A Century-Old Dividend Streak Confronts Mounting Business Challenges

The packaged food sector is undergoing significant transformation, and General Mills finds itself at the center of this shift. The consumer goods behemoth is responding with plant closures and cost-saving initiatives, yet recent financial disclosures paint a concerning picture. The central question for investors is whether this 127-year-old dividend payer can preserve its legacy or if it faces a fundamental decline.

Quarterly Results Disappoint Amid Asset Divestiture

Financial data released on September 17, 2025, underscores the company’s structural difficulties. Revenue fell 7 percent to $4.5 billion, while adjusted operating profit contracted by 18 percent. Although adjusted earnings per share of $0.86 surpassed market forecasts, a headline surge to $2.22 per share is misleading. This apparent profit jump is primarily attributable to the $1.05 billion divestiture of its US yogurt operations.

Organic sales declined by 3 percent, highlighting persistent pressures from shifting consumer preferences and ongoing trade disputes. The full-year 2026 outlook provides little encouragement, with the company projecting organic sales growth in a range of -1 percent to +1 percent, coupled with an anticipated earnings decrease of 10 to 15 percent.

Manufacturing Shutdowns and a Multi-Million Dollar Overhaul

As part of its “Global Transformation Initiative,” General Mills is implementing severe cost-cutting measures. The company plans to shutter three production facilities in Missouri—one pizza crust plant and two pet food factories—by mid-2026. These decisive actions form a component of a broader $130 million program designed to yield $100 million in annual savings and generate over $600 million in productivity gains by the 2026 fiscal year.

Should investors sell immediately? Or is it worth buying General Mills?

The financial burden of this restructuring is substantial. The corporation will absorb approximately $82 million in related costs, which includes $64 million for asset write-offs and $18 million allocated for employee severance packages. The majority of these charges are scheduled for the second quarter of 2026, creating a significant drag on future earnings.

Dividend Consistency Amidst Operational Headwinds

Despite the bleak operational forecast, General Mills remains committed to its shareholder returns. A quarterly dividend of $0.61 per share, approved on September 29, 2025, extends its remarkable 127-year record of uninterrupted payments. However, this loyalty to income-focused investors stands in stark contrast to the underlying business challenges.

The company’s shares are trading near their annual low and have depreciated more than 30 percent since the start of the year. While the stock appears reasonably valued with a P/E ratio in the 13-14 range, the critical uncertainty remains: Is this valuation sufficient to attract investors in an environment of stagnant growth and declining profitability?

The strategic overhaul at General Mills is undoubtedly necessary, but its execution is proving painful. Whether this multi-million dollar transformation can steer the consumer goods giant back to a sustainable growth trajectory or merely postpone an inevitable decline will become clearer in the upcoming financial quarters.