Management’s
Discussion
and
Analysis
Financial
Condition
and
Results
Operations (MD&A) in Item 7 of this report for a description of our segments.
offer a variety of human and pet food
products that provide great taste, nutrition, convenience, and
value for consumers around the
world. Our business is focused on the following large, global
categories:
snacks, including grain, fruit and savory snacks, nutrition bars, and
frozen hot snacks;
ready-to-eat cereal;
convenient meals, including meal kits, ethnic meals, pizza, soup, side dish mixes,
frozen breakfast, and frozen entrees;
wholesome natural pet food;
refrigerated and frozen dough;
baking mixes and ingredients;
yogurt; and
super-premium ice cream.
Our Cereal Partners Worldwide
(CPW) joint venture with Nestlé
S.A. (Nestlé) competes in the
ready-to-eat cereal category in markets
outside North
America, and
our Häagen-Dazs
Japan, Inc.
(HDJ) joint
venture
competes in
the super-premium
ice cream
category
Japan. For net sales contributed
by each class of similar
products, please see Note 17
to the Consolidated Financial
Statements in Item
8 of this report.
The terms
“General Mills,”
“Company,”
“registrant,” “we,”
“us,” and
“our” mean
General Mills, Inc.
and all
subsidiaries included
the Consolidated Financial Statements in Item 8 of this report unless the context
indicates otherwise.
Certain terms used throughout this report are defined in a glossary in Item 8 of
this report.
Customers
Our
primary
customers
are
grocery
stores,
mass
merchandisers,
membership
stores,
natural
food
chains,
drug,
dollar
and
discount
chains, e-commerce
retailers, commercial
and noncommercial
foodservice distributors
and operators,
restaurants, convenience
stores,
and
pet
specialty
stores.
generally
sell
these
customers
through
our
direct
sales
force.
use
broker
and
distribution
arrangements for certain products and to serve certain types
of customers and certain markets. For further information
on our customer
credit
and
product
return practices,
please
refer
to Note
to the
Consolidated
Financial Statements
Item 8
of this
report.
During
fiscal 2025, Walmart
Inc. and its affiliates (Walmart)
accounted for 22 percent of our consolidated
net sales and 31 percent of net sales
of our
North America
Retail segment.
No other
customer accounted
for 10
percent or
more of
our consolidated
net sales.
For further
information on significant customers, please refer to Note 8 to the Consolidated
Financial Statements in Item 8 of this report.
Competition
The
human
and
pet
food
categories
are
highly
competitive,
with
numerous
manufacturers
varying
sizes in
the
United
States and
throughout the
world. The categories
in which
we participate
also are
very competitive.
Our principal
competitors in
these categories
are manufacturers, as
well as retailers with
their own branded
products. Competitors market
and sell their products
through brick-and-
mortar stores
and e-commerce.
All our
principal competitors
have substantial
financial, marketing,
and other
resources. Competition
our
product
categories
based
product
innovation,
product
quality,
price,
brand
recognition
and
loyalty,
effectiveness
marketing,
promotional
activity,
convenient
ordering
and
delivery
the consumer,
and the
ability
identify
and
satisfy
consumer
preferences.
Our
principal
strategies
for
competing
each
our
segments
include
unique
consumer
insights,
effective
customer
relationships, superior
product quality,
innovative advertising,
product promotion,
product innovation
aligned with consumers’
needs,
an efficient
supply chain, and
price. In most
product categories, we
compete not only
with other widely
advertised, branded
products,
but also
with regional
brands and
with generic
and private
label products
that are
generally sold
at lower
prices. Internationally,
compete with both multi-national and local manufacturers, and each
country includes a unique group of competitors.
Raw materials, ingredients, and packaging
The
principal
raw
materials
that
use
are
grains
(wheat,
oats,
and
corn),
dairy
products,
meat,
vegetable
oils,
sugar,
vegetables,
fruits,
nuts,
and
other
agricultural
products.
also
use
substantial
quantities
carton
board,
corrugated,
plastic,
and
metal
packaging
materials,
operating
supplies,
and
energy.
Most
these
inputs
for
our
domestic
and
Canadian
operations
are
purchased
from suppliers
in the
United States. In
our other
international operations,
inputs that
are not locally
available in
adequate supply
may
be imported
from other
countries. The
cost of
these inputs
may fluctuate
widely due
to external
conditions such
as weather,
climate
change,
product
scarcity,
limited
sources
supply,
commodity
market
fluctuations,
currency
fluctuations,
trade
tariffs,
pandemics,
war,
and
changes
governmental
agricultural
and
energy
policies
and
regulations.
believe
that
will
able
obtain
adequate supply
of needed
inputs. Occasionally
and where
possible, we
make advance
purchases of
items significant
to our
business
to ensure
continuity of
operations. Our
objective is
to procure
materials meeting
both our quality
standards and
our production
needs
at price levels
that allow a targeted
profit margin. Since
these inputs generally
represent the largest
variable cost in manufacturing
our
products, to the
extent possible, we
often manage the
risk associated with
adverse price movements
for some inputs
using a variety
risk
management
strategies.
also
have
grain
merchandising
operation
that
provides
efficient
access
and
more
informed
knowledge of, various commodity
markets, principally wheat and oats.
This operation holds physical inventories
that are carried at net
realizable value and uses derivatives to manage its net inventory position and minimize
its market exposures.
TRADEMARKS AND PATENTS
Our
products
are
marketed
under
variety
valuable
trademarks.
Some
the
more
important
trademarks
used
our
global
operations
(set
forth
italics
this
report)
include
Annie’s
Betty
Crocker
Bisquick
Blue
Buffalo
Bugles
Cascadian
Farm
Cheerios
Chex
Cinnamon
Toast
Crunch
Cocoa Puffs
Cookie Crisp
Dunkaroos,
Edgard
& Cooper,
Fiber One
Fruit by
the Foot
Fruit
Gushers
Fruit
Roll-Ups
Gardetto’s
Gold
Medal
Golden
Grahams
Häagen-Dazs
Kitano
Kix
Lärabar
Latina
Lucky
Charms
Muir Glen
Nature
Valley
Nudges, Oatmeal
Crisp
Old El
Paso
Pillsbury
Progresso
Tastefuls
Tiki
Pets
Total
Totino’s
Trix
True
Chews,
True
Solutions,
Wanchai
Ferry
Wheaties
Wilderness
and
Yoki
protect
these
trademarks
appropriate
through registrations in the
United States and other jurisdictions.
Depending on the jurisdiction,
trademarks are generally valid
as long
as they are in use
or their registrations are properly
maintained and they have
not been found to have
become generic. Registrations of
trademarks can also generally be renewed indefinitely for
as long as the trademarks are in use.
Some
our
products
are
marketed
under
combination
with
trademarks
that
have
been
licensed
from
others
for
both
long-
standing
products
Reese’s
Puffs
for
cereal,
Green
Giant
for vegetables
in certain
countries, and
Yoplait
and related
brands for
fresh dairy in the United States), and shorter term promotional products (e.g., fruit
snacks sold under various third party equities).
Our cereal
trademarks
are licensed
to CPW
and
may be
used in
association
with the
Nestlé
trademark.
Nestlé licenses
certain
of its
trademarks
CPW,
including
the
Nestlé
and
Uncle
Toby’s
trademarks.
The
Häagen-Dazs
trademark
licensed
royalty-free
and
exclusively
Nestlé
and
authorized
sublicensees
for
ice
cream
and
other
frozen dessert
products
the
United
States and
Canada.
The
Häagen-Dazs
trademark is
also licensed
to HDJ
in Japan.
The
Pillsbury
brand and
the
Pillsbury Doughboy
character are
subject
exclusive,
royalty-free
license
that
was
granted
third
party
and
its
successors
the
shelf-stable
baking
categories
the
United States and under limited circumstances in Canada and Mexico.
continue
our
focus
developing
and
marketing
innovative,
proprietary
products,
many
which
use
proprietary
expertise,
recipes and formulations,
and are patent protected. We
consider the collective rights under our various patents, which
expire from time
to time, a valuable asset,
but we do not
believe that our businesses are
materially dependent upon
any single patent or group
of related
patents.
SEASONALITY
general,
demand
for
our
products
evenly
balanced
throughout
the
year.
However,
within
our
North
America
Retail
segment
demand
for
refrigerated
dough,
frozen
baked
goods,
and
baking
products
stronger
the
fourth
calendar
quarter.
Demand
for
Progresso
soup is higher
during the
fall and winter
months. Within
our International
segment, demand
for
Häagen-Dazs
ice cream is
higher during
the summer
months and
demand for
baking mix
increases during
winter months.
Due to
the offsetting
impact of
these
demand
trends,
as well
as the
different
seasons
the
northern
and
southern
hemispheres,
our
International
segment’s
net
sales are
generally evenly balanced throughout the year.
QUALITY AND SAFETY REGULATION
The
manufacture
and
sale
human
and
pet
food
products
highly
regulated.
the
United
States,
our
activities
are
subject
regulation by
various federal
government agencies,
including the
Food and
Drug Administration,
Department of
Agriculture, Federal
Trade
Commission,
Department
Commerce,
Occupational
Safety
and
Health
Administration,
and
Environmental
Protection
Agency,
well
various
federal,
state,
and
local
agencies
relating
the
production,
packaging,
labelling,
marketing,
storage,
distribution, quality,
and safety of food
and pet products and
the health and safety
of our employees.
Our business is also
regulated by
similar agencies outside of the United States.
ENVIRONMENTAL
MATTERS
May
were
involved
with
two
response
actions
associated
with
the
alleged
threatened
release
hazardous
substances or wastes located in Minneapolis, Minnesota and Moonachie, New
Jersey.
Our
operations
are
subject
the
Clean
Air
Act,
Clean
Water
Act,
Resource
Conservation
and
Recovery
Act,
Comprehensive
Environmental
Response,
Compensation,
and
Liability
Act,
and
the
Federal
Insecticide,
Fungicide,
and
Rodenticide
Act,
and
all
similar state, local, and foreign environmental laws and regulations applicable
to the jurisdictions in which we operate.
Based on current
facts and circumstances,
we believe that
neither the
results of our
environmental proceedings
nor our compliance
general
with
environmental
laws
regulations
will
have
material
adverse
effect
upon
our
capital
expenditures,
earnings,
competitive position.
HUMAN CAPITAL MANAGEMENT
Recruiting, developing, engaging, and protecting our
workforce is critical to executing our strategy and achieving
business success. As
May
had
approximately
employees
around
the
globe,
with
approximately
the
and
approximately 16,000
located in our
markets outside
of the U.S.
Our workforce
is divided
between approximately
13,000 employees
dedicated to the production of our products and approximately 20,
000 non-production employees.
The
efficient
production
high-quality
products
and
successful
execution
our
strategy
requires
talented,
skilled,
and
engaged
team of employees. We
work to equip our employees with
critical skills and expand their contributions
over time by providing a range
of training and career
development opportunities, including
hands-on experiences via
challenging work assignments and
job rotations,
coaching
and mentoring
opportunities, and
training programs.
foster employee
engagement and
commitment, we
follow a
robust
process
listen
employees,
take
action,
and
measure
our
progress
with
on-going
employee
conversations,
transparent
communications, and employee engagement surveys.
believe that
fostering a
culture of
belonging is
the right
thing to
do for
our employees
and business.
It strengthens
our ability
recruit talent and provides all
of our employees with an
environment where they have
an opportunity to thrive and
succeed. Champion
Belonging
Company
value –
helps bring
to life
our
culture of
belonging through
respecting and
including
all voices,
ideas, and
perspectives.
embed
our
culture
belonging
into
our
day-to-day
ways
working
through
number
programs
foster
discussion, build empathy,
and increase understanding.
are
committed
maintaining
safe
and
secure
workplace
for
our
employees.
set
specific
safety
standards
identify
and
manage critical risks.
use global safety
management systems and
employee training to
ensure consistent implementation
of safety
protocols and
accurate measurement
and tracking of
incidents. To
provide a safe
and secure working
environment for our
employees,
we prohibit workplace
discrimination, and
we do not
tolerate abusive conduct
or harassment. Our
attention to the
health and safety
our workforce extends to the workers and communities in our supply chain.
We believe that respect
for human rights is fundamental to
our strategy and to our commitment to ethical business conduct.
INFORMATION ABOUT
OUR EXECUTIVE OFFICERS
The section below provides information regarding our executive officers
as of June 25, 2025.
Kofi A. Bruce
, age 55, is Chief Financial
Officer. Mr.
Bruce joined General Mills in 2009 as
Vice President,
Treasurer after serving
variety
senior
management
positions
with
Ecolab
and
Ford
Motor
Company.
served
Treasurer
until
when
was
named Vice
President, Finance for
Yoplait.
Mr. Bruce
reassumed his role
as Vice
President, Treasurer
from 2012 until
2014 when he
was named
Vice
President, Finance
for Convenience
Stores &
Foodservice. He
was named
Vice
President, Controller
Vice
President, Financial Operations in September 2019, and to his present position
in February 2020.
Ricardo
Fernandez
age
Segment
President,
International.
Fernandez
joined
General
Mills
Associate
Marketing Manager and held various marketing roles of increasing
responsibility until being named Vice
President, Marketing, Frozen
Frontier
Vice
President,
CPW
Marketing
President,
Latin
America
and
President,
Morning
Foods
January 2020. He was named to his present position in December 2023.
Paul J. Gallagher
age
57, is Chief
Supply Chain Officer.
Gallagher joined General
Mills in April
2019 as Vice
President, North
America Supply Chain from Diageo plc. He began
his career at Diageo where he spent 25 years serving in a variety
of leadership roles
in manufacturing,
procurement, planning,
customer service,
and engineering
before becoming
President, North
America Supply
from
2013 to March 2019. He was named to his present position in July 2021.
Jeffrey
L. Harmening
, age
Chairman of
the Board
and Chief
Executive Officer.
Harmening joined
General Mills
and
served
various
marketing
roles
the
Betty
Crocker,
Yoplait,
and
Big
cereal
divisions.
was
named
Vice
President,
Marketing
for
CPW
and
Vice
President
the
Big
cereal
division
was
promoted
Senior
Vice
President
for
the
Big
cereal
division.
Harmening
was
appointed
Senior
Vice
President,
Chief
Executive
Officer
CPW
Harmening returned from CPW
in 2014 and was
named Executive Vice
President, Chief Operating Officer,
U.S. Retail. He
became
President,
Chief
Operating
Officer
was named
Chief
Executive
Officer
and
Chairman
of the
Board
2018. Mr. Harmening
is a director of The Toro Company.
Elizabeth A. Mascolo
, age 50, is
Segment President, North
America Pet.
Ms. Mascolo joined
General Mills in
2002 and held various
marketing roles
in Cereals,
Meals, and
Snacks before
serving as
Global Marketing
Director for
CPW from
2014 through
Mascolo
was named
Business
Unit Director
for
Cheerios &
Strategic
Revenue
Management
in July
Vice
President,
Business
Unit Director,
Pillsbury,
in April 2020;
and President, North
America Blue Buffalo,
in February 2023.
She was named
to her present
position in March 2025.
Dana M.
McNabb
age 49,
is Group
President, North
America Retail
and North
America Pet.
Ms. McNabb
joined General
Mills in
1999 and
held a
variety of
marketing roles
in Cereal,
Snacks, Meals,
and New
Products before
becoming Vice
President, Marketing
for
CPW
and
Vice
President,
Marketing
for
the
Circle
Champions
Business
Unit
She
became
President,
Cereal Operating
Unit in 2016,
Group President, Europe
& Australia in
January 2020, Chief
Strategy & Growth
Officer in July
Group President, North America Retail in January 2024, and was named to
her present position in June 2025.
Jaime
Montemayor
age
Chief
Digital
and
Technology
Officer.
spent
years
PepsiCo,
Inc.,
serving
roles
increasing
responsibility,
including
most
recently
Senior
Vice
President
and
Chief
Information
Officer
PepsiCo’s
Americas
Foods segment
from 2013
to 2015, and
Senior Vice
President and
Chief Information
Officer,
Digital Innovation,
Data and Analytics,
PepsiCo from
Montemayor served
as Chief
Technology
Officer of
7-Eleven Inc.
He assumed
his present
role in February 2020 after founding and operating a digital technology
consulting company from 2017 until January 2020.
Jon
Nudi
age
was
Group
President,
North
America
Pet,
International,
and
North
America
Foodservice
from
January
through his
retirement in
June 2025.
Nudi joined
General Mills
Sales Representative
and held
a variety
of roles
Consumer
Foods Sales.
moved
into marketing
roles
the Meals
division
and
was elected
Vice
President
Nudi
was
named
Vice
President;
President,
Snacks,
Senior
Vice
President;
President,
Europe/Australasia
Senior
Vice President; President, U.S.
Retail in 2016
and Group President, North America Retail in 2017.
Mark A. Pallot
age 52,
is Vice
President, Chief
Accounting Officer.
Pallot joined
General Mills in
2007 and
served as
Director,
Financial
Reporting
until
when
he was
named
Vice
President,
Assistant
Controller.
was elected
his
present
position
February
Prior
joining
General
Mills,
Pallot
held
accounting
and
financial
reporting
positions
Residential
Capital,
LLC, Metris, Inc., CIT Group Inc., and Ernst & Young,
LLP.
Asheesh Saksena
, age 61,
is Chief Strategy
and Growth Officer.
Saksena joined General
Mills in August
Prior to joining
General
Mills,
Saksena
served
Chief
Growth
Officer
Gap
Inc.
from
January
March
served
Senior
Advisor to
the Chief Executive
Officer of
Best Buy Co.,
Inc. from August
2020 to November
2020; President, Best
Buy Health, Best
Buy Co., Inc.
from 2018 to
August 2020; Chief
Strategic Growth
Officer,
Best Buy Co.,
Inc. from
and Executive Vice
President, Chief Strategy Officer,
Cox Communications, a wholly owned subsidiary of Cox Enterprises,
Inc., from 2011 to 2016.
Lanette Shaffer Werner
, age 54, is Chief Innovation, Technical
and Quality Officer.
Ms. Shaffer Werner
joined General Mills in 1995
and held various R&D roles in Frozen Desserts, Pillsbury,
and Baking before serving as Director of One Global
Dairy and Sr. Director
for One Global Cereal. In July 2021, Ms. Shaffer Werner
was named as Vice President, Innovation,
Technical and Quality,
U.S. Meals
& Baking Solutions. She was named to her present position in June 2023.
Pankaj Sharma
age 52, is Segment
President, North America Foodservice.
Mr. Sharma
joined General Mills in
2014 and served as
Marketing
Director until
2017, when
he was
named Vice
President,
Marketing,
Europe &
Australia.
He was
promoted to
President,
Yogurt
May
and
President,
Meals
Baking
Solutions
July
was
named
his
present
position
February 2024.
Karen Wilson
Thissen
, age
General Counsel
and Secretary.
Ms. Wilson
Thissen joined
General Mills
in June
Prior to
joining
General
Mills, she
spent
17 years
at Ameriprise
Financial,
Inc.,
serving in
roles of
increasing
responsibility,
including
most
recently as Executive Vice
President and General Counsel
from 2017 to June
2022, and Executive Vice
President and Deputy General
Counsel from 2014
Before joining
Ameriprise Financial, Inc.,
she was a partner
at the law
firm of Faegre
Drinker (formerly
Faegre & Benson LLP).
Jacqueline
Williams-Roll
age
Chief
Human
Resources
Officer.
this
capacity,
she
also
has
responsibility
for
Corporate
Communications.
Williams-Roll
joined
General
Mills
She
held
human
resources
leadership
roles
Supply
Chain,
Finance, Marketing,
and Organization
Effectiveness and
worked a
large part
of her
career on
businesses outside
of the United
States.
She
was
named
Vice
President,
Human
Resources,
International
and
then
promoted
Senior
Vice
President,
Human
Resources
Operations
She
was
named
her
present
position
Prior
joining
General
Mills,
she
held
sales
and
management roles with Jenny Craig International.
WEBSITE ACCESS
Our
website
https://www.generalmills.com.
make
available,
free
charge
the
“Investors”
portion
this
website,
annual
reports
Form
quarterly
reports
Form
current
reports
Form
and
amendments
those
reports
filed
furnished pursuant to Section 13(a)
or 15(d) of the Securities Exchange
Act of 1934 (1934 Act) as soon
as reasonably practicable after
electronically
file
such
material
with,
furnish
the
Securities
and
Exchange
Commission
(SEC).
All
such
filings
are
available
on the
SEC’s
website
at https://www.sec.gov.
Reports
of beneficial
ownership filed
pursuant
to Section
the 1934
Act are also available on our website.
ITEM 1A - Risk Factors
Our
business
subject
various
risks
and
uncertainties.
Any
the
risks
described
below
could
materially,
adversely
affect
our
business, financial condition, and results of operations.
Business and Industry Risks
The
categories
which
participate
are
very
competitive,
and
are
not
able
compete
effectively,
our
results
operations could be adversely
affected.
The
human
and
pet
food
categories
which
participate
are
very
competitive.
Our principal
competitors
these
categories
are
manufacturers,
well
retailers
with
their
own
branded
and
private
label
products.
Competitors
market
and
sell
their
products
through
brick-and-mortar
stores
and
e-commerce.
All
our
principal
competitors
have
substantial
financial,
marketing,
and
other
resources.
most
product
categories,
compete
not
only
with
other
widely
advertised
branded
products,
but
also
with
regional
brands
and
with
generic
and
private
label
products
that
are generally
sold
lower prices.
Competition
our
product
categories
based on
product
innovation, product
quality,
price,
brand recognition
and loyalty,
effectiveness
of marketing,
promotional
activity,
convenient
ordering
and
delivery
the
consumer,
and
the
ability
identify
and
satisfy
consumer
preferences.
our
large
competitors
were
seek
advantage
through
pricing
promotional
changes,
could
choose
the
same,
which
could
adversely affect
our margins
and profitability.
did not
do the
same, our
revenues and
market share
could be
adversely affected.
Our market share
and revenue growth
could also be
adversely impacted if
we are not
successful in introducing
innovative products
response
changing
consumer
demands
new product
introductions
of our
competitors.
are unable
to build
and
sustain
brand
equity
offering
recognizably
superior
product
quality,
may
unable
maintain
premium
pricing
over
generic
and
private label products.
We may be unable to maintain our profit
margins in the face of a consolidating retail environment.
There has
been significant
consolidation in
the grocery industry,
resulting in
customers with increased
purchasing power.
In addition,
large
retail
customers
may
seek
use
their
position
improve
their
profitability
through
improved
efficiency,
lower
pricing,
increased
reliance
their
own
brand
name
products,
increased
emphasis
generic
and
other
economy
brands,
and
increased
promotional
programs.
are
unable
to use
our
scale, marketing
expertise,
product
innovation,
knowledge
of consumers’
needs,
and category
leadership positions
to respond
to these
demands, our
profitability and
volume growth
could be
negatively impacted.
addition, the loss
of any large
customer could
adversely affect our
sales and profits.
In fiscal 2025,
Walmart
accounted for 22
percent
of our
consolidated net
sales and
31 percent
of net
sales of
our North
America Retail
segment.
For more
information on
significant
customers, please see Note 8 to the Consolidated Financial Statements in Item 8 of this
report.
Price
changes
for
the
commodities
depend
for
raw
materials,
packaging,
and
energy
may
adversely
affect
our
profitability.
The
principal
raw
materials
that
use
are
commodities
that
experience
price
volatility
caused
external
conditions
such
weather,
climate
change,
product
scarcity,
limited
sources
supply,
commodity
market
fluctuations,
currency
fluctuations,
trade
tariffs
(including
recent
tariffs
imposed
threatened
imposed
the
United
States
China,
Canada,
Mexico,
and
other
countries and any retaliatory
actions taken by such
countries), pandemics, war
(including sanctions imposed
on Russia for its
invasion
of Ukraine),
and changes in
governmental agricultural
and energy
policies and regulations.
Commodity prices
have become, and
may
continue
more volatile.
Commodity price
changes may
result in
unexpected increases
in raw
material, packaging,
energy,
and
transportation costs. If we
are unable to increase
productivity to offset
these increased costs or
increase our prices, we
may experience
reduced margins
and profitability.
do not
fully hedge
against changes
in commodity
prices, and
the risk
management procedures
that we do use may not always work as we intend.
Concerns with the safety and quality of our products could cause consumers
avoid certain products or ingredients.
could
adversely
affected
consumers
our
principal
markets
lose
confidence
the
safety
and
quality
certain
our
products
ingredients.
Adverse
publicity
about
these
types
concerns,
whether
not
valid,
may
discourage
consumers
from
buying our products or cause production and delivery disruptions.
may be
unable to
anticipate changes
in consumer
preferences and
trends,
which may
result in
decreased demand
for our
products.
Our
success
depends
part
our
ability
anticipate
the
tastes,
eating
habits
(including
the
impact
weight
loss
drugs),
and
purchasing
behaviors
consumers
and
offer
products
that
appeal
their
preferences
channels
where
they
shop.
Consumer
preferences
and category-level
consumption
may change
from time
to time
and can
be affected
number of
different
trends and
other factors. If we fail
to anticipate, identify or react to
these changes and trends, such as
adapting to emerging
e-commerce channels,
introduce new
and improved
products on
a timely
basis, we
may experience
reduced demand
for our
products, which
would in
turn
cause
our
revenues
and
profitability
suffer.
Similarly,
demand
for
our
products
could
affected
consumer
concerns
regarding
the
health
effects
ingredients
such
sodium,
genetically
modified
organisms,
sugar
and
sugar
alternatives,
color
additives,
preservatives,
processed
wheat
and
other
ingredients,
grain-free
legume-rich
pet
food,
other
product
ingredients
attributes.
We may be unable to grow
our market share or add products that are
in faster
growing and more profitable categories.
The
food
industry’s
growth
potential
constrained
population
growth.
Our
success
depends
part
our
ability
grow
our
business faster than
populations are growing
in the markets
that we serve.
One way to
achieve that growth
is to enhance
our portfolio
by adding innovative
new products in faster
growing and more
profitable categories. Our future
results will also depend
on our ability
increase
market
share
our
existing
product
categories.
not
succeed
developing
innovative
products
for
new
and
existing categories, our growth and profitability could be adversely
affected.
Our results may be negatively impacted if consumers do not maintain
their favorable perception of our brands.
Maintaining and continually
enhancing the value
of our many
iconic brands is critical
to the success of
our business. The value
of our
brands
based
large
part
the
degree
which
consumers
react
and
respond
positively
these
brands.
Brand
value
could
diminish
significantly
due
number
factors,
including
consumer
perception
that
have
acted
irresponsible
manner,
adverse publicity
about our
products, our
failure to
maintain the
quality of
our products,
concerns or
perceptions about
the nutrition
profile and
health effects
of ingredients
or substances
(including the
processing thereof)
in our
products or
packaging, the
failure of
our products to
deliver consistently positive
consumer experiences, concerns
about food safety,
or our products
becoming unavailable
to consumers. Consumer demand for our products
may also be impacted by changes in the level
of advertising or promotional support.
The
use
social
and
digital
media
consumers,
and
third
parties
increases
the
speed
and
extent
that
information
misinformation
and
opinions
can
shared.
Negative
posts
comments
about
our
brands,
our
products
social
digital
media could
seriously damage
our brands
and reputation.
do not
maintain the
favorable perception
of our
brands, our
business
results could be negatively impacted.
Operating Risks
are
not
efficient
our
production,
our
profitability
could
suffer
result
the
highly
competitive
environment
which we operate.
Our future success and
earnings growth depend in
part on our ability to
be efficient in the
production and manufacture of
our products
highly
competitive
markets.
Gaining
additional
efficiencies
may
become
more
difficult
over
time.
Our
failure
reduce
costs
through
productivity
gains
eliminating
redundant
costs
resulting
from
acquisitions
divestitures
could
adversely
affect
our
profitability
and
weaken
our
competitive
position.
Many
productivity
initiatives
involve
complex
reorganization
manufacturing
facilities
and
production
lines.
Such
manufacturing
realignment
may
result
the
interruption
production,
which
may
negatively
impact product
volume and
margins. We
periodically engage
in restructuring,
transformation, and
cost savings
initiatives designed
increase our
efficiency and
reduce expenses. If
we are unable
to execute
those initiatives as
planned, we
may not realize
all or any
the anticipated benefits, which could adversely affect our business and
results of operations.
Disruption of our supply chain could adversely affect our business.
Our
ability
make,
move,
and
sell
products
critical
our
success.
Damage
disruption
raw
material
supplies
our
manufacturing
distribution
capabilities
due
weather,
climate
change,
natural
disaster,
fire,
terrorism,
cyber-attack,
pandemics,
war,
governmental
restrictions
mandates,
labor
shortages,
strikes,
import/export
restrictions,
other
factors
could
impair
our
ability to
manufacture or
sell our
products. Many
of our
product lines
are manufactured
single location
or sourced
from a
single
supplier.
The
failure
third
parties
which
rely,
including
those
third
parties
who
supply
our
ingredients,
packaging,
capital
equipment
and
other
necessary
operating
materials,
contract
manufacturers,
commercial
transport,
distributors,
contractors,
and
external business partners, to meet
their obligations to us, or significant
disruptions in their ability to do
so, may negatively impact our
operations. Our
suppliers’ policies
and practices
can damage
our reputation
and the quality
and safety
of our
products. Disputes
with
significant suppliers,
including disputes regarding
pricing or performance,
could adversely affect
our ability to
supply products to
our
customers and
could materially
and adversely
affect our
sales, financial
condition, and
results of
operations. Failure
to take
adequate
steps
mitigate
the
likelihood
potential
impact
such
events,
effectively
manage
such
events
they
occur,
particularly
when a
product is
sourced from
a single
location or
supplier,
could adversely
affect our
business and
results of
operations, as
well as
require additional resources to restore our supply chain.
Short term or
sustained increases in
consumer demand at
our retail customers
may exceed our
production capacity or
otherwise strain
our supply chain. Our failure to meet the demand for our products could
adversely affect our business and results of operations.
Our international operations are subject to political and economic
risks.
In fiscal
percent of
our consolidated
net sales
were generated
outside of
the United
States. We
are accordingly
subject to
number of risks relating to doing business internationally,
any of which could significantly harm our business. These risks include:
political and economic instability;
exchange controls and currency exchange rates;
tariffs on products and
ingredients that we import and export
(including recent tariffs imposed
or threatened to be imposed by
the United States on China, Canada, Mexico, and other countries and any retaliatory
actions taken by such countries);
political sentiment impacting
global trade, including
the willingness of consumers
outside the United States
to purchase from
United States corporations or to purchase products manufactured outside the country
of sale;
nationalization or government control of operations;
compliance with anti-corruption regulations;
foreign tax treaties and policies; and
restriction on the transfer of funds to and from foreign countries, including
potentially negative tax consequences.
Our financial performance
on a U.S. dollar
denominated basis is subject
to fluctuations in currency
exchange rates. These fluctuations
could cause material
variations in our results
of operations. Our principal
exposures are to the
Australian dollar,
Brazilian real, British
pound sterling,
Canadian dollar,
Chinese renminbi,
euro, Japanese
yen, Mexican
peso, and
Swiss franc.
From time
to time,
we enter
into
agreements
that
are
intended
reduce
the
effects
our
exposure
currency
fluctuations,
but
these
agreements
may
not
effective in significantly reducing our exposure.
strengthening
the
dollar
relative
other
currencies
the
countries
which
operate
would
negatively
affect
our
reported results of operations and financial results due to currency translation losses and
currency transaction losses.
Our business operations could be disrupted if our information technology
systems fail to perform adequately or are breached.
Information
technology
serves
important
role
the
efficient
and
effective
operation
our
business.
rely
information
technology networks
and systems, including
the internet, to
process, transmit,
and store electronic
information to
manage a variety
business processes and
to comply with
regulatory,
legal, and tax requirements.
Our information technology
systems and infrastructure
are
critical
effectively
manage
our
key
business
processes
including
digital
marketing,
order
entry
and
fulfillment,
supply
chain
management,
finance,
administration,
and
other
business
processes.
These
technologies
enable
internal
and
external
communication
among
our
locations, employees,
suppliers,
customers,
and others
and
include the
receipt and
storage of
personal information
about
our employees,
consumers, and
proprietary business
information. Our
information technology
systems, some
of which
are dependent
on services
provided
by third
parties, may
be vulnerable
to damage,
interruption,
or shutdown
due to
any number
of causes
such as
catastrophic events,
natural disasters, fires,
power outages, systems
failures, telecommunications
failures, security breaches,
computer
viruses, hackers, employee error
or malfeasance, and other
causes. Increased cyber-security threats
pose a potential risk to
the security
and
viability
our
information
technology
systems,
well
the
confidentiality,
integrity,
and
availability
the
data
stored
those systems. The
failure of our
information technology
systems to perform
as we anticipate
could disrupt
our business and
result in
transaction
errors,
processing
inefficiencies,
data
loss,
legal
claims
proceedings,
regulatory
penalties,
and
the
loss
sales
and
customers. Any
interruption of
our information
technology systems
could have
operational, reputational,
legal, and
financial impacts
that may have a material adverse effect on our business.
Our failure to successfully integrate acquisitions into our
existing operations could adversely affect our financial results.
From
time
time,
evaluate
potential
acquisitions
joint
ventures
that
would
further
our
strategic
objectives.
Our
success
depends, in part,
upon our ability
to integrate acquired
and existing operations.
If we are
unable to successfully
integrate acquisitions,
our financial
results could
suffer.
Additional potential
risks associated
with acquisitions
include
additional debt
leverage, the
loss of
key
employees
and
customers
the
acquired
business,
the
assumption
unknown
liabilities,
the
inherent
risk
associated
with
entering a geographic area or line of business in which we have
no or limited prior experience, failure to achieve anticipated
synergies,
and the impairment of goodwill or other acquisition-related intangible assets.
Legal and Regulatory Risks
our
products
become
adulterated,
misbranded,
mislabeled,
might
need
recall
those
items
and
may
experience
product liability claims if
consumers or their pets are injured.
We may need
to recall some of our products if they become adulterated,
misbranded, or mislabeled. A widespread product recall could
result in
significant losses
due to
the costs
recall, the
destruction of
product inventory,
and lost
sales due
to the
unavailability of
product for a period of time.
We could
also suffer losses from a
significant product liability judgment
against us. A significant product
recall or
product liability
case could
also result
in adverse
publicity,
damage to
our reputation,
and a
loss of
consumer confidence
our products, which could have an adverse effect on our business results and the
value of our brands.
New regulations or regulatory-based claims could adversely
affect our business.
Our facilities and
products are subject
to many laws and
regulations administered by
the United States Department
of Agriculture, the
Federal Food and Drug
Administration, the Occupational
Safety and Health Administration,
and other federal, state, local,
and foreign
governmental agencies
relating to
the production,
packaging, labelling,
storage, distribution,
quality,
and safety
of food
products and
the
health
and
safety
our
employees.
Our
failure
comply
with
such
laws
and
regulations
could
subject
lawsuits,
administrative
penalties,
and civil
remedies,
including fines,
injunctions,
and recalls
of our
products.
advertise our
products and
could be
the target
of claims
relating to
alleged false
or deceptive
advertising
under federal,
state, and
foreign laws
and regulations.
may
also
subject
new
laws
regulations
restricting
the
marketing
sale
our
products
because
ingredients
substances (including
the processing
thereof)
in our
products or
product packaging.
These limitations
may
require that
we highlight
perceived concerns
about a
product or
product packaging,
warn consumers
to avoid
consumption of
certain ingredients
or substances
present in our products,
restrict the audience
to whom products are
marketed or sold, limit
the locations in which
our products may be
available, or discontinue
the use of
certain ingredients or
packaging. Changes
in laws or
regulations that impose
additional regulatory
requirements
could
increase our
cost of
doing business,
restrict our
actions,
and reduce
consumption
of our
products, causing
our results of operations to be adversely affected.
are
subject
various
federal,
state,
local,
and
foreign
environmental
laws
and
regulations.
Our
failure
comply
with
environmental laws and regulations could subject us
to lawsuits, administrative penalties, and civil remedies.
We are currently
party to
a variety of
environmental remediation obligations.
Due to regulatory
complexities, uncertainties inherent
in litigation, and
the risk of
unidentified contaminants
on current and
former properties of
ours, the potential
exists for remediation,
liability,
indemnification, and
compliance
costs
differ
from
our
estimates.
cannot
guarantee
that
our
costs
relation
these
matters,
compliance
with
environmental
laws
general,
will
not
exceed
our
established
liabilities
otherwise
have
adverse
effect
our
business
and
results of operations.
Climate change and other sustainability matters could adversely affect
our business.
There is
growing concern
that carbon
dioxide and
other greenhouse
gases in
the earth’s
atmosphere may
have an
adverse impact
global temperatures, weather patterns, and the frequency
and severity of extreme weather and natural disasters.
If such climate change
has a negative effect on agricultural productivity,
we may experience decreased availability and higher pricing for certain commodities
that are necessary
for our
products. Increased
frequency or
severity of
extreme weather
could also impair
our production
capabilities,
disrupt our
supply chain,
impact demand
for our
products, and
increase our
insurance and
other operating
costs.
Increasing concern
over
climate
change
other
sustainability
issues
also
may
adversely
impact
demand
for
our
products
due
changes
consumer
preferences or
negative consumer
reaction to
our commitments
and actions
to address
these issues.
may also
become subject
additional
legal
and
regulatory
requirements
relating
climate
change
other
sustainability
issues,
including
greenhouse
gas
emission
regulations
carbon
taxes),
energy
policies,
sustainability
initiatives
single-use
plastic
limits),
and
disclosure
obligations.
If additional legal
and regulatory
requirements are
enacted and
are more aggressive
than the sustainability
measures that
we are currently
undertaking to reduce
our emissions and
improve our energy
efficiency and
other sustainability goals,
chose
to take actions to achieve more aggressive goals, we may experience significant
increases in our costs of operations.
have announced goals
and commitments to
reduce our carbon footprint.
If we fail to
achieve or improperly
report on our progress
toward
achieving
our
carbon
emissions
reduction
goals
and
commitments,
then
the
resulting
negative
publicity
could
harm
our
reputation and adversely affect demand for our products.
Financial and Economic Risks
Volatility
the
market
value
derivatives
use
manage
exposures
fluctuations
commodity
prices
may
cause
volatility in our gross margins and net earnings.
utilize derivatives
to manage
price risk
for some
of our
principal ingredient
and energy
costs, including
grains (oats,
wheat, and
corn), oils (principally soybean),
dairy products, natural gas, and diesel
fuel. Changes in the values
of these derivatives are recorded
earnings, which
may result
in volatility
in both
gross margin
and net
earnings. These
gains and
losses are
reported in
cost of
sales in
our Consolidated
Statements of Earnings
and in unallocated
corporate items outside
our segment operating
results until we
utilize the
underlying input in our manufacturing
process, at which time the gains
and losses are reclassified to segment
operating profit. We
also
record our grain inventories at net realizable value. We
may experience volatile earnings as a result of these accounting treatments.
Economic downturns could limit consumer demand for our products.
The
willingness
consumers
purchase
our
products
depends
part
local
economic
conditions.
periods
economic
uncertainty,
consumers
may
purchase
more
generic,
private
label,
and
other
economy
brands
and
may
forego
certain
purchases
altogether.
In those circumstances,
we could experience
a reduction in sales
of higher margin
products or a shift
in our product mix
lower margin
offerings.
In addition,
result of
economic conditions
or competitive
actions, we
may be
unable to
raise our
prices
sufficiently to
protect margins.
Consumers may
also reduce the
amount of food
that they consume
away from home
at customers that
purchase products
from our
North America
Foodservice segment.
Any of
these events
could have
an adverse
effect on
our results
operations.
have
substantial
amount
indebtedness,
which
could
limit
financing
and
other
options
and
some
cases
adversely
affect our ability to pay dividends.
May
had
total
debt
and
noncontrolling
interests
billion.
The
agreements
under
which
have
issued
indebtedness
do not
prevent us
from
incurring
additional unsecured
indebtedness
in the
future.
Our level
of indebtedness
may
limit
our:
ability to
obtain additional
financing for
working capital,
capital expenditures,
or general
corporate purposes,
particularly if
the ratings assigned to our debt securities by rating organizations
were revised downward; and
flexibility to
adjust to
changing business
and market
conditions and
may make
us more
vulnerable to
a downturn
in general
economic conditions.
There are
various financial
covenants and
other restrictions
in our
debt instruments
and noncontrolling
interests. If
we fail to
comply
with any of
these requirements, the
related indebtedness,
and other unrelated
indebtedness, could
become due and
payable prior
to its
stated maturity and our ability to obtain additional or alternative financing
may also be adversely affected.
Our ability
to make
scheduled payments
to refinance
our debt
and other
obligations will
depend on
our operating
and financial
performance,
which
turn
subject
prevailing
economic
conditions
and
financial,
business,
and
other
factors
beyond
our
control.
depend
on stable,
liquid
and
well-functioning
capital and
credit markets
to fund
our operations.
Our financial
performance,
our
credit ratings,
interest rates,
the stability
of financial
institutions with
which we
partner, and
the liquidity
of the
overall global
capital
markets could affect our access to, and the availability,
terms and conditions, and cost of capital.
Volatility
in the
securities markets,
interest
rates,
and other
factors could
substantially
increase
our defined
benefit
pension,
other postretirement benefit, and postemployment
benefit costs.
sponsor
a number
of defined
benefit plans
for employees
in the
United
States, Canada,
and various
foreign
locations, including
defined
benefit
pension,
retiree
health
and
welfare,
severance,
and
other
postemployment
plans.
Our
major
defined
benefit
pension
plans are
funded with
trust assets
invested in
a globally
diversified portfolio
of securities
and other
investments. Changes
in interest
rates, mortality
rates, health
care costs,
early
retirement rates,
investment
returns, and
the market
value of
plan
assets can
affect
the
funded status
of our
defined benefit
plans and
cause volatility
in the
net periodic
benefit cost
and future
funding requirements
of the
plans.
significant
increase
our
obligations
future
funding
requirements
could
have
negative
impact
our
results
operations and cash flows from operations.
change
the
assumptions
regarding
the
future
performance
our
businesses
different
weighted-average
cost
capital
used
value
our
reporting
units
our
indefinite-lived
intangible
assets
could
negatively
affect
our
consolidated
results of operations and net worth.
As of May
we had $22.4
billion of
goodwill and
indefinite-lived intangible
assets. Goodwill for
each of
our reporting
units
is tested
for impairment
annually and
whenever events
or changes
in circumstances
indicate that
impairment may
have occurred.
compare
the
carrying
value
the
reporting
unit,
including
goodwill,
the
fair
value
the
reporting
unit.
the
fair
value
the
reporting unit
is less than
the carrying
value of
the reporting
unit, including
goodwill, impairment
has occurred.
Our estimates
of fair
value are determined
based on a
discounted cash
flow model. Growth
rates for sales
and profits are
determined using inputs
from our
long-range planning process. We
also make estimates of discount rates, perpetuity growth assumptions,
market comparables, and other
factors.
current
expectations
for
growth
rates
for
sales
and
profits
are
not
met,
other
market
factors
and
macroeconomic
conditions were to change,
then our reporting units could
become significantly impaired. While
we currently believe that
our goodwill
is not impaired, different assumptions regarding
the future performance of our businesses could result in significant impairment
losses.
evaluate
the
useful
lives
our
intangible
assets,
primarily
intangible
assets
associated
with
the
Blue
Buffalo
Pillsbury
Totino’s
Progresso
Old El Paso
Tiki Pets
Annie’s
Nudges
Edgard &
Cooper
and
Häagen-Dazs
brands, to
determine if
they
are finite
or indefinite-lived.
Reaching a
determination on
useful
life requires
significant judgments
and assumptions
regarding
the
future
effects
obsolescence,
demand,
competition,
other
economic
factors
(such
the
stability
the
industry,
known
technological
advances,
legislative
action
that
results
uncertain
changing
regulatory
environment,
and
expected
changes
distribution channels), the level of required maintenance expenditures,
and the expected lives of other related groups of assets.
Our
indefinite-lived
intangible
assets
are
also
tested
for
impairment
annually
and
whenever
events
changes
circumstances
indicate
that impairment
may have
occurred.
Our estimate
of the
fair value
of the
brands is
based on
a discounted
cash flow
model
using inputs
including projected
revenues from
our long-range
plan, assumed
royalty rates which
could be
payable if we
did not
own
the brands, and
a discount rate.
If current expectations
for growth
rates for sales
and margins
are not met,
or other market
factors and
macroeconomic
conditions
were
change,
then
our
indefinite-lived
intangible
assets
could
become
significantly
impaired.
Our
Progresso
Nudges
Uncle Toby’s
True
Chews
, and
Kitano
brands had
risk of
decreasing
coverage
and we
continue
to monitor
these businesses.
For further information
on goodwill and intangible
assets, please refer to
Note 6 to the Consolidated
Financial Statements in
Item 8 of
this report.
ITEM 1B - Unresolved Staff Comments
None.
ITEM 1C - Cybersecurity
Cybersecurity Risk Management and Strategy
Our
enterprise
risk
management
framework
considers
cybersecurity
risk
alongside
other
company
risks,
part of
our
overall
risk
assessment
process.
leverage
industry-leading
framework,
the
National
Institute
of Standards
and
Technology
Cybersecurity
Framework, and assess our maturity against that framework in partnership
with an independent firm on an annual basis.
assess
and
manage
our
cybersecurity
risk
using
various
mechanisms,
starting
with
threat
intelligence,
which
provides
necessary viewpoint to help
us identify trends, understand
how certain attacks may affect
us, and prepare for
evolutions in threat actor
behavior
that
may
require
changes
our
security
posture.
drive
readiness,
perform
periodic
adversarial
testing
our
cybersecurity
posture through
penetration
testing, using
both internal
resources
and
external expertise,
as well
as table-top
and
“red
team” exercises to understand where processes or controls may be insufficient
based on adversarial techniques.
Our
internal
audit team performs
regular assessments
of our
program and
selected components.
also
leverage
retrospectives from
previous
cybersecurity
incidents
understand
weaknesses
and
improve
our
security
controls.
assess
our
critical
suppliers
regularly for cybersecurity risk
and prescribe remediation
activities when necessary.
As a part of
a collaborative defense approach,
regularly participate in multiple cybersecurity forums to share threat
intelligence, best practices, and points of caution.
train
our
employees
through
annual
security
training,
phishing
simulations,
and
regular
communications
about
timely
cybersecurity
topics
and
threats.
have
documented
and
well-tested
cybersecurity
incident
response
plan
that
guides
responding,
containing,
and
eradicating
cybersecurity
threats
that
have
breached
our
preventative
controls.
regularly
practice
technical recovery,
and we maintain cybersecurity insurance.
Cybersecurity Governance
Our
cybersecurity
program
led by
our
Chief
Digital
and
Technology
Officer
(CDTO)
and
Vice
President
Cyber
Security
Enterprise
Architecture.
Our Vice
President
of Cyber
Security &
Enterprise Architecture,
who
reports to
our CDTO,
has a
master’s
degree
information
assurance,
and
more
than
years
experience
working
this
field,
including
more
than
years
with
General Mills. He has strategic and operational responsibility
for all aspects of the Company’s
cybersecurity program, from how cyber
risks are identified, to how General Mills detects, responds, contains, and recovers
from cybersecurity threats.
The
Audit
Committee
our
Board
Directors
provides
oversight
for
our
cybersecurity
program.
The
Audit
Committee
receives
regular
updates
from
management
the
effectiveness
our
cybersecurity
program,
reviews
plans
how
management
will
continually
mature
the
program,
and
receives
updates
special
topics
that
help
the
committee
provide
effective
oversight
the
program.
Our
Security &
Resilience Governance
Committee provides
oversight and
governance
for the
Company’s
cybersecurity risk
through
quarterly
meetings,
monthly
dashboard
reporting
management-aligned
program
performance
targets,
and
as-needed
updates
cybersecurity
incidents.
This
committee
composed
our
Chief
Financial
Officer,
General
Counsel,
Chief
Human
Resources
Officer, Chief Supply Chain Officer,
and CDTO.
Like
most
companies,
our
systems are
continually
subjected
cybersecurity
threats.
Although
have
not
experienced
material
cybersecurity breach,
we cannot guarantee
that we will
not experience
a cyber threat
or incident in
the future.
Additional information
on cybersecurity
risks we
face is included
in Item 1A
of this report,
which should
be read
in conjunction
with the
information in
this
Item 1C.
ITEM 2 - Properties
own
our
principal
executive
offices
and
main research
facilities,
which
are
located
in the
Minneapolis,
Minnesota
metropolitan
area.
operate numerous
manufacturing facilities
and maintain many
sales and administrative
offices, warehouses,
and distribution
centers around the world.
As of May 25,
2025, we operated
42 facilities for
the production of
a wide variety
of food products.
Of these facilities,
28 are located
in the United States, 3 in Latin America and Mexico, 5 in Europe/Australia,
4 in the Greater China region, 1 leased in Canada, and 1 in
the
Asia/Middle
East/Africa
Region.
The
following
list
the
locations
our
principal
production
facilities,
which
primarily
support the segment noted:
North America Retail
• Covington, Georgia
• Reed City, Michigan
• Cincinnati, Ohio
• Belvidere, Illinois
• Fridley, Minnesota
• Wellston, Ohio
• Geneva, Illinois
• Hannibal, Missouri
• Murfreesboro, Tennessee
• Cedar Rapids, Iowa
• Albuquerque, New Mexico
• Milwaukee, Wisconsin
• Irapuato, Mexico
• Buffalo, New York
International
• Rooty Hill, Australia
• Sanhe, China
• Nashik, India
• Campo Novo do Pareceis, Brazil
• Shanghai, China
• San Adrian, Spain
• Pouso Alegre, Brazil
• Arras, France
• Guangzhou, China
• Labatut, France
• Nanjing, China
• Inofita, Greece
North America Pet
• Richmond, Indiana
• Joplin, Missouri
North America Foodservice
• Chanhassen, Minnesota
• Joplin, Missouri
• St. Charles, Missouri
• Green Bay, Wisconsin
operate
numerous
grain
elevators
the
United
States
support
our
domestic
manufacturing
activities.
also
utilize
approximately
17 million
square
feet
warehouse
and
distribution
space,
nearly
all of
which
is leased,
that
primarily
supports
our
North
America
Retail
and
North
America
Pet
segments.
own
and
lease
number
dedicated
sales
and
administrative
offices
around
the world,
totaling
approximately
2 million
square feet.
have
additional
warehouse,
distribution,
and
office
space
in our
plant locations.
As part
of our
Häagen-Dazs
business in
our International
segment
we operate
332 (all
leased) and
franchise
387 branded
ice cream
parlors in various countries around the world, all outside of the United States and Canada.
ITEM 3 - Legal Proceedings
We are the
subject of various pending or threatened legal
actions in the ordinary course of our business. All such
matters are subject to
many uncertainties and
outcomes that are not
predictable with assurance.
In our opinion,
there were no
claims or litigation pending
May
that
were
reasonably
likely
have
material
adverse
effect
our
consolidated
financial
position
results
operations. See
the information
contained under
the section entitled
“Environmental Matters”
in Item 1
of this report
for a discussion
of environmental matters in which we are involved.
ITEM 4 - Mine Safety Disclosures
None.
PART
ITEM 5 - Market for Registrant’s Common
Equity, Related Stockholder Matters
and Issuer Purchases of Equity Securities
Our common
stock is
listed on
the New
York
Stock Exchange
under the
symbol “GIS.”
On June 9,
2025, there
were approximately
21,600 record holders of our common stock.
The
following
table
sets
forth
information
with
respect
shares
our
common
stock
that
purchased
during
the
fiscal
quarter
ended May 25, 2025:
Period
Total
Number
of Shares
Purchased (a)
Average Price
Paid Per Share
Total
Number of Shares
Purchased as Part of a
Publicly Announced
Program (b)
Maximum Number of
Shares that may yet
be Purchased Under
the Plans or Program (b)
February 24, 2025 -
March 30, 2025
March 31, 2025 -
April 27, 2025
April 28, 2025 -
May 25, 2025
Total
The total
number of
shares purchased
includes shares
of common
stock withheld
for the
payment of
withholding taxes
upon the
distribution of deferred option units.
June
our
Board of
Directors
approved
a new
authorization
for
the repurchase
shares of
our
common
stock
and
terminated
the
prior
authorization.
Purchases
can
made
the
open
market
privately
negotiated
transactions,
including
the
use
call
options
and
other
derivative
instruments,
Rule
trading
plans,
and
accelerated
repurchase programs. The Board did not specify an expiration date for the
authorization.
ITEM 7 - Management’s Discussion and Analysis of
Financial Condition and Results of Operations
EXECUTIVE OVERVIEW
are
global packaged
foods company.
develop
distinctive
value-added
food
products
and
market
them under
unique
brand
names.
work
continuously
improve
our
core
products
and
create
new
products
that
meet
consumers’
evolving
needs
and
preferences.
addition,
build
the
equity
our
brands
over
time
with
strong
consumer-directed
marketing,
innovative
new
products,
and
effective
merchandising.
believe
our
brand-building
approach
the
key
winning
and
sustaining
leading
share
positions in markets around the globe.
Our fundamental
financial goal is
to generate competitively
differentiated returns
for our shareholders
over the long
term.
believe
achieving
that
goal
requires
generate
consistent
balance
net
sales
growth,
margin
expansion,
cash
conversion,
and
cash
return to shareholders over time.
Our long-term growth objectives are to deliver the following performance
on average over time:
2 to 3 percent annual growth in organic net sales;
mid-single-digit annual growth in adjusted operating profit;
mid- to high-single-digit annual growth in adjusted diluted earnings per share
(EPS);
free cash flow conversion of at least 95 percent of adjusted net earnings
after tax; and
cash return to shareholders of 80 to 90 percent of free cash flow,
including an attractive dividend yield.
Guided by our
purpose to make
food the world
loves, we are
executing our Accelerate
strategy to drive
sustainable, profitable growth
and
top-tier
shareholder
returns
over
the
long
term.
The
strategy
focuses
four
pillars
create
competitive
advantages
and
win:
boldly
building
brands,
relentlessly
innovating,
unleashing
our
scale,
and
standing
for
good.
are
prioritizing
our
core
markets,
global
platforms,
and
local
gem
brands
that
have
the
best
prospects
for
profitable
growth,
and
are
committed
reshaping
our
portfolio with strategic acquisitions and divestitures to further enhance
our growth profile.
Our
consolidated
net
sales
for
fiscal
declined
percent
billion.
organic
basis,
net
sales
decreased
percent
compared to year-ago levels. Operating
profit of $3.3 billion decreased
4 percent. Adjusted operating profit
of $3.4 billion decreased 7
percent on a
constant-currency basis.
Diluted EPS declined
5 percent to
$4.10. Adjusted diluted
EPS of $4.21
decreased 7 percent
constant-currency
basis
(See
the
“Non-GAAP
Measures”
section
below
for
description
our
use
measures
not
defined
generally accepted accounting principles (GAAP)).
Net cash
provided
by operations
totaled $2,918
million in
fiscal 2025
representing a
conversion rate
percent of
net earnings,
including
earnings attributable
to noncontrolling
interests. This
cash generation
supported capital
investments
totaling $625
million,
and
our
resulting
free
cash
flow was
million
conversion
rate
percent of
adjusted
net
earnings,
including
earnings
attributable
noncontrolling
interests.
returned
cash
shareholders
through
dividends
totaling
million
and
share
repurchases
totaling
million
(See
the
“Non-GAAP
Measures”
section
below
for
description
our
use
measures
not
defined by GAAP).
fiscal
the
operating
environment
was
characterized
significant
volatility
and
uncertainty,
resulting
value-seeking
behaviors by
consumers that
were deeper
and more
prolonged than
we expected.
result, we
made important
changes to
adapt to
the evolving
environment and
put our
business on
a path
back to
growth.
increased investment
to bring
consumers greater
value,
which strengthened our
pound volume performance
as we exited the
year.
While the level of
incremental investment
resulted in fiscal
financial
results
below
our
targeted
ranges,
expect
the
improved
pound
volume
and
household
penetration
trends
will
translate into stronger top- and bottom-line performance over the long
term.
delivered mixed performance against the three priorities we established
at the beginning of the year:
did not achieve our objective
of accelerating organic net sales
growth, with full-year organic
net sales declining 2 percent
driven primarily
by unfavorable
organic net
price realization
and mix
resulting from
our increased
investments in
consumer
value (see the ‘Non-GAAP Measures” section below for our use of
this measure not defined by GAAP).
successfully
created
fuel
for
our
investments,
including
generating
industry-leading
Holistic
Margin
Management
(HMM) cost savings by increasingly applying digital and technology capabilities throughout
our supply chain.
successfully drove
strong cash
generation, with
free cash
flow conversion
finishing at
97 percent,
which was
above our
full-year
target
percent.
This
enabled
fund
capital
investment,
raise
our
dividend,
and
continue
our
share
repurchase activity.
also continued
to reshape our
portfolio, including
acquisitions and divestitures
that further
improved
our portfolio’s
ability to generate profitable growth
over the long term (see the
“Non-GAAP Measures” section below
for our
use of this measure not defined by GAAP).
detailed
review
our
fiscal
performance
compared
fiscal
appears
below
the
section
titled
“Fiscal
Consolidated Results of Operations.” A detailed review
of our fiscal 2024 performance compared to our fiscal
2023 performance is set
forth
in Part
II, Item
our Form
10-K for
the fiscal
year
ended
May 26, 2024
under the
caption
“Management’s
Discussion and
Analysis of
Financial Condition
and Results
of Operations
– Fiscal
2024 Consolidated
Results of
Operations,” which
is incorporated
herein by reference.
In fiscal 2026, we
plan to continue advancing
our Accelerate strategy.
Our key priorities are to
return North America Retail
to volume
growth,
Accelerate
North
America
Pet
growth
with
expanded
portfolio,
and
drive
efficiencies
reinvest
growth.
expect
category
growth
below
our
long-term
projections,
reflecting
less
benefit
from
net price
realization
and
mix
amid
continued
challenging
consumer
backdrop.
strengthen
our
categories
and
market
share
performance,
plan
increase
investment
consumer
value,
product
news,
innovation,
and
brand
building,
guided
our
remarkable
experience
framework.
This
includes
significant
strategic investment
to launch
Blue Buffalo
into the
fast-growing
U.S. fresh
pet food
sub-category
in calendar
expect
the
combination
these
growth
investments,
input
cost
inflation,
and
reset
corporate
incentive
will
outpace
expected
HMM cost savings of 5 percent of cost of
goods sold, savings from our global transformation
initiative, and benefits from a 53rd week
in fiscal 2026.
In addition, we
expect the net
impact of the
divestiture of
our North American
yogurt businesses and
the Whitebridge
Pet Brands acquisition will reduce adjusted operating profit growth
by approximately 5 points in fiscal 2026.
Based on these assumptions, our key full-year fiscal 2026 targets
are summarized below:
Organic net sales are expected to range between down 1 percent and
up 1 percent.
Adjusted operating profit
is expected to
be down 10
to 15 percent in
constant currency from
the base of
$3.4 billion reported
in fiscal 2025.
Adjusted diluted
EPS is
expected
down 10
percent in
constant currency
from the
base of
$4.21 earned
in fiscal
Free cash flow conversion is expected to be at least 95 percent of adjusted after-tax
earnings.
See the “Non-GAAP Measures” section below for a description of our
use of measures not defined by GAAP.
Certain terms used throughout this report are defined in a glossary in Item
8 of this report.
FISCAL 2025 CONSOLIDATED
RESULTS
OF OPERATIONS
fiscal
net
sales
and
organic
net
sales
decreased
percent
compared
fiscal
Operating
profit
million
decreased
percent
compared
fiscal
primarily
driven
unfavorable
net
price
realization
and
mix,
increase
selling,
general,
and
administrative
expenses,
legal
and
voluntary
recall
net
recoveries
recorded
fiscal
decrease
contributions from
volume growth, higher
restructuring and transformation
charges, higher
acquisition and divestiture
transaction and
integration
costs, and
an unfavorable
change in
the mark
-to-market
valuation
certain commodity
positions
and
grain
inventories.
These impacts were
partially offset by
impairment charges recorded
in fiscal 2024,
a divestiture gain related
to the sale of
our Canada
yogurt
business
fiscal
and
lower
input
costs.
Operating
profit
margin
percent
decreased
basis
points.
Adjusted
operating
profit
million
decreased
percent
constant-currency
basis,
primarily
driven
unfavorable
net
price
realization
and
mix,
increase in
expenses,
and
a decrease
contributions
from volume
growth,
partially
offset
lower
input costs. Adjusted
operating profit margin
decreased 90 basis
points to 17.2
percent. Diluted earnings
per share of
$4.10 decreased
5 percent compared
to fiscal 2024.
Adjusted diluted earnings
per share of
$4.21 decreased 7
percent on a
constant-currency basis (see
the “Non-GAAP Measures” section below for a description of our use of measures
not defined by GAAP).
A summary of our consolidated financial results for fiscal 2025 follows:
Fiscal 2025
In millions,
except per
share
Fiscal 2025 vs.
Fiscal 2024
Percent of Net
Sales
Constant-
Currency
Growth (a)
Net sales
Operating profit
Net earnings attributable to General Mills
Diluted earnings per share
Organic net sales growth rate (a)
Adjusted operating profit (a)
Adjusted diluted earnings per share (a)
See the “Non-GAAP Measures” section below for our use of measures not defined by
GAAP.
Consolidated
net sales
were as follows:
Fiscal 2025
Fiscal 2025 vs.
Fiscal 2024
Fiscal 2024
Net sales (in millions)
Contributions from volume growth (a)
Net price realization and mix
Foreign currency exchange
Flat
Note: Table may
not foot due to rounding
(a) Measured in tons based on the stated weight of our product shipments.
Net sales
in fiscal
2025 decreased
2 percent
compared to
fiscal 2024,
driven by
a decrease
in contributions
from volume
growth and
unfavorable net price realization and mix.
Components of organic net sales growth are shown in the following
table:
Fiscal 2025 vs. Fiscal 2024
Contributions from organic volume growth (a)
Flat
Organic net price realization and mix
Organic net sales growth
pts
Foreign currency exchange
Flat
Acquisitions and divestiture
Flat
Net sales growth
pts
Note: Table may
not foot due to rounding
(a) Measured in tons based on the stated weight of our product shipments.
Organic net
sales in
fiscal 2025
decreased 2
percent compared
to fiscal 2024,
driven by
unfavorable organic
net price realization
and
mix.
Cost of
sales
decreased $172 million
in fiscal
$12,754 million. The
decrease was
primarily driven
$95 million
decrease
attributable to lower
volume and an $89
million decrease attributable
to product rate and mix.
recorded a $16 million
net decrease
in cost of
sales related to
the mark-to-market valuation
of certain commodity
positions and grain
inventories in fiscal
2025, compared
to a net decrease
of $39 million in
fiscal 2024 (please refer
to Note 8 to
the Consolidated Financial
Statements in Item
8 of this report
for
additional
information).
also
recorded
million
restructuring
charges
fiscal
compared
million
restructuring charges
and $2 million
of restructuring initiative
project-related costs in
cost of sales
in fiscal 2024
(please refer to
Note
4 to the Consolidated Financial Statements in Item 8 of this report for additional
information).
Gross
margin
decreased
percent
fiscal
compared
fiscal
Gross
margin
percent
net
sales
percent
decreased 30 basis points compared to fiscal 2024.
SG&A expenses
increased $187 million to
$3,446 million in fiscal 2025
compared to fiscal 2024
primarily driven by a
legal recovery
in fiscal 2024, transaction
and integration costs recorded
in fiscal 2025 related to
the definitive agreements to
sell our North American
yogurt businesses
and costs
related to
the Whitebridge
Pet Brands
acquisition,
the addition
pet food
business in
Europe in
fiscal
and net recoveries
recorded in fiscal
2024 from the
fiscal 2023 voluntary
recall on certain
international
Häagen-Dazs
ice cream
products. SG&A expenses as a percent of net sales in fiscal 2025
increased 130 basis points compared to fiscal 2024.
Divestitures
gain, net
totaled $96 million in fiscal 2025
related to the sale of our Canada yogurt business (please refer
to Note 3 to the
Consolidated Financial Statements in Item 8 of this report).
Restructuring,
transformation,
impairment,
and other
exit
costs
totaled
million in
fiscal 202
compared
million
fiscal 2024. In fiscal 2025, we approved a multi-year global transformation
initiative to drive increased productivity by enhancing end-
to-end
business
processes,
enabled
targeted
organizational
actions,
and
result,
recorded
million
charges
fiscal
also recorded
$8 million
of restructuring
charges in
fiscal 2025
related to
actions previously
announced.
In fiscal 2024,
recorded a
million non-cash
goodwill impairment
charge
related to
our Latin
America reporting
unit and
$103 million
of non-
cash
impairment
charges
related
our
Top
Chews
True
Chews
and
EPIC
brand
intangible
assets.
fiscal
approved
restructuring
actions to
enhance the
go-to-market
commercial strategy
and associated
organizational
structure of
our North
America
Pet segment,
and as
a result,
we recorded
$17 million
of charges
in fiscal
2024. Please
refer to
Note 4
to the
Consolidated Financial
Statements in Item 8 of this report for additional information.
Benefit
plan
non-service
income
totaled
million
fiscal
compared
$76 million
fiscal
primarily
reflecting
higher amortization
of losses
and higher
interest costs
(please refer
to Note
the Consolidated
Financial Statements
in Item
this report for additional information).
Interest,
net
for fiscal
2025 totaled
$524 million, $45
million higher
than fiscal
2024, primarily
driven by
higher average
long-term
debt levels.
Our
effective tax rate
for fiscal 2025 was 20.2 percent compared
to 19.6 percent in fiscal 2024. The 0.6
percentage point increase was
primarily driven
by certain nonrecurring
tax benefits in
fiscal 2024, partially
offset by favorable
earnings mix by
jurisdiction in fiscal
2025. Our
adjusted
effective
tax rate
was 20.6
percent in
fiscal 2025
compared
percent in
fiscal 2024
(see the
“Non-GAAP
Measures”
section
below
for
description
our
use
measures
not
defined
GAAP).
The
percentage
point
increase
was
primarily
due
certain
nonrecurring
tax
benefits
fiscal
partially
offset
favorable
earnings
mix
jurisdiction
fiscal
After-tax
earnings from
joint ventures
decreased
$58 million
fiscal
compared
million
fiscal
primarily
driven
by our
share of
asset impairment
charges
at CPW
fiscal
a constant
-currency
basis,
after-tax
earnings from
joint
ventures decreased
29 percent (see
the “Non-GAAP
Measures” section
below for
a description of
our use of
measures not defined
GAAP). The components of our joint ventures’ net sales growth are shown in
the following table:
Fiscal 2025 vs. Fiscal 2024
CPW
HDJ
Total
Contributions from volume growth (a)
pts
pts
Net price realization and mix
pts
Net sales growth in constant currency
pts
pts
Foreign currency exchange
pts
pts
pts
Net sales growth
pts
pts
Note: Table may
not foot due to rounding.
(a) Measured in tons based on the stated weight of our product shipments.
Net earnings attributable to noncontrolling interests
increased to $24 million in fiscal 2025
compared to $22 million in fiscal 2024.
Average diluted shares
outstanding
decreased by 22 million in fiscal 2025 from fiscal 2024 primarily due to share repurchase
RESULTS
OF SEGMENT OPERATIONS
Our
businesses
are
organized
into
four
operating
segments:
North
America
Retail,
International,
North
America
Pet,
and
North
America Foodservice.
The following tables provide
the dollar amount and percentage
of net sales and operating
profit from each segment for
fiscal 2025 and
fiscal 2024:
Fiscal Year
In Millions
Dollars
Percent of Total
Dollars
Percent of Total
Net Sales
North America Retail
International
North America Pet
North America Foodservice
Total
Segment Operating Profit
North America Retail
International
North America Pet
North America Foodservice
Total
Net sales of $10.1
million in fiscal 2025
and $2.8 million in
fiscal 2024 related to
a business managed
by our Strategic Growth
Office
are included within corporate and other net sales, which is reported separately
from segment net sales.
Segment
operating
profit
reviewed
our
executive
management
excludes
unallocated
corporate
items,
net
gain
loss
divestitures, and restructuring, transformation, impairment, and other
exit costs that are centrally managed.
NORTH AMERICA RETAIL
SEGMENT
Our North America Retail
operating segment reflects business
with a wide variety of
grocery stores, mass merchandisers, membership
stores,
natural
food
chains,
drug,
dollar
and
discount
chains,
convenience
stores,
and
e-commerce
grocery
providers.
Our
product
categories
this
business
segment
are
ready-to-eat
cereals,
refrigerated
yogurt,
soup,
meal
kits,
refrigerated
and
frozen
dough
products,
dessert
and
baking
mixes,
frozen
pizza
and
pizza
snacks,
snack
bars,
fruit
snacks,
savory
snacks,
and
wide
variety
organic products including ready-to-eat cereal, frozen
and shelf-stable vegetables, meal kits, fruit snacks and snack bars.
North America Retail net sales were as follows:
Fiscal 2025
Fiscal 2025 vs. 2024
Percentage Change
Fiscal 2024
Net sales (in millions)
Contributions from volume growth (a)
pts
Net price realization and mix
Flat
Foreign currency exchange
Flat
Note: Table may
not foot due to rounding.
Measured in tons based on the stated weight of our product shipments.
North America Retail
net sales decreased
5 percent in
fiscal 2025 compared
to fiscal 2024, driven
by a decrease in
contributions from
volume growth.
The components of North America Retail organic net
sales growth are shown in the following table:
Fiscal 2025 vs. 2024
Percentage Change
Contributions from organic volume growth (a)
pts
Organic net price realization and mix
Organic net sales growth
pts
Foreign currency exchange
Flat
Divestiture (b)
Net sales growth
pts
Note: Table may
not foot due to rounding.
Measured in tons based on the stated weight of our product shipments.
Divestiture
Canada
yogurt
business
the
third
quarter
fiscal
Please
refer
Note
the
Consolidated
Financial
Statements in Part II, Item 8 of this report.
North
America
Retail
organic
net
sales
decreased
percent
fiscal
compared
fiscal
driven
decrease
contributions from organic volume growth and unfavorable
organic net price realization and mix.
Net sales for our North America Retail operating units are shown in the following table:
In Millions
Fiscal 2025
Fiscal 2025 vs. 2024
Percentage Change
Fiscal 2024
U.S. Meals & Baking Solutions
U.S. Morning Foods
U.S. Snacks
Canada (a)
Total
constant
currency
basis,
Canada
operating
unit
net
sales
decreased
percent
fiscal
See
the
“Non-GAAP
Measures” section below for our use of this measure not defined by GAAP.
Segment operating
profit decreased
percent to
$2,730 million in
fiscal 2025
compared to
$3,080 million
in fiscal
2024, primarily
driven by a
decrease in contributions
from volume growth,
higher input costs,
and unfavorable net
price realization
and mix, partially
offset by lower
SG&A expenses. Segment
operating profit decreased
11 percent
on a constant-currency
basis in fiscal 2025
compared
to fiscal 2024 (see the “Non-GAAP Measures” section below for our use
of this measure not defined by GAAP).
INTERNATIONAL SEGMENT
Our
International
operating
segment
consists
retail
and
foodservice
businesses
outside
the
United
States
and
Canada.
Our
product categories include super-premium
ice cream and frozen desserts, meal kits, salty snacks
snack bars, dessert and baking mixes,
shelf-stable
vegetables,
and
pet
food
products.
also
sell
super-premium
ice
cream
and
frozen
desserts
directly
consumers
through owned
retail shops. Our
International segment
also includes products
manufactured in
the United States
for export, mainly
Caribbean and Latin American markets, as well as products we
manufacture for sale to our international joint ventures. Revenu
es from
export activities are reported in the region or country where the end customer
is located.
International net sales were as follows:
Fiscal 2025
Fiscal 2025 vs. 2024
Percentage Change
Fiscal 2024
Net sales (in millions)
Contributions from volume growth (a)
pts
Net price realization and mix
Foreign currency exchange
pts
Note: Table may
not foot due to rounding.
Measured in tons based on the stated weight of our product shipments.
International net
sales increased 2
percent in fiscal
2025 compared to
fiscal 2024, driven
by an increase
in contributions from
volume
growth and favorable net price realization and mix, partially offset
by unfavorable foreign currency exchange.
The components of International organic net sales growth
are shown in the following table:
Fiscal 2025 vs. 2024
Percentage Change
Contributions from organic volume growth (a)
Organic net price realization and mix
Flat
Organic net sales growth
Flat
Foreign currency exchange
pts
Acquisition (b)
pts
Net sales growth
pts
Note: Table may
not foot due to rounding.
Measured in tons based on the stated weight of our product shipments.
Acquisition of a pet food business in Europe in fiscal 2024. Please refer to Note
3 to the Consolidated Financial Statements in Part
II, Item 8 of this report.
International organic net sales in fiscal 2025 essentially matched
fiscal 2024.
Segment
operating
profit decreased
percent to
$96 million
in fiscal
2025 compared
million
primarily
driven by
higher
expenses
and
unfavorable
net
price
realization
and
mix,
partially
offset
lower
input
costs
and
increase
contributions
from
volume
growth.
Segment
operating
profit
decreased
percent
constant-currency
basis
fiscal
compared to fiscal 2024 (see the “Non-GAAP Measures” section below
for our use of this measure not defined by GAAP).
NORTH AMERICA PET SEGMENT
Our North
America Pet
operating segment
includes pet
food products
sold primarily
in the
United States
and Canada
in national
pet
superstore
chains,
e-commerce
retailers,
grocery
stores,
regional
pet
store
chains,
mass
merchandisers,
and
veterinary
clinics
and
hospitals.
Our
product
categories
include
dog
and
cat
food
(dry
foods,
wet
foods,
and
treats)
made
with
whole
meats,
fruits,
and
vegetables
and
other
high-quality
natural
ingredients.
Our tailored
pet
product
offerings
address
specific
dietary,
lifestyle,
and
life-
stage needs
and span
different product
types, diet
types, breed
sizes for
dogs, life
stages, flavors,
product functions,
and textures
and
cuts for wet foods.
North America Pet net sales were as follows:
Fiscal 2025
Fiscal 2025 vs. 2024
Percentage Change
Fiscal 2024
Net sales (in millions)
Contributions from volume growth (a)
pts
Net price realization and mix
Flat
Foreign currency exchange
Flat
Note: Table may
not foot due to rounding.
Measured in tons based on the stated weight of our product shipments.
North America
Pet net
sales increased
4 percent
in fiscal
2025 compared
to fiscal
2024, driven
increase in
contributions from
volume growth.
The components of North America Pet organic net sales growth
are shown in the following table:
Fiscal 2025 vs. 2024
Percentage Change
Contributions from organic volume growth (a)
pts
Organic net price realization and mix
pts
Organic net sales growth
Flat
Foreign currency exchange
Flat
Acquisition (b)
pts
Net sales growth
pts
Note: Table may
not foot due to rounding.
Measured in tons based on the stated weight of our product shipments.
Acquisition of Whitebridge
Pet Brands business in
fiscal 2025. Please
refer to Note 3
to the Consolidated
Financial Statements in
Part II, Item 8 of this report.
North America Pet organic net sales in fiscal 2025 essentially matched
fiscal 2024.
North
America
Pet
operating
profit
increased
percent
$501 million
fiscal
compared
$486 million
fiscal
primarily driven by an increase in contributions
from volume growth and lower input costs, partially offset
by higher SG&A expenses,
including increased media and advertising expenses,
and unfavorable net price realization and mix. Segment
operating profit increased
3 percent
constant-currency basis
in fiscal
2025 compared
to fiscal
2024 (see
the “Non-GAAP
Measures” section
below for
our
use of this measure not defined by GAAP).
NORTH AMERICA FOODSERVICE SEGMENT
Our
North
America
Foodservice
segment
consists
foodservice
businesses
the
United
States
and
Canada.
Our
major
product
categories
our
North
America
Foodservice
operating
segment
are
ready-to-eat
cereals,
snacks,
refrigerated
yogurt,
frozen
meals,
unbaked and
fully baked
frozen dough products,
baking mixes,
and bakery
flour.
Many products we
sell are branded
to the consumer
and nearly
all are
branded to
our customers.
sell to
distributors and
operators in
many customer
channels including
foodservice,
vending, and supermarket bakeries.
North America Foodservice net sales were as follows:
Fiscal 2025
Fiscal 2025 vs. 2024
Percentage Change
Fiscal 2024
Net sales (in millions)
Contributions from volume growth (a)
Net price realization and mix
Foreign currency exchange
Flat
Note: Table may
not foot due to rounding.
Measured in tons based on the stated weight of our product shipments.
North America Foodservice net sales increased 2 percent in fiscal
2025 compared to fiscal 2024, driven by an increase in
contributions
from volume growth and favorable net price realization and mix.
The components of North America Foodservice organic
net sales growth are shown in the following table:
Fiscal 2025 vs. 2024
Percentage Change
Contributions from organic volume growth (a)
Organic net price realization and mix
Organic net sales growth
pts
Foreign currency exchange
Flat
Net sales growth
pts
Note: Table may
not foot due to rounding.
Measured in tons based on the standard weight of our product shipments.
North
America
Foodservice
organic
net
sales
increased
percent
fiscal
compared
fiscal
driven
increase
contributions from organic volume growth and favorable
organic net price realization and mix.
Segment
operating
profit
increased
percent
$355 million
fiscal
compared
$316 million
fiscal
primarily
driven by favorable
net price realization and
mix. Segment operating
profit increased 13 percent
on a constant-currency
basis in fiscal
2025 compared to fiscal 2024 (see the “Non-GAAP Measures” section below
for our use of this measure not defined by GAAP).
UNALLOCATED CORPORATE
ITEMS
Unallocated
corporate
items
include
corporate
overhead
expenses,
variances
planned
domestic
employee
benefits
and
incentives,
certain
charitable
contributions,
restructuring
initiative project-related
costs,
gains and
losses on
corporate
investments,
results
from
certain businesses managed by our Strategic Growth Office,
and other items that are not part of our measurement of segment operating
performance. These
include gains and
losses arising from
the revaluation of
certain grain inventories
and gains and
losses from mark-
to-market valuation of certain commodity positions until
passed back to our operating segments. These items affecting
operating profit
are
centrally
managed
the
corporate
level
and
are
excluded
from
the
measure
segment
profitability
reviewed
executive
management.
Under
our
supply
chain
organization,
our
manufacturing,
warehouse,
and
distribution
activities
are
substantially
integrated
across
our
operations
order
maximize
efficiency
and
productivity.
result,
fixed
assets
and
depreciation
and
amortization expenses are neither maintained nor available by operating
segment.
Unallocated corporate
expense totaled
$396 million
in fiscal 2025
compared to
$334 million
last year.
In fiscal
recorded a
million
legal
recovery.
recorded
million
transaction
costs
related
the
definitive
agreements
sell
our
North
American yogurt businesses and the Whitebridge Pet Brands acquisition
in fiscal 2025, compared to $14 million of transaction costs in
fiscal 2024, primarily
related to our
acquisition of a
pet food business
in Europe.
also recorded $14
million of integration
costs in
fiscal 2025,
related to
the acquisition
of Whitebridge
Pet Brands
and the
acquisition of
a pet
food business
in Europe.
In fiscal
recorded
million
net recoveries
related
voluntary
recall
certain
international
Häagen-Dazs
ice
cream
products
fiscal 2023. We
recorded a $16 million net decrease in expense related to the mark-to-market
valuation of certain commodity positions
and grain
inventories in fiscal
2025, compared
million net decrease
in expense
last year.
In addition,
we recorded $8
million
of net losses related to valuation adjustments in fiscal 2025,
compared to $18 million of net losses related to valuation
adjustments and
the
sale
corporate
investments
fiscal
recorded
million
restructuring
charges
and
million
restructuring
initiative
project-related
costs
cost
sales
fiscal
compared
million
restructuring
charges
and
million
restructuring
initiative
project-related
costs
cost
sales
fiscal
Certain
compensation
and
benefit
related
expenses
decreased in fiscal 2025 compared to fiscal 2024.
IMPACT OF INFLATION
experienced broad-based global input cost inflation
of 4 percent in fiscal 2025 and fiscal 2024. We
expect approximately 3 percent
input cost inflation
in fiscal 2026
before the impact
of newly enacted
tariffs. We
expect the gross
risk of newly
enacted tariffs
to 2 percent
of cost of
goods sold, and
we are attempting
to mitigate tariff
risk through
various methods.
attempt to minimize
the
effects
inflation
through
HMM,
Strategic
Revenue
Management
(SRM),
planning,
and
operating
practices.
Our
market
risk
management practices are discussed in Item 7A of this report.
LIQUIDITY AND CAPITAL
RESOURCES
The primary source of our
liquidity is cash flow from
operations. Over the most recent
two-year period, our operations have
generated
$6.2 billion
in cash.
A substantial
portion of
this operating
cash flow
has been
returned to
shareholders through
dividends and
share
repurchases.
also
use
cash
from
operations
fund
our
capital
expenditures,
acquisitions,
and
debt
service.
typically
use
combination
cash,
notes
payable,
and
long-term
debt,
and
occasionally
issue
shares
common
stock,
finance
significant
acquisitions.
May
we had
million
of cash
and
cash equivalents
held
in foreign
jurisdictions.
anticipation
repatriating
funds
from
foreign
jurisdictions,
record
local
country
withholding
taxes
our
international
earnings,
applicable.
may
repatriate our
cash and
cash equivalents
held by
our foreign
subsidiaries without
such funds
being subject
to further
U.S. income
tax
liability. Earnings
prior to fiscal 2018 from our foreign subsidiaries remain permanently reinvested in
those jurisdictions.
Cash Flows from Operations
Fiscal Year
In Millions
Net earnings, including earnings attributable to noncontrolling interests
Depreciation and amortization
After-tax earnings from joint ventures
Distributions of earnings from joint ventures
Stock-based compensation
Deferred income taxes
Pension and other postretirement benefit plan contributions
Pension and other postretirement benefit plan costs
Divestitures gain, net
Restructuring, transformation, impairment, and other exit costs
Changes in current assets and liabilities, excluding the effects of
acquisitions and divestitures
Other, net
Net cash provided by operating activities
During
fiscal
cash
provided
operations
was
million
compared
$3,303 million
the
same
period
last
year.
The
$384 million decrease was
primarily driven by a
$296 million decrease in net
earnings excluding the impact
of the divestiture in fiscal
2025, and a $149 million change in restructuring, transformation,
impairment, and other exit costs.
strive
grow
core
working
capital
below
the
rate
growth
our
net
sales.
For
fiscal
core
working
capital
net
liability
decreased
percent,
compared
net
sales
decrease
percent.
The
core
working
capital
net
liability
decreased
million from $393
million in fiscal
to $303 million
in fiscal 2025,
primarily due to
an increase in
receivables, partially offset
an increase in accounts payable.
Cash Flows from Investing Activities
Fiscal Year
In Millions
Purchases of land, buildings, and equipment
Acquisitions, net of cash acquired
Investments in affiliates, net
Proceeds from disposal of land, buildings, and equipment
Proceeds from divestitures, net of cash divested
Other, net
Net cash used by investing activities
fiscal
used
$1,795 million
cash
through
investing
activities
compared
million
fiscal
invested
$625 million in land, buildings, and equipment in fiscal 2025, a
decrease of $149 million from fiscal 2024.
During fiscal 2025, we acquired Whitebridge Pet Brands for $1,412
million cash, net of cash acquired.
During fiscal 2025, we
completed the sale of our Canada yogurt business for $242 million cash.
During fiscal 2024, we acquired a pet food business in
Europe for $426 million cash, net of cash acquired, and we paid an additional
$8 million purchase price holdback after certain closing
conditions were met in fiscal 2025.
expect
capital
expenditures
approximately
percent
reported
net
sales
fiscal
These
expenditures
will
fund
initiatives that are expected to fuel growth, support innovative products,
and continue HMM initiatives throughout the supply chain.
Cash Flows from Financing Activities
Fiscal Year
In Millions
Change in notes payable
Issuance of long-term debt
Payment of long-term debt
Repurchase of Class A limited membership interests in General Mills Cereals, LLC
Proceeds from common stock issued on exercised options
Purchases of common stock for treasury
Dividends paid
Distributions to noncontrolling interest holders
Other, net
Net cash used by financing activities
Financing
activities used
$1,180 million of
cash in
fiscal 2025
compared to
$2,272 million
in fiscal
had $1,722 million
net debt
issuances in
fiscal 2025
compared to
$1,143 million of
net debt
issuances in
fiscal 2024.
For more
information on
our debt
issuances and payments, please refer to Note 9 to the Consolidated Financial Statements
in Item 8 of this report.
During fiscal 2025, we
received $43 million of net
proceeds from common stock
issued on exercised options
compared to $26 million
in fiscal 2024.
During fiscal 2025, we purchased
the outstanding Class A limited
membership interests in General
Mills Cereals, LLC (GMC Class A
Interests)
from
the third-party
holder
for
$253 million.
For more
information,
please refer
to Note
the Consolidated
Financial
Statements in Item 8 of this report.
During fiscal 2025, we
repurchased 19 million shares
of our common stock for
$1,203 million. During fiscal 2024,
we repurchased 29
million shares of our common stock for $2,002 million.
Dividends paid in fiscal 2025 totaled
$1,339 million, or $2.40 per share.
Dividends paid in fiscal 2024
totaled $1,363 million, or $2.36
per share.
Selected Cash Flows from Joint Ventures
Selected cash flows from our joint ventures are set forth in the following table:
Fiscal Year
Inflow (Outflow), in Millions
Investments in affiliates, net
Dividends received
The following table details the credit facilities and lines of credit we had available
as of May 25, 2025:
In Millions
Borrowing Capacity
Borrowed Amount
Committed credit facility expiring October 2029
Uncommitted credit facilities and lines of credit
Total
To ensure availability
of funds, we maintain bank credit lines and have commercial paper programs
available to us in the United States
and Europe.
Certain
our
long-term
debt
agreements
and
our
credit
facilities
contain
restrictive
covenants.
May
were
compliance with all of these covenants.
We have
$1,528 million of long-term debt maturing
in the next 12 months that
is classified as current, including
€500 million of 0.125
percent fixed-rate notes due November 15, 2025,
€600 million of 0.45 percent fixed-rate notes due January
15, 2026, and €250 million
floating-rate
notes
due
April 22,
believe
that cash
flows
from
operations,
together
with available
short- and
long-term
debt financing, will be adequate to meet our material contractual
obligations and overall liquidity and capital needs
for at least the next
12 months.
As of May
our total debt,
including the
impact of derivative
instruments designated
as hedges,
was 74 percent
in fixed-rate
and 26
percent in
floating-rate instruments,
compared to
85 percent
in fixed-rate
and 15
percent in
floating-rate instruments
on May
CRITICAL ACCOUNTING ESTIMATES
For a complete description of our
significant accounting policies, please see Note
2 to the Consolidated Financial
Statements in Item 8
of this report. Our critical accounting
estimates are those that have
a meaningful impact on the reporting of our
financial condition and
results of operations.
These estimates include
our accounting for
revenue recognition, valuation
of long-lived assets,
intangible assets,
income taxes, and defined benefit pension, other postretirement benefit,
and postemployment benefit plans.
Revenue Recognition
Our
revenues
are
reported
net
variable
consideration
and
consideration
payable
our
customers,
including
trade
promotion,
consumer
coupon
redemption,
and
other
reductions
the
transaction
price,
including
estimated
allowances
for
returns,
unsalable
product,
and
prompt
pay
discounts.
Trade
promotions
are
recorded
using
significant
judgment
estimated
participation
and
performance levels
for offered
programs at the
time of sale.
Differences between
the estimated and
actual reduction to
the transaction
price
are recognized
change
in estimate
subsequent
period.
Our accrued
trade and
coupon promotion
liabilities
were
million
May
and
million
May
Because
these
amounts
are
significant,
our
estimates
are
inaccurate we would have to make adjustments in subsequent periods that
could have a significant effect on our results of operations.
Valuation
of Long-Lived Assets
estimate
the useful
lives
of long
-lived
assets and
make
estimates concerning
undiscounted
cash flows
to review
for impairment
whenever
events or
changes in
circumstances indicate
that the
carrying
amount of
an asset
(or asset
group)
may not
be recoverable.
Fair value is measured using discounted cash flows or independent appraisals,
as appropriate.
Intangible Assets
Goodwill
and
other
indefinite-lived
intangible
assets
are
not
subject
amortization
and
are
tested
for
impairment
annually
and
whenever
events or
changes in
circumstances
indicate
that impairment
may have
occurred. Our
estimates of
fair value
for
goodwill
impairment
testing
are determined
based on
discounted
cash
flow
model.
use
inputs from
our
long-range
planning
process to
determine
growth
rates
for
sales
and
profits.
also
make
estimates
discount
rates,
perpetuity
growth
assumptions,
market
comparables, and other factors.
We evaluate the
useful lives of our other intangible assets, mainly brands, to
determine if they are finite or indefinite-lived.
Reaching a
determination
useful
life
requires
significant
judgments
and
assumptions
regarding
the
future
effects
obsolescence,
demand,
competition, other economic
factors (such as the
stability of the industry,
known technological advances,
legislative action that
results
in an uncertain or
changing regulatory environment,
and expected changes in
distribution channels), the level
of required maintenance
expenditures,
and
the
expected
lives
other
related
groups
assets.
Intangible
assets
that
are
deemed
have
finite
lives
are
amortized
straight-line basis
over their
useful lives,
generally
ranging from
30 years.
Our estimate
of the
fair value
of our
brand
assets
based
discounted
cash
flow
model
using
inputs
which
include
projected
revenues
from
our
long-range
plan,
assumed royalty rates that could be payable if we did not own the brands, and a discount
rate.
May
had
$22 billion
goodwill
and
indefinite-lived
intangible
assets. While
currently
believe
that
the
fair
value of each
intangible exceeds its carrying
value,
and that those intangibles
will contribute indefinitely
to our cash flows,
materially
different
assumptions
regarding
future performance
of our
businesses
a different
weighted-average
cost
of capital
could
result
material impairment losses
and amortization expense.
performed our fiscal
assessment of our
intangible assets as of
the first
day
the
second
quarter
fiscal
and
determined
there
was
impairment
our
intangible
assets
their
related
fair
values
were
substantially
excess
the
carrying
values,
except
for
the
Uncle
Toby’s
brand
intangible
asset.
addition,
while
having
significant coverage
our fiscal
2025 assessment
date, the
Progresso
Nudges
True
Chews
, and
Kitano
brand intangible
assets had risk of decreasing coverage. We
will continue to monitor these businesses for potential impairment
Income Taxes
apply a more-likely-than-not
threshold to the
recognition and derecognition
of uncertain tax
positions. Accordingly,
we recognize
the amount of
tax benefit that
has a greater
than 50 percent
likelihood of being
ultimately realized upon
settlement. Future
changes in
judgment related
to the
expected ultimate
resolution of
uncertain tax
positions will
affect earnings
in the
period of
such change.
For
more information on income taxes, please see Note 15 to the Consolidated Financial
Statements in Item 8 of this report.
Defined Benefit Pension, Other Postretirement Benefit, and Postemployment
Benefit Plans
We have
defined benefit pension plans covering
many employees in the United States,
Canada, Switzerland, and the United
Kingdom.
We also
sponsor plans that provide
health care benefits to
many of our retirees
in the United States, Canada,
and Brazil. Under certain
circumstances,
also
provide
accruable
benefits,
primarily
severance,
former
and
inactive
employees
the
United
States,
Canada,
and
Mexico.
Please see
Note
the
Consolidated
Financial
Statements
Item
this
report
for
description
our
defined benefit pension, other postretirement benefit, and postemployment
benefit plans.
recognize
benefits
provided
during
retirement
following
employment
over
the
plan
participants’
active
working
lives.
Accordingly,
make
various
assumptions
predict
and
measure
costs
and
obligations
many
years
prior
the
settlement
our
obligations.
Assumptions
that
require
significant
management
judgment
and
have
a material
impact
the
measurement
our
net
periodic
benefit
expense
income
and
accumulated
benefit
obligations
include
the
long-term
rates
return
plan
assets,
the
interest rates used to discount the obligations for our benefit plans, and health
care cost trend rates.
Expected Rate of Return on Plan Assets
Our expected
rate of return
on plan assets
is determined
by our asset
allocation, our
historical long-term
investment performance,
our
estimate of future long-term returns
by asset class (using input from our
actuaries, investment services, and investment
managers), and
long-term inflation
assumptions. We
review this assumption
annually for
each plan; however,
our annual
investment performance
for
one particular year does not, by itself, significantly influence our evaluation.
Our
historical
investment
returns
(compound
annual
growth
rates)
for
our
United
States
defined
benefit
pension
and
other
postretirement benefit
plan assets
were 4.0
percent in
the 1-year
period ended
May 25,
2025, and
returns of
0.2 percent,
4.3 percent,
6.7 percent, and 6.2 percent for the 5, 10, 15, and 20-year periods ended
May 25, 2025.
On a weighted
-average basis, the
expected rate
of return for
all defined
benefit plans
and other postretirement
plans was 7.63
percent
and 7.79
percent for fiscal
percent and 7.34
percent for
fiscal 2024, and
6.70 percent and
6.76 percent for
fiscal 2023. For
fiscal
decreased
our
weighted-average
expected
rate
return
plan
assets
due
increase
bond
asset
allocation
policy for
our principal
defined benefit
pension and
other postretirement
plans in
the United
States to
7.60 percent
and 7.40
percent,
respectively.
Lowering
the
expected
long-term
rate
return
assets
basis
points
would
increase
our
net
pension
and
postretirement
expense by $57 million for
fiscal 2026. A market-related
valuation basis is used to reduce
year-to-year expense volatility.
The market-
related valuation
recognizes certain
investment gains
or losses over
a five-year
period from
the year
in which
they occur.
Investment
gains or
losses for
this purpose
are the difference
between the
expected return
calculated using
the market-related
value of
assets and
the
actual
return
based
the
market-related
value
assets.
Our
outside
actuaries
perform
these
calculations
part
our
determination of annual expense or income.
Discount Rates
estimate
the
service
and
interest
cost
components
the
net
periodic
benefit
expense
for
our
United
States
and
most
our
international
defined
benefit
pension,
other
postretirement
benefit,
and
postemployment
benefit
plans
utilizing
full
yield
curve
approach
by applying
the specific
spot rates
along
the yield
curve used
to determine
the benefit
obligation
to the
relevant projected
cash flows. Our
discount rate assumptions
are determined annually
as of May 31
for our defined
benefit pension, other
postretirement
benefit,
and
postemployment
benefit
plan
obligations.
work
with
our
outside
actuaries
determine
the
timing
and
amount
expected future cash outflows to plan
participants and, using the Aa Above Median
corporate bond yield, to develop a forward
interest
rate curve, including
a margin to
that index based
on our credit
risk. This forward
interest rate curve
is applied to
our expected
future
cash outflows to determine our discount rate assumptions.
Our weighted-average discount rates were as follows:
Defined Benefit
Pension Plans
Other
Postretirement
Benefit Plans
Postemployment
Benefit Plans
Effective rate for fiscal 2026 service costs
Effective rate for fiscal 2026 interest costs
Obligations as of May 31, 2025
Effective rate for fiscal 2025 service costs
Effective rate for fiscal 2025 interest costs
Obligations as of May 31, 2024
Effective rate for fiscal 2024 service costs
Effective rate for fiscal 2024 interest costs
Lowering
the
discount
rates
basis
points
would
increase
our
net
defined
benefit
pension,
other
postretirement
benefit,
and
postemployment benefit plan expense
for fiscal 2026 by approximately
$27 million. All obligation-related
experience gains and losses
are amortized
using
a straight-line
method over
the average
remaining
service period
of active
plan participants
or over
the average
remaining lifetime of the remaining plan participants if the plan is viewed as “all or
almost all” inactive participants.
Health Care Cost Trend
Rates
review our
health care
cost trend
rates annually.
Our review
is based
on data
we collect
about our
health care
claims experience
and information
provided by our
actuaries. This information
includes recent
plan experience,
plan design, overall
industry experience
and projections, and
assumptions used by other
similar organizations.
Our initial health
care cost trend
rate is adjusted
as necessary to
remain consistent
with this
review,
recent experiences,
and short-term
expectations.
Our initial
health care
cost trend
rate assumption
percent for
retirees age
65 and
over and
7.9 percent
for retirees
under age
the end
of fiscal
2025. Rates
are graded
down
annually until
the ultimate
trend rate
percent is
reached in
2034 for
all retirees.
The trend
rates are
applicable for
calculations
only if
the retirees’
benefits increase
result of
health care
inflation. The
ultimate trend
rate is
adjusted annually,
as necessary,
approximate
the
current
economic
view
the
rate
long-term
inflation
plus
appropriate
health
care
cost
premium.
Assumed
trend rates for health care costs have an important effect on the
amounts reported for the other postretirement benefit plans.
Any
arising
health
care
claims cost-related
experience
gain
loss is
recognized
in the
calculation
of expected
future claims.
Once
recognized, experience gains and
losses are amortized using a straight-line
method over the average remaining
service period of active
plan participants
or over
the average
remaining lifetime
of the
remaining plan
participants if
the plan
is viewed
as “all
or almost
all”
inactive participants.
Financial Statement Impact
fiscal
recorded
net
defined
benefit
pension,
other
postretirement
benefit,
and
postemployment
benefit
plan
expense
$9 million
compared to
$11 million
of income
in fiscal
2024 and
$6 million
of income
in fiscal
May 25,
we had
cumulative unrecognized
actuarial net losses of
$2 billion on our
defined benefit pension plans
and cumulative unrecognized
actuarial
net gains of
$209 million on our
postretirement and postemployment
benefit plans. These
net unrecognized actuarial
losses will result
increases
our
future
net
pension
and
postretirement
benefit
expenses
because
they
currently
exceed
the
corridors
defined
GAAP.
Actual
future
net
defined
benefit
pension,
other
postretirement
benefit,
and
postemployment
benefit
plan
income
expense
will
depend on
investment performance,
changes in
future discount
rates, changes
in health care
cost trend
rates, and
other factors
related
to the populations participating in these plans.
RECENTLY
ISSUED ACCOUNTING PRONOUNCEMENTS
In November 2024, the Financial Accounting
Standards Board (FASB)
issued Accounting Standards Update (ASU)
2024-03 requiring
additional
income statement
disclosures. The
ASU requires
the disaggregation
of specific
categories of
expenses underlying
the line
items presented
on the
income statement.
Additionally,
the ASU
requires enhanced
disclosure of
selling expenses.
The requirements
of the ASU are effective for annual periods
beginning after December 15, 2026, and interim periods
within fiscal years beginning after
December
For
annual
reporting
requirements
will
effective
for
our
fiscal
Form
and
interim
reporting
requirements will be
effective beginning
with our first
quarter of fiscal
2029. Early adoption
is permitted and
the amendments should
be applied on a prospective
basis. Retrospective application is permitted.
are in the process of
analyzing the impact of the
ASU on
our related disclosures.
December
the
FASB
issued
ASU
requiring
enhanced
income
tax
disclosures.
The
ASU
requires
disclosure
specific
categories
and
disaggregation
information
the
rate
reconciliation
table.
The
ASU
also
requires
disclosure
disaggregated
information
related
income
taxes
paid,
income
loss
from
continuing
operations
before
income
tax
expense
benefit, and
income tax
expense or benefit
from continuing
operations. The
requirements of
the ASU are
effective for
annual periods
beginning after December 15, 2024,
which for us is fiscal 2026.
Early adoption is permitted
and the amendments should be
applied on
a prospective
basis. Retrospective
application is
permitted.
are in
the process
of analyzing
the impact
of the
ASU on
our related
disclosures.
NON-GAAP MEASURES
have
included
this
report
measures
financial
performance
that
are not
defined
GAAP.
believe
that
these
measures
provide useful information to investors and include these measures in other
communications to investors.
For each
of these
non-GAAP financial
measures, we
are providing
below a
reconciliation of
the differences
between the
non-GAAP
measure and the most
directly comparable GAAP
measure, an explanation
of why we believe the
non-GAAP measure provides
useful
information to
investors, and
any additional
material purposes
for which
our management
or Board
of Directors
uses the
non-GAAP
measure. These non-GAAP measures should be viewed in addition
to, and not in lieu of, the comparable GAAP measure.
Significant Items Impacting Comparability
Several
measures
below
are
presented
adjusted
basis.
The
adjustments
are
either
items
resulting
from
infrequently
occurring
events or items that, in management’s
judgment, significantly affect the year-to-year
assessment of operating results.
The following are descriptions of significant items impacting comparability
of our results.
Divestiture gain
Divestiture gain
related to
the sale of
our Canada
yogurt business
in fiscal
2025. Please
refer to
Note 3
to the
Consolidated Financial
Statements in Item 8 of this report.
Restructuring and transformation charges
Restructuring
and
transformation
charges
related
to global
transformation
actions and
previously
announced
restructuring actions
fiscal 2025. Restructuring
charges related to
commercial strategy restructuring
actions and previously
announced restructuring
actions
in fiscal 2024. Please refer to Note 4 to the Consolidated Financial Statements
in Item 8 of this report.
Transaction costs
Fiscal 2025
transaction costs
related to
the definitive
agreements to
sell our
North American
yogurt businesses
and the
Whitebridge
Pet Brands
acquisition.
Transaction
costs primarily
related to
the acquisition
pet food
business in
Europe in
fiscal 2024.
Please
refer to Note 3 to the Consolidated Financial Statements in Item 8 of this report.
CPW asset impairments
CPW impairment charges related to certain long-lived
assets recorded in fiscal 2025.
Mark-to-market effects
Net mark-to-market
valuation of
certain commodity
positions recognized
in unallocated
corporate items.
Please refer to
Note 8 to
the
Consolidated Financial Statements in Item 8 of this report.
Acquisition integration costs
Integration
costs
related
the
acquisitions
Whitebridge
Pet
Brands
and
pet
food
business
Europe
recorded
fiscal
Integration
costs
primarily
resulting
from
the
acquisition
TNT
Crust
fiscal
Please
refer
Note
the
Consolidated
Financial Statements in Item 8 of this report.
Capital appreciation paid on GMC Class A Interests
Capital account
appreciation
attributable
and paid
to the
third-party
holder of
GMC Class
A Interests
in fiscal
Please refer
Note 10 to the Consolidated Financial Statements in Item 8 of this report.
Investment activity, net
Valuation
adjustments of certain
corporate investments in
fiscal 2025. Valuation
adjustments and the
gain on sale
of certain corporate
investments in fiscal 2024.
Project-related costs
Restructuring
initiative
project-related
costs related
to previously
announced
restructuring
actions recorded
in fiscal
2025 and
fiscal
2024. Please refer to Note 4 to the Consolidated Financial Statements in
Item 8 of this report.
Goodwill and other intangible assets impairments
Non-cash impairment
charges related
to our Latin
America reporting unit
goodwill and our
Top
Chews
True Chews
, and
EPIC
brand
intangible assets in fiscal 2024. Please refer to Note 6 to the Consolidated Financial
Statements in Item 8 of this report.
Legal recovery
Legal recovery recorded in fiscal 2024.
Product recall, net
Recoveries recorded in fiscal 2024 related to the fiscal 2023 voluntary recall
of certain international
Häagen-Dazs
ice cream products,
net of costs incurred.
Organic Net Sales Growth Rates
provide organic
net sales
growth rates
for our
consolidated net
sales and
segment net
sales. This
measure is
used in
reporting to
our
Board
Directors
and
executive
management
and
component
the
measurement
our
performance
for
incentive
compensation
purposes.
believe that
organic net
sales growth
rates provide
useful information
to investors
because they
provide
transparency
to underlying
performance
in our
net sales
by excluding
the effect
that foreign
currency
exchange rate
fluctuations,
well
acquisitions,
divestitures,
and
week,
when
applicable,
have
year-to-year
comparability.
reconciliation
these
measures to reported
net sales growth
rates, the relevant
GAAP measures, are
included in our
Consolidated Results of
Operations and
Results of Segment Operations discussions in the MD&A above.
Adjusted Operating Profit and Related Constant-currency Growth
Rate
This measure is used in reporting
to our Board of Directors and
executive management and as a
component of the measurement of
our
performance for
incentive compensation purposes.
believe that
this measure provides
useful information
to investors because
the
operating
profit
measure
use
evaluate
operating
profit
performance
comparable
year-to-year
basis.
Additionally,
the
measure
evaluated
constant-currency
basis
excluding
the
effect
that
foreign
currency
exchange
rate
fluctuations
have
year-to-year comparability given the volatility in foreign
currency exchange rates.
Our adjusted operating profit growth on a constant-currency basis is calculated
as follows:
Fiscal Year
Change
Operating profit as reported
Divestiture gain
Restructuring and transformation charges
Transaction costs
Mark-to-market effects
Acquisition integration costs
Investment activity, net
Project-related costs
Goodwill and other intangible assets impairments
Legal recovery
Product recall, net
Adjusted operating profit
Foreign currency exchange impact
Flat
Adjusted operating profit growth, on a constant-currency basis
Note: Table may not foot due to rounding.
For more information on the reconciling items, see the Significant Items Impacting Comparability section above.
Adjusted Diluted EPS and Related Constant-currency Growth Rate
This measure
is used in
reporting to
our Board of
Directors and executive
management.
believe that
this measure provides
useful
information to
investors because it
is the profitability
measure we use
to evaluate earnings
performance on
a comparable year-to-year
basis.
The reconciliation of our GAAP measure, diluted EPS, to adjusted diluted
EPS and the related constant-currency growth rate follows:
Fiscal Year
Per Share Data
Change
Diluted earnings per share, as reported
Divestiture gain
Restructuring and transformation charges
Transaction costs
CPW asset impairments
Mark-to-market effects
Acquisition integration costs
Capital appreciation paid on GMC Class A Interests
Investment activity, net
Goodwill and other intangible assets impairments
Legal recovery
Product recall, net
Adjusted diluted earnings per share
Foreign currency exchange impact
Flat
Adjusted diluted earnings per share growth, on a constant-currency basis
Note: Table may not foot due to rounding.
For more information on the reconciling items, see the Significant Items Impacting Comparability section above.
See our reconciliation
below of the effective
income tax rate as
reported to the adjusted
effective income tax
rate for the tax
impact of
each item affecting comparability.
Free Cash Flow Conversion Rate
believe
this
measure
provides
useful
information
investors
because
important
for
assessing
our
efficiency
converting
earnings
cash
and
returning
cash
shareholders.
The
calculation
free
cash
flow
conversion
rate
and
net
cash
provided
operating activities conversion rate, its equivalent GAAP measure, follows:
In Millions
Fiscal 2025
Net earnings, including earnings attributable to noncontrolling interests, as reported
Divestiture gain, net of tax
Restructuring and transformation charges, net of tax
Transaction costs, net of tax
CPW asset impairments, net of tax
Mark-to-market effects, net of tax
Acquisition integration costs, net of tax
Investment activity, net,
net of tax
Project-related costs, net of tax
Adjusted net earnings, including earnings attributable to noncontrolling
interests
Net cash provided by operating activities
Purchases of land, buildings, and equipment
Free cash flow
Net cash provided by operating activities conversion rate
Free cash flow conversion rate
Note: Table may not foot due rounding.
For more information on the reconciling items, see the Significant Items Impacting Comparability section above.
See our reconciliation
below of the effective
income tax rate as
reported to the
adjusted effective income
tax rate for the
tax impact of
each item affecting comparability.
Adjusted Operating Profit as a Percent of Net Sales (Adjusted Operating Profit
Margin)
We believe
this measure provides useful information
to investors because it is important
for assessing our operating profit margin
comparable year-to-year basis.
Our adjusted operating profit margins are calculated as follows:
Fiscal Year
Percent of Net Sales
Operating profit as reported
Divestiture gain
Restructuring and transformation charges
Transaction costs
Mark-to-market effects
Acquisition integration costs
Investment activity, net
Project-related costs
Goodwill and other intangible assets impairments
Legal recovery
Product recall, net
Adjusted operating profit
Note: Table may not foot due to rounding.
For more information on the reconciling items, see the Significant Items Impacting Comparability section above.
Adjusted Effective Income Tax
Rates
believe
this
measure
provides
useful
information
investors
because
presents
the
adjusted
effective
income
tax
rate
comparable year-to-year basis.
Adjusted effective income tax rates are calculated as follows:
Fiscal Year
Ended
In Millions
(Except Per Share Data)
Pretax
Earnings (a)
Income
Taxes
Pretax
Earnings (a)
Income
Taxes
As reported
Divestiture gain
Restructuring and transformation charges
Transaction costs
Mark-to-market effects
Acquisition integration costs
Investment activity, net
Project-related costs
Goodwill and other intangible assets impairments
Legal recovery
Product recall, net
As adjusted
Effective tax rate:
As reported
As adjusted
Sum of adjustments to income taxes
Average number
of common shares - diluted EPS
Impact of income tax adjustments on adjusted diluted EPS
Note: Table may not foot due to rounding.
Earnings before income taxes and after-tax earnings from joint ventures.
For more information on the reconciling items, see the Significant Items Impacting Comparability section above.
Constant-currency After-Tax
Earnings from Joint Ventures
Growth Rate
believe that
this measure
provides useful
information to
investors because
it provides
transparency to
underlying performance
our joint
ventures by
excluding the
effect
that foreign
currency exchange
rate fluctuations
have on
year-to-year
comparability given
volatility in foreign currency exchange markets.
After-tax earnings from joint ventures growth rate on
a constant-currency basis are calculated as follows:
Fiscal 2025
Percentage change in after-tax earnings from joint ventures as reported
Impact of foreign currency exchange
pts
Percentage change in after-tax earnings from joint ventures on
a constant-currency basis
Note: Table may not foot due to rounding.
Net Sales Growth Rate for Canada Operating Unit on a Constant-currency
Basis
believe
this
measure
our
Canada
operating
unit
net
sales
provides
useful
information
investors
because
provides
transparency to
the underlying
performance for
the Canada operating
unit within our
North America Retail
segment by
excluding the
effect
that
foreign
currency
exchange
rate
fluctuations
have
year-to-year
comparability
given
volatility
foreign
currency
exchange markets.
Net sales growth rate for our Canada operating unit on a constant-currency
basis is calculated as follows:
Fiscal 2025
Percentage change in net sales as reported
Impact of foreign currency exchange
pts
Percentage change in net sales on a constant-currency basis
Note: Table may not foot due to rounding.
Constant-currency Segment Operating Profit Growth Rates
believe that
this measure
provides useful
information to
investors because
it provides
transparency to
underlying performance
our
segments
excluding
the
effect
that
foreign
currency
exchange
rate
fluctuations
have
year-to-year
comparability
given
volatility in foreign currency exchange markets.
Our segments’ operating profit growth rates on a constant-currency
basis are calculated as follows:
Fiscal 2025
Percentage Change
in Operating Profit
as Reported
Impact of Foreign
Currency Exchange
Percentage Change
in Operating Profit
on Constant-
Currency Basis
North America Retail
Flat
International
pts
North America Pet
Flat
North America Foodservice
Flat
Note: Table may not foot due to rounding.
Forward-Looking Financial Measures
Our fiscal
2026 outlook
for organic
net sales
growth, constant-currency
adjusted operating
profit and
adjusted diluted
EPS, and
free
cash
flow
conversion
are
non-GAAP
financial
measures
that
exclude,
have
otherwise
been
adjusted
for,
items
impacting
comparability,
including
the
effect
foreign
currency
exchange
rate
fluctuations,
restructuring
and
transformation
charges,
acquisition
transaction
and
integration costs,
acquisitions,
divestitures,
mark-to-market
effects,
and
week.
are not
able to
reconcile
these
forward-looking
non-GAAP
financial
measures
their
most
directly
comparable
forward-looking
GAAP
financial
measures
without
unreasonable
efforts
because
are
unable
predict
with
reasonable
degree
certainty
the
actual
impact
changes
foreign
currency
exchange
rates
and
commodity
prices
the
timing
impact
acquisitions,
divestitures,
and
restructuring
and transformation
actions throughout
fiscal 2026.
The unavailable
information could
have a
significant impact
on our
fiscal 2026 GAAP financial results.
For fiscal 2026, we
currently expect: the net impact
from foreign currency exchange
rates (based on a blend
of forward and forecasted
rates and hedge
positions), acquisitions and
divestitures completed
prior to fiscal
2026 and those
expected to close
in fiscal 2026,
and
a 53rd week
to reduce net
sales growth by
approximately 4 percent;
foreign currency
exchange rates to
have an immaterial
impact on
adjusted
operating
profit
and
adjusted
diluted
EPS
growth;
and
restructuring
and
transformation
charges
and
transaction
and
acquisition integration costs related to actions previously announced
to total approximately $90 million to $95 million.
