Investors clearly didn't want too many servings of food industry mainstay General Mills (GIS -5.00%) on Wednesday. Following the release of a disappointing set of earnings, they assertively traded out of the company's stock to leave it with a 5% decline on the day. That wasn't very tasty when compared to the S&P 500 (^GSPC -0.00%), which essentially flatlined that trading session.
Fourth-quarter falls
For its fourth quarter of fiscal 2025, General Mills posted net sales of $4.6 billion, representing a decrease of 3% on a year-over-year basis. Worse, net income under generally accepted accounting principles (GAAP) standards shrank by 47% to $294 million. That bottom line looked slightly better on a per-share, non-GAAP (adjusted) basis; it fell a comparatively modest 27% to $0.74.
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On average, analysts tracking General Mills stock were expecting that $4.6 billion on the top line. However, they were modeling a slightly lower adjusted net income per share of $0.71.
The drops in key fundamentals were attributed to several factors, including the divestiture of the company's Canadian yogurt business, reduced sales volume, and what it described as "unfavorable net price realization."
On a brighter note, General Mills did well in its pet food segment. Sales in the quarter for such products rose by 12% year over year to $675 million, although much of this was due to a recent acquisition (WhiteBridge Pet Brands).
More to come?
General Mills also proffered guidance for the entirety of its current fiscal year (2026). It's expecting net sales to range from an increase of 1% over fiscal 2025 to a decline at the same percentage rate. Adjusted net income, on the other hand, is forecast to drop 10% to 15% in constant-currency terms across the same stretch.
None of these results were exactly confidence-building. The pet segment is the one bright spot for General Mills just now, and much of its growth was due to the company's continuing acquisition spree. I don't see many compelling reasons to own the stock at the moment.
