General Mills Sees Stressed Consumers, Booming Cat Spending
General Mills beat earnings estimates but warns the consumer squeeze is here to stay — while pet food, especially for cats, is surging.
General Mills, the packaged food giant behind brands like Cheerios, delivered a clear-eyed warning this week: American consumers remain under serious financial pressure, and the company is building its entire fiscal year strategy around that reality rather than betting on any near-term relief. The earnings report, which beat Wall Street expectations with EPS of 95 cents against an 80-cent consensus, came with a blunt outlook from the executive suite that left little room for optimism.
COO Dana McNabb described shoppers as increasingly calculated — hunting for promotions, trading down on pack sizes, and switching between retail channels to stretch their dollars. CEO Jeff Harmening doubled down, stating twice that General Mills is "not anticipating an improved consumer environment" and plans to "make our own success" rather than wait for conditions to turn. The company's guidance for fiscal 2027 calls for flat revenue, underscoring how little recovery is baked into the plan.
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The company's candor reflects its unusual vantage point into middle- and lower-income households — a segment where stress is more acute than broader aggregate spending data suggests. General Mills has already been fighting a multi-year battle against store-brand competition, and its earlier attempt to push price hikes on flagship products triggered a consumer revolt and a sharp stock sell-off. The company has since reversed course, cutting prices to defend volume.
On inflation, management projects input cost increases of 4% to 5%, modeled on oil near $100 per barrel — though with oil prices declining, they expect to land at the lower end of that range. McNabb acknowledged the K-shaped economy directly, noting that a portion of wealthier consumers will keep spending freely while lower- and middle-income households eat at home more and stick to staples. At-home meal occasions held steady at roughly 86%.
One standout bright spot: pet food, and cats in particular. "Cat growth is on fire," McNabb said, pointing to a sustained humanization trend among pet owners — many of whom are forgoing having children and redirecting spending toward their animals. The detail captures something broader: in a stressed economy, companies are hunting for pockets of durable demand wherever they can find them, while quietly abandoning any assumption that the consumer will bounce back soon. Continue reading at Forexlive.
