General Mills Sees Stressed Consumer Spending Big on Cats
General Mills beat earnings estimates but warns the squeezed consumer isn't recovering — while pet food, especially cats, is booming.
General Mills delivered a surprise earnings beat this week — 95 cents per share against an 80-cent consensus — but the packaged-food giant's message to investors was stark: the American consumer is under persistent financial pressure, and the company is no longer counting on a turnaround to drive growth. COO Dana McNabb said the company expects shoppers to keep hunting for deals, shifting between pack sizes and retail channels, and prioritizing value above all else heading into fiscal 2027.
CEO Jeff Harmening doubled down on that cautious outlook, stating twice during the earnings call that General Mills is "not anticipating an improved consumer environment" and intends to "make our own success this year." The company guided revenue flat for FY2027 after posting a modest 1% year-over-year sales increase — a reversal from recent declines but hardly a sign of robust demand. On inflation, General Mills is projecting input cost increases of 4–5%, modeled on oil near $100 per barrel, though recent crude declines may push results toward the lower end of that range.
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General Mills offers a particularly clear window into middle- and lower-income households — segments often obscured by headline spending data skewed toward wealthier consumers. McNabb acknowledged the K-shaped economy explicitly, noting that lower-income households ate at home slightly more and spent marginally more on staples, though she characterized the shift as modest. At-home eating held steady at roughly 86%. The company's strategy now spans three tiers: opening price points and smaller pack options for budget-stretched shoppers, large value packs for families, and premium functional products for higher-income buyers.
General Mills has wrestled for years with consumers defecting to store brands, a trend that accelerated after the company pushed aggressive post-pandemic price hikes on flagship brands like Cheerios. Shopper backlash hammered its shares. The company has since pivoted, cutting prices to compete on volume — a costly but necessary concession to market realities.
Amid the gloom, one category is surging: pet food, and cats in particular. "Our humanization trend in pet will continue and cats are on fire, cat growth is on fire," McNabb said — a reflection of consumers who are opting out of parenthood and channeling discretionary spending toward pets instead. Continue reading at Forexlive.
