MINNEAPOLIS — General Mills Inc. got off to an expected slow start in fiscal 2025, posting declines in earnings, operating profit and sales for the first quarter.

In the quarter ended Aug. 25, net income fell 14% to $579.9 million, equal to $1.03 per share on the common stock, from $673.5 million, or $1.14 per share, a year earlier. Adjusted earnings per share in constant currency were $1.07, down from $1.09 in the fiscal 2024 quarter. Analysts, on average, had forecast adjusted EPS of $1.06.

Net sales in the first quarter dipped 1% to $4.85 billion from $4.9 billion a year ago, with organic net sales also decreasing 1%, Minneapolis-based General Mills said. Operating income fell 11% to $831.5 million but was down 4% to $865.3 million in constant currency.

“As we communicated on our fiscal 2024 fourth-quarter earnings call, we expected our Q1 results to be below our full-year targets, driven by challenging net sales and margin comparisons,” said Jeffrey Harmening, chairman and chief executive officer. “Our results finished broadly in line with our expectations, with sequential improvement from our Q4 trends leading to pound volume finishing flat to last year and organic net sales down 1%. On the bottom line, adjusted operating profit was down 4%, and adjusted diluted earnings per share were down 2%, each in constant currency.

“Looking ahead, we have more work to do to achieve our goals, and we expect to drive further improvement in our competitiveness and our top- and bottom-line growth for the remainder of the year.”

Rationale behind yogurt divestiture

In the call, Harmening provided more color on General Mills’ $2.1 billion sale of its US and Canadian yogurt businesses to French companies Lactalis Group and Sodiaal. The deals, announced last week, are expected to close in calendar 2025.

“These transactions represent another significant step forward for General Mills as we advance our ‘Accelerate’ strategy and our portfolio-reshaping ambitions,” he said. “Because of the drag that yogurt has been on our net sales and profitability over time, this deal enhances the underlying growth profile and margin structure of our remaining portfolio. In addition, it allows us to sharpen our focus on our global platforms and local gem brands, where we have better opportunities to drive profitable growth.”

The North American yogurt business — including the Yoplait, Liberté, Go-Gurt, Oui, Mountain High, and :ratio brands — generated net sales of $1.5 billion in fiscal 2024 but had a margin structure “meaningfully below the company average,” said Harmening.

“I’m confident that Lactalis and Sodiaal are the right homes for these businesses,” he said, adding, “I’m equally confident that this transaction will create value for General Mills’ shareholders, leaving our company in a stronger position to drive consistent, profitable growth over the long term.”

Harmening reiterated that, with the deal’s completion, General Mills will have turned over almost 30% of its net sales base since fiscal 2018, “including entering the fast-growing premium pet foods category, adding to our away-from-home portfolio and divesting yogurt, European dough and large parts of our main meal and side dish businesses in the US. In total, this work has increased the underlying growth exposure of our portfolio by more than a full point.”

Mixed results across segments

General Mills’ core North America Retail business tallied fiscal 2025 first-quarter net sales of $3.02 billion, down 2% on both a reported and an organic basis. Segment operating profit fell 7% to $745.7 million, with the decrease at 6% in constant currency. The company said net sales declined by 5% for the US Snacks unit and by 3% for US Morning Foods but were flat for US Meals & Baking Solutions.

“In North America Retail, our market share trends in the first quarter were improved over fiscal ’24 in 6 of our top 10 US categories,” Harmening said. “We’ll look to continue that improvement in Q2 through scaled cross-category merchandising events, improved customer service levels and strong seasonal activations on Pillsbury refrigerated dough, Progresso soup and Betty Crocker desserts.”

First-quarter net sales were flat year over year at $536.2 million for North America Foodservice and at $717 million for International. The North America Pet business saw net sales decline 1% to $576.1 million. Operating income rose by 7% to $119.4 million for Pet and by 21% to $71.5 million for Foodservice but dropped by 58% to $20.9 million for International.

General Mills maintained its previous fiscal 2025 guidance. Organic net sales are expected to range between flat and up 1%, with adjusted operating profit down 2% to flat in constant currency. Adjusted EPS is pegged at down 1% to up 1% in constant currency.