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(Sharecast News) - General Mills cut its full-year 2026 sales and profit outlook on Tuesday as it updated investors on its six-year-old 'Accelerate' strategy, citing weak consumer sentiment and a slower, more costly recovery in volumes than previously expected.
Speaking at the Consumer Analyst Group of New York (CAGNY) conference, chairman and chief executive Jeff Harmening said the company had reshaped nearly a third of its portfolio since launching the strategy in 2021, built out digital capabilities and delivered cost efficiencies.
However, a "volatile" consumer backdrop has weighed on category growth and purchasing patterns, prompting a downgrade to guidance.
The company said it now expected 2026 organic net sales to decline 1.5% to 2%, compared with prior guidance of down 1% to up 1%, putting it on course for a third consecutive year of sales declines.
Adjusted operating profit and adjusted diluted earnings per share were forecast to fall 16% to 20% in constant currency, versus a previous expectation of a 10% to 15% decline.
General Mills maintained its outlook for free cash flow conversion of at least 95% of adjusted after-tax earnings.
According to MarketWatch, since the Accelerate strategy was unveiled in February 2021, General Mills stock has declined 15.4%, compared with gains of 36.3% for the Consumer Staples Select Sector SPDR ETF and 73.7% for the S&P 500 over the same period.
Executives reiterated that restoring organic sales growth hinged on enhancing "remarkability" across the company's brands, which include Cheerios, Pillsbury, Hagen-Dazs and Progresso.
Management said it was investing in product innovation, packaging, brand communication and omnichannel execution, with a focus on consumer trends such as bold flavours, familiar favourites and better-for-you attributes like protein and fibre.
The company said it expected roughly a 25% increase in net sales from new products in the 2026 financial year.
General Mills also highlighted investments in supply-chain digitisation, data-driven marketing and revenue management to improve efficiency and agility.
Since 2019, the company has returned more than $14bn to shareholders through dividends and share repurchases.
Harmening told investors that while the recovery could take longer than anticipated, the company remained confident that strengthening brand competitiveness through its "Remarkability playbook" was the best path to restoring consistent and profitable organic growth in a challenging consumer environment.
At 0906 ET (1406 GMT), shares in General Mills were down 3.39% in premarket trading in New York at $46.69.
Reporting by Josh White for Sharecast.com.