General Mills’ profit falls 47% as weary shoppers continue to look for bargains

It’s starting to feel like déjà vu at General Mills: Start the year with bold growth ambitions, end up short and vow to try again next year.

Maybe some Tobasco Bugles, protein-boosted Cheerios and fresh pet food will break the cycle.

“I’m kind of looking for improvement across the board,” General Mills CEO Jeff Harmening told analysts Wednesday, “and I think we can get there because our marketing is better, our new products are better, our value is going to be in the right place.”

The Golden Valley-based food giant behind Nature Valley and Cinnamon Toast Crunch saw profits fall nearly in half this spring, the end of its fiscal year. Sales continued to slide as many inflation-battered consumers are still avoiding name-brand foods to save money.

The fourth quarter results are on top of a years-long sales decline for General Mills.

So the company plans to spend money to make money, investing heavily in marketing, new product launches and deals to send shoppers home with more Old El Paso taco kits, Pillsbury dough and cereal.

“We have some really good new product news and really good innovation on our core, the best since I’ve been the CEO,” Harmening said in an interview. “But people need to find out about it. We’re going to spend a lot of time and energy on that.”

For the next 12 months, the expectation is either slight growth or a small decline in sales. It could come down to how fast consumers respond to the company’s messaging, said Chief Financial Officer Kofi Bruce.

“Consumer sentiment and their response could be a little slower. It could take a little bit longer for the pace of improvement,” he said, but there’s also the chance to over-perform: “We’re already coming out of this quarter with momentum.”

Harmening said a focus on protein, bold flavors and nostalgia is part of the company’s plan to “give consumers what they want.”

The launch of Blue Buffalo fresh pet food nationwide later this year is expected to build on recent progress growing pet food sales and may help the company’s overall fortunes.

“We’re really confident that Blue Buffalo has a right to win here,” Dana McNabb, head of North America retail and pet, told analysts. “We have had really strong reception from retailers.”

General Mills is navigating higher costs and uncertainty around tariffs and uneasy consumers; the company expects to save $100 million from its global transformation announced last month. The announcement came with a federal filing that said costs associated with the transformation would include severance, signaling layoffs.

Harmening did not elaborate on the timing of any restructuring actions when asked Wednesday.

“We’ll look to deploy new tools, technologies and operating models to enable greater agility throughout the organization,” he said. “By optimizing how work gets done, our teams will be able to spend more time focused on driving growth.”

The sale of Yoplait is also expected to close in the coming days.

General Mills reported a $294 million profit in the fourth fiscal quarter that ended in May, down 47% from the year before. Adjusting earnings per share of 74 cents beat analyst expectations of 71 cents per share. Sales dropped 3% to $4.6 billion.

The full fiscal year saw revenue dip 2% to $19.5 billion and profits fall 8%, to $2.3 billion, compared to last year.

Sales are expected to range from down 1% to up 1% over the next 12 months, while profits will remain pressured.