General Mills expands pet food portfolio with fresh offerings

MINNEAPOLIS - General Mills (NYSE: GIS), a $29 billion market cap consumer staples company trading near its 52-week low of $52.39, is launching two new initiatives in its North America Pet segment to address changing consumer preferences in the pet food market, according to a company press release. According to InvestingPro data, the company maintains strong profitability with a P/E ratio of 11.59.

Blue Buffalo, which General Mills describes as a natural pet food brand in the U.S., will enter the fresh pet food category with "Love Made Fresh." The product line will feature multiple formats and recipes designed to be used alone or combined with dry dog food. The company plans a nationwide store rollout later this year, positioning Blue Buffalo as a brand offering solutions across dry, wet, and fresh pet food categories. This expansion comes as General Mills maintains its impressive 55-year streak of consecutive dividend payments, currently offering a 4.53% yield.

Additionally, General Mills will introduce Edgard & Cooper, a European premium pet food brand it acquired in April 2024, to the U.S. market in July through an exclusive partnership with PetSmart. The U.S. launch will include dry food, wet food, and treats made with ingredients like fresh chicken, venison, and duck combined with fruits and vegetables.

"Pet parents are redefining how they feed and treat their pets, and at General Mills, we’re listening and continuing to bring trusted, high-quality natural solutions to a rapidly evolving marketplace," said Liz Mascolo, segment president of North America Pet at General Mills.

The company stated these moves align with its "Accelerate strategy" and position it to compete in the $3 billion fresh pet food sub-category. General Mills reported fiscal 2024 net sales of $20 billion, with an additional $1 billion from non-consolidated joint venture net sales. InvestingPro analysis suggests the stock is currently undervalued, with multiple additional insights available in the comprehensive Pro Research Report, which provides deep-dive analysis of General Mills and 1,400+ other top stocks.

In other recent news, General Mills has announced a comprehensive cost-reduction plan, aiming for $130 million in savings by fiscal 2028, primarily through enhancing business processes and streamlining operations. This initiative is expected to incur significant charges, with $70 million anticipated in the fourth quarter of fiscal 2025, mostly related to severance expenses. On the earnings front, TD Cowen has projected a decline in General Mills’ operating profit by 12% for fiscal year 2026, citing inflation and the impact of the Yoplait divestiture. BofA Securities has lowered its fiscal year 2026 earnings per share forecast to $3.80, reflecting the upcoming divestiture of General Mills’ U.S. yogurt business. Goldman Sachs downgraded General Mills from Buy to Neutral, adjusting the price target to $58, due to rising cost pressures and the need for evidence of recovery. Additionally, General Mills has appointed Dana McNabb as the new Group President, expanding her role to include the North America Pet segment, highlighting the company’s focus on growth in the pet food category. These developments indicate a strategic shift as the company adapts to evolving market dynamics and seeks to enhance operational efficiency.

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