General Mills Inc. GIS has completed the sale of its Canadian Yogurt business to Sodiaal, marking a significant step in the company's ongoing portfolio reshaping strategy. This divestiture includes the Canada operations of several well-known yogurt brands, including Yoplait and Liberte, two key players in the Canada yogurt market. 

The sale encompasses a manufacturing facility in Saint-Hyacinthe, Quebec. This move is in line with General Mills' broader efforts to streamline its operations and focus on high-growth areas of its business. 

General Mills confirmed that the sale of its U.S. Yogurt business to Lactalis is progressing as expected and is scheduled to close in calendar year 2025. The transaction remains subject to the completion of regulatory approvals and other customary closing conditions, which are expected to be finalized later this year.

GIS Stock Past-Year Performance

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What to Expect From General Mills in FY25?

As a result of these recent portfolio changes, including the Canadian Yogurt business sale and the closure of the North American Whitebridge Pet Brands acquisition, General Mills has revised its fiscal 2025 outlook. The company projects a decline in adjusted earnings per share (EPS) between 2% and 4% in constant currency compared with its previous forecast of a decline of 1-3%.

This adjustment reflects the impacts of higher interest expenses from the debt General Mills issued to finance the Whitebridge acquisition. The acquisition of North American Whitebridge Pet Brands, which aligns with General Mills' strategy to diversify its business further, has led to increased financial costs, contributing to the revised EPS projection.

However, GIS maintains its expectations for continued organic net sales growth for the year, which reflects the resilience of its core brands and business segments. 

The company has indicated that the recent restructuring activities will not materially affect its outlook for constant-currency adjusted operating profit growth or free cash flow conversion. These areas are expected to remain in line with previous guidance, underscoring the company’s solid operational foundation despite the portfolio adjustments.

GIS’s Strategic Focus & Market Share Gains

Despite an uncertain macroeconomic environment impacting consumers across its core markets, General Mills is committed to delivering exceptional experiences through its leading food brands. This approach has led to steady progress in volume growth and improved market share trends over time. 

For the first half of fiscal 2025, the company achieved 1% growth in organic pound volume, marking a 4-point improvement from fiscal 2024. General Mills successfully grew or maintained dollar market share in 38% of its priority businesses in the second quarter of fiscal 2025, a notable improvement over the fiscal 2024 reported level. 

To support these gains, General Mills made targeted investments in promotional activities, exceeding its original plans in select categories. This investment strategy aims to provide greater value for consumers while ensuring continued brand building above fiscal 2024 levels, strengthening the company’s competitive position.

Wrapping Up

General Mills’ strategic portfolio reshaping, including the sale of its Canadian Yogurt business and the Whitebridge acquisition, aims to enhance growth and focus on high-potential areas. While the company revised its fiscal 2025 bottom-line outlook, it remains confident in its ability to drive organic sales growth and maintain strong operational performance moving forward.

Shares of this Zacks Rank #3 (Hold) stock have lost 4.1% over the past year, outperforming the Food – Miscellaneous industry's 11.1% decline.

Key Picks

Here, we have highlighted three better-ranked stocks, namely United Natural Foods, Inc. UNFI, Freshpet Inc. FRPT and US Foods Holding Corp. USFD.

United Natural Foods is the leading distributor of natural, organic and specialty food and non-food products in the United States and Canada. It presently flaunts a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for UNFI's current fiscal-year earnings and sales indicates growth of 442.9% and 0.3%, respectively, from the year-ago reported figures. UNFI delivered a trailing four-quarter average earnings surprise of 553.1%.

Freshpet manufactures and markets natural fresh foods, refrigerated meals and treats for dogs and cats in the United States and Canada. It sports a Zacks Rank of 1 at present. 

The Zacks Consensus Estimate for Freshpet’s current financial-year earnings and sales indicates growth of 228.6% and 27.2%, respectively, from the year-ago reported figures. FRPT delivered a trailing four-quarter average earnings surprise of 144.5%.

US Foods is a foodservice distributor. The company currently carries a Zacks Rank #2 (Buy). 

USFD delivered a negative trailing four-quarter earnings surprise of 0.4%, on average. The Zacks Consensus Estimate for US Foods’ current financial-year earnings and sales indicates growth of 18.6% and 6.4%, respectively, from the year-ago reported figures.

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