscal twenty twenty six on our biggest global platforms. We have significant acceleration plans this year on Haagen Dazs behind core flavor news and expansion of our Haagen Dazs stick bars. This includes remarkable product renovation and relaunch of our European stick bar business as well as increased investment behind our stick bar business in China that delivers a superior product at a remarkable value for the local market. And on Old El Paso, we'll build on momentum from fiscal twenty twenty five with increased investment and product news across the portfolio. Our fiscal twenty twenty six plans include higher media support behind our Make Some Noise campaign and innovation that delivers solutions to win with smaller households and will amplify this product news with double the amount of in store partnership activations throughout the year.

[Jeffrey Harmening, Chairman & CEO at General Mills]

To help fund these compelling growth plans, we are working aggressively to drive efficiency throughout our cost structure. As always, this starts with holistic margin management, our industry leading productivity program. We have good visibility to delivering another year of 5% cost savings in fiscal twenty twenty six, which is in line with our strong performance in fiscal twenty twenty four and 2025 and higher than our 4% long term trend. And we recently launched a global transformation initiative designed to further accelerate our growth. This initiative is focused on streamlining our end to end business processes and identifying new ways of working that match today's evolving business environment.

[Jeffrey Harmening, Chairman & CEO at General Mills]

We look to deploy new tools, technologies and operating models to enable greater agility throughout the organization. By optimizing how work gets done, our teams will be able to spend more time focused on driving growth. In addition to streamlining how we work, we expect this initiative to generate $100,000,000 in cost savings, which we plan to reinvest in growth. Having outlined our priorities and plans for returning to growth in fiscal twenty twenty six, let me turn it over to Kofi to go into more details on our fiscal twenty twenty five results and share our guidance for fiscal twenty twenty six.

[Kofi Bruce, CFO at General Mills]

Thanks, Jeff, and hello, everyone. Our fourth quarter financial results are summarized on Slide 27. The quarter finished in line with our expectations with reported net sales of $4,600,000,000 down 3% and organic net sales also down 3% from the prior year. As we previewed on last quarter's earnings call, our Q4 organic net sales and price mix results included two points of headwind from trade expense timing related to additions to our trade plans made in previous quarters. As Jeff mentioned, we delivered organic volume roughly in line with last year and we improved our pound competitiveness with 63% of our priority businesses holding or growing pound share in the fourth quarter, representing an acceleration versus the first three quarters.

[Kofi Bruce, CFO at General Mills]

Adjusted operating profit of $622,000,000 was down 22% in constant currency, in line with our forecast last quarter. This included a 13 headwind from unfavorable trade expense timing as well as increased commercial investments. Adjusted diluted earnings per share totaled $0.74 in the quarter and were down 27% in constant currency. Turning to the components of total company net sales growth in the quarter, organic net sales decreased 3% in the quarter driven by unfavorable price mix, including the trade expense timing headwind I mentioned earlier. Organic pound volume was flat in the quarter.

[Kofi Bruce, CFO at General Mills]

Both foreign exchange and the net impact of acquisitions and divestitures were not material to net sales in Q4. Shifting to segment performance, our North America Retail results are summarized on Slide 29. As a reminder, these results reflect the closure of our Canada Yogurt divestiture in late January, while The U. S. Yogurt divestiture is expected to close later this month.

[Kofi Bruce, CFO at General Mills]

Fourth quarter organic net sales for North America Retail were down 7%. This lagged our Nielsen measured U. S. Retail sales by approximately three points, driven primarily by trade expense timing headwinds. Our investments in value, product news and brand support resulted in stronger competitiveness in Q4 as we expected with pound share stable or growing on 64% of our top 10 U.

[Kofi Bruce, CFO at General Mills]

S. Categories including cereal, refrigerated dough, hot snacks, fruit snacks and soup. On the bottom line, fourth quarter North America Retail Segment operating profit was down 29% in constant currency, driven primarily by unfavorable price mix, including a 17 profit headwind from trade expense timing as well as input cost inflation and lower volume, partially offset by cost savings. For the full year, organic net sales were 3% below a year ago results, driven by lower volume and unfavorable price mix. These results lag Nielsen measured retail sales by roughly one point.

[Kofi Bruce, CFO at General Mills]

On the bottom line, constant currency segment operating profit in Gnar was down 11%, driven primarily by lower volume and higher input costs. For our North America Pet segment, fourth quarter organic net sales were up 3% driven by higher volume. Our net sales outpaced all channel retail sales by roughly three points in the quarter driven primarily by an increase in retailer inventory ahead of first quarter in market activations. Including the Whitebridge acquisition, reported net sales in the quarter were up double digits for wet food and treats and up mid single digits for dry food. On the bottom line, fourth quarter North America Pet segment operating profit was down 3% in constant currency, driven by higher input costs and increased media investment, partially offset by favorable price mix and higher volume.

[Kofi Bruce, CFO at General Mills]

For the full year, the Pet segment posted modest organic net sales growth with results rounding to flat. Positive organic volume was partially offset by unfavorable price mix. Our competitiveness in pet food improved in fiscal twenty twenty five with dollar share growth on dog feeding, which represented 60% of our pet U. S. Retail sales.

[Kofi Bruce, CFO at General Mills]

Full year pet segment operating profit was up 3% in constant currency, driven primarily by cost savings, partially offset by a double digit increase in media investment and unfavorable price mix. We expect to accelerate full year organic net sales growth in North America Pet in fiscal twenty twenty six. However, first quarter growth is expected to be pressured by the unwind of the Q4 retailer inventory build. North America Foodservice organic net sales were down one percent in the quarter driven by declines on bakery flour and breads. On the bottom line, fourth quarter North America Foodservice segment operating profit was up 5% in constant currency driven by cost savings, partially offset by input cost inflation.

[Kofi Bruce, CFO at General Mills]

For the full year, organic net sales grew two percent driven by higher volume and positive price mix despite a one point headwind from index pricing on bakery flour. We continued to compete well within away from home channels, holding a growing market share in 71% of our measured business led by strong performance in K-twelve schools and healthcare. Constant currency segment operating profit was 13% for the full year, driven primarily by cost savings and favorable price mix, partially offset by input cost inflation and higher SG and A expenses. Moving to Slide '32, fourth quarter organic net sales for our International segment were up 9%, driven by strong growth in Brazil and our distributor markets. Fourth quarter segment operating profit totaled $34,000,000 compared to $22,000,000 a year ago, driven by positive price mix partially offset by higher input costs and higher SG and A expenses.

[Kofi Bruce, CFO at General Mills]

For the full year, the International segment posted modest organic net sales growth with the results rounding to flat. Net sales growth in our distributor markets and Europe and Australia were partially offset by declines in China. We were pleased with our strong competitiveness with 59% of our priority businesses growing or holding share for the full year. Full year segment operating profit totaled $96,000,000 compared to $125,000,000 a year ago, driven primarily by input cost inflation, higher SG and A expenses and unfavorable price mix, partially offset by cost savings and higher volume. For our joint ventures, fourth quarter Cereal Partners Worldwide net sales were down 6% in constant currency driven primarily by declines in Latin America and Europe.

[Kofi Bruce, CFO at General Mills]

Haagen Dazs Japan net sales were up 1% in constant currency, reflecting strong core renovation. Full year combined after tax earnings from joint ventures totaled $58,000,000 compared to $85,000,000 a year ago, driven by non cash asset impairment charges related to supply chain simplification at Cereal Partners Worldwide. Moving on to other noteworthy Q4 income statement items. Adjusted unallocated corporate expenses decreased $7,000,000 in the quarter. Fourth quarter net interest expense increased $17,000,000 driven by higher average long term debt balances largely related to White Bridge acquisition financing.

[Kofi Bruce, CFO at General Mills]

The fourth quarter adjusted effective tax rate was 19.2% compared to 20% a year ago, driven primarily by certain non recurring discrete benefits in fiscal twenty twenty five. And average diluted shares outstanding in the quarter were down 4% to $550,000,000 reflecting our continued net share repurchase activity. Our fiscal twenty twenty five results are summarized on Slide 35. Net sales of $19,500,000,000 were down 2% as reported and on an organic basis, driven by unfavorable price mix. Adjusted operating profit of $3,400,000,000 was down 7% in constant currency driven by lower net price realization and unfavorable product mix.

[Kofi Bruce, CFO at General Mills]

Adjusted diluted earnings per share totaled $4.21 and were down 7% in constant currency driven primarily by lower adjusted operating profit and higher net interest expense, partially offset by lower net shares outstanding. Turning to margin results. Our fiscal twenty twenty five adjusted gross margin decreased 30 basis points to 34.5% driven by input cost inflation, unfavorable price mix and volume deleverage partially offset by cost savings. Our fiscal twenty twenty five adjusted operating profit margin decreased 90 basis points to 17.2%, driven by lower adjusted gross margin and higher SG and A expenses as a percent of net sales. Moving to cash flow.

[Kofi Bruce, CFO at General Mills]

Fiscal twenty twenty five operating cash flow declined to $2,900,000,000 driven primarily by lower net earnings excluding the impact of the divestiture gain in fiscal twenty twenty five and changes in restructuring, transformation, impairment and other exit costs. Capital investments totaled $625,000,000 or 3% of net sales for the year and we returned $2,500,000,000 in cash to shareholders in fiscal twenty twenty five through dividends and net share repurchases. As we turn to fiscal twenty twenty six, this is admittedly a complicated year with many moving pieces. We've outlined some of the most important financial assumptions on Slide 38. On the top line, we expect dollar growth in our categories to be below our long term expectations and generally in line with fiscal twenty twenty five trends, reflecting less benefit from price mix amid a continued challenging consumer backdrop.

[Kofi Bruce, CFO at General Mills]

We expect our organic sales growth to improve in fiscal twenty twenty six behind stronger competitiveness in response to our investments in Remarkability with contributions from volume outpacing price mix. Moving down the P and L, we expect a number of headwinds and tailwinds to impact our operating profit growth in fiscal twenty twenty six. In terms of headwinds, we expect input cost inflation of roughly 3% of cost of goods sold before the impact of tariffs. We expect the gross impact of newly enacted tariff represents an additional risk of 1% to 2% of cost of goods sold. Though we are working aggressively to mitigate the impacts through product reformulation, ingredient substitution and potential strategic revenue management actions.

[Kofi Bruce, CFO at General Mills]

Our full year guidance includes our forecast for tariff impact net of our mitigation efforts. As Jeff noted, we're planning for meaningful investments in value, news and innovation in fiscal twenty twenty six including a significant investment in our national launch into fresh pet food. In terms of M and A, as we've previously communicated, we expect the net impact of The U. S. And Canada Yogurt divestitures and the North American White Bridge Pet Brands acquisition will reduce fiscal twenty twenty six operating profit growth by approximately five points.

[Kofi Bruce, CFO at General Mills]

And we expect a reset of incentive compensation to be a three point headwind to operating profit. In terms of profit tailwinds, we expect to deliver another year of strong cost savings of 5% of cost goods sold. We expect to generate $100,000,000 in savings from our global transformation initiative and other related efficiency efforts and will have the benefit of a fifty third week in fiscal twenty twenty six. Moving below operating profit, we expect net interest expense to increase to approximately $575,000,000 Our adjusted effective tax rate is expected to be roughly in line with fiscal twenty twenty five at approximately 21% and we expect to reduce our net share count by roughly 3% for the full year, including the impact of using a portion of our divestiture proceeds for share buybacks. With these assumptions in mind, Slide 39 summarizes our outlook for fiscal twenty twenty six.

[Kofi Bruce, CFO at General Mills]

Organic net sales are expected to range between down 1% and up 1%. Adjusted operating profit and adjusted diluted earnings per share are expected to be down 10% to 15% in constant currency. And we expect free cash flow conversion to be at least 95% of adjusted after tax earnings. Note that we expect significant variability in our quarterly results in fiscal twenty twenty six, with organic net sales and adjusted operating profit declining more than our annual outlook in the first half of the year, driven by the phasing of our price investments and trade expense timing in fiscal twenty twenty five. Our fourth quarter is expected to benefit as we lap more significant investment and unfavorable trade timing in Q4 of fiscal twenty twenty five and it will have the added benefit of a fifty third week.

[Kofi Bruce, CFO at General Mills]

Looking specifically to the first quarter of fiscal twenty twenty six, our organic net sales and adjusted operating profit growth rates are expected to be similar to the results we posted in the fourth quarter of fiscal twenty twenty five. As we shared earlier this month, the regulatory review for our U. S. Yogurt divestiture is complete. This guidance assumes the transaction closes at the June, which is in line with our current expectations.

[Kofi Bruce, CFO at General Mills]

With that, let me turn it back to Jeff for some closing remarks.

[Jeffrey Harmening, Chairman & CEO at General Mills]

Thanks, Sophie. Let me wrap up with a few closing thoughts. As I said upfront, we are clear on the job to do in fiscal twenty twenty six, which is to restore volume driven organic sales growth. We'll do that by investing in consumer value, product news, innovation and brand building, guided by our remarkable experience framework. These investments are significant and we're keeping a strong focus on ROI, building on that improved volume momentum we delivered in the second half of fiscal twenty twenty five.

[Jeffrey Harmening, Chairman & CEO at General Mills]

We know that restoring sustainable, profitable organic sales growth is the key to long term value creation and we look forward to advancing our plans, delivering on our priorities and driving strong shareholder returns in fiscal twenty twenty six.

Participants

Executives

• Jeff Siemon, VP - IR & Treasurer
• Jeffrey Harmening, Chairman & CEO
• Kofi Bruce, CFO