General Mills Q2 2026: Portfolio Reshaping Drives Transitional Results

General Mills, the multinational food giant behind household staples like Cheerios, Häagen-Dazs, and Blue Buffalo, is currently navigating a significant transitional period. A look at their latest 10-Q filing for the quarter ended November 23, 2025, reveals a company actively reshaping its portfolio, trading dairy for pet food, and absorbing the "messy" financial impacts that come with such major strategic shifts.

The headline numbers for the second quarter show a contraction: Net Sales fell 7% to $4.86 billion, and Operating Profit dropped 32% to $728 million. However, these figures require unpacking to understand the strategic maneuvers occurring beneath the surface.

Visualizing the Quarter

To help visualize how revenue trickled down to the bottom line this quarter, the following flow diagram illustrates the movement from Net Sales to Net Earnings:

Portfolio Reshaping: Yogurt Out, Pet Food In

The primary driver of the revenue decline is the divestiture of the North American yogurt business (including brands like Yoplait and Liberté in the U.S. and Canada). While this sale generated a massive one-time gain earlier in the fiscal year (visible in the six-month results), the quarterly results simply reflect the loss of that revenue stream without the accompanying one-time cash infusion on the income statement.

Conversely, General Mills is doubling down on its "North America Pet" segment. The quarter reflects the acquisition of Whitebridge Pet Brands (maker of Tiki Pets). This strategic pivot is evident in the segment performance:

• North America Retail: Net sales dropped 13%, largely due to the absence of the yogurt business.
• North America Pet: Net sales surged 11%, driven by the new acquisition, validating the company's shift toward the higher-growth pet food category.

Impairments and Restructuring

Beyond the buying and selling of brands, profitability took a hit due to significant one-time charges. General Mills recorded a $52.9 million non-cash impairment charge related to its Uncle Toby’s brand.

Financial Jargon Check: An Impairment Charge occurs when a company determines that an asset (like a brand name or goodwill) is worth less on the market than what is listed on the balance sheet. In this case, General Mills lowered its future sales and profit projections for Uncle Toby's, necessitating the write-down.

Additionally, the company launched a new multi-year organizational initiative to streamline its supply chain, resulting in $50.3 million in restructuring charges for the quarter. While these costs drag down current earnings (contributing to the 45% drop in diluted EPS to $0.78), they are ostensibly designed to improve margins in the long run.

Organic Performance

Stripping away the noise of acquisitions and divestitures reveals a softer underlying demand environment. Organic Net Sales—a metric that removes the impacts of currency fluctuations and M&A—decreased by 1%.

This decline was driven entirely by "Net Price Realization and Mix" (down 2 points), while organic volume remained flat. This suggests that the pricing power consumer packaged goods (CPG) companies enjoyed during high-inflation periods has evaporated. General Mills is seemingly investing more in trade promotion or seeing a shift toward lower-priced products to maintain volume in a consumer-constrained environment.

Conclusion

General Mills is in the midst of a heavy construction phase. The company is shedding lower-growth assets (yogurt) to fund higher-growth opportunities (premium pet food) and paying the upfront costs for supply chain efficiency. While the immediate result is a quarter of shrinking sales and profits, the 10-Q highlights a deliberate strategy to position the portfolio for higher long-term growth, albeit with some near-term financial friction.