Like many packaged food companies, General Mills (NYSE: GIS) has seen its stock price crash to multi-year lows. That’s a term I don’t use lightly, but it’s fitting in this instance. The stock is down 36.7% in the last year and has fallen 40% in the last decade, compared to a 222% gain in the S&P 500 (SNPINDEX: ^GSPC).
The sell-off, paired with modest dividend increases, has pushed General Mills’ dividend yield up to 6.6%. For context, popular consumer staples dividend stocks Coca-Cola and PepsiCo yield 2.8% and 3.8%, respectively.
Will AI create the world’s first trillionaire? Our team just released a report on the one little-known company, called an “Indispensable Monopoly” providing the critical technology Nvidia and Intel both need. Continue »
Here’s why the sell-off in General Mills has gone from bad to worse, and why the value stock is a high-conviction buy now.
General Mills is forecasting a 16% to 20% decline in fiscal 2026 (ending in late May) adjusted earnings per share (EPS) — a most unwelcomed encore to its 7% adjusted EPS decline in fiscal 2025.
Inflationary pressures are eating into General Mills’ margins, and it hasn’t been able to offset those costs with volume and price increases. What’s more, its latest quarterly results don’t reflect the rise in oil prices, which is another inflationary input that further strains household budgets.
Investors are souring on consumer-facing companies that sell products people don’t need, such as discretionary goods and services. But packaged foods have been lumped into that negative sentiment because some investors no longer view frozen pizza and processed treats as being as essential as toothpaste and laundry detergent.
Fair enough. But there’s reason to believe General Mills is being unfairly punished.
General Mills has some processed brands like Totino’s, which it explicitly called out as an area of weakness on its March earnings call. But it also has a lot of brands that can thrive as consumers shift toward healthier options. Group President of North American retail and North American Pet Dana McNabb said the following on the third-quarter fiscal 2026 earnings call:
Our Nature Valley business is performing pretty well. Our proteins are doing really well, our wafers business is doing really well, and actually Fiber One is on the comeback with GLP-1 users, but it is still down. In Grain, consumers are moving toward more performance nutrition.
