CHARGED ALPHA · RESEARCH PACKET
Companion to the Q1 FY2027 earnings episode · published September 23, 2026
Flat organic sales are a start, but Retail and Pet still lost $99M of profit. Smaller divisions offset only $18.3M. Three explicit valuation routes cluster near $37, leaving little cushion at $35.74. Better volume, margin and cash conversion must make stabilization profitable.
Analyst scenarios, not company guidance. Values are per share.
| Scenario | Probability | 12-month value | vs $35.74 | What has to happen | The arithmetic |
|---|---|---|---|---|---|
| Bear | 30% | $27.00 | −24% | Domestic volume and cash recovery disappoint. | $2.70 EPS × 10 = $27. |
| Base | 50% | $37.00 | +4% | Guidance midpoint delivered; recovery remains modest. | $3.10 × 12 = $37.20, rounded to $37. |
| Bull | 20% | $47.00 | +32% | Volume and margin recovery lifts earnings above guidance. | $3.35 × 14 = $46.90, rounded to $47. |
| Computed weighted value: 30% × $27 + 50% × $37 + 20% × $47 = $36. Dividends are excluded from scenario price returns. | |||||
| Signpost | Now (Q1 FY2027) | Green if | Red if | Next check |
|---|---|---|---|---|
| Retail organic sales | −3% | ≥0% | ≤−4% | Review by Dec 31, 2026 |
| Pet organic volume | −6 pts | ≥−2 pts | ≤−6 pts | Review by Dec 31, 2026 |
| Pet segment margin | 16.2% | ≥17% | <15% | Review by Dec 31, 2026 |
| Adjusted operating margin | 14.4% | ≥15% | <13% | Review by Dec 31, 2026 |
| FY2027 adjusted EPS | $3.00–$3.20 guidance | ≥$3.10 | <$3.00 | Review by Jul 31, 2027 |
| FY2027 FCF conversion | ~95% target | ≥95% | <85% | Review by Jul 31, 2027 |
| Net debt | $13,182.5M | <$13,000M | >$13,700M | Review by Dec 31, 2026 |
Thresholds are our dated decision rules, not new company guidance. Quarter-to-quarter margin checks require seasonal context. A BUY also requires valuation discipline; current mechanical 20% margin-of-safety reference is $29.60 with the thesis intact.
Our call is HOLD with conviction three out of five and a base value of $37 per share. General Mills' first quarter supports the possibility of stabilization, but it does not yet establish profitable growth. The distinction matters because the largest domestic businesses still carry the earnings burden. Flat company organic sales can coexist with declining volume, weaker segment margins and an unchanged full-year earnings reset. A low headline multiple is therefore a starting point for investigation, not the conclusion.
The reference price is the saved September 23 intraday FMP quote of $35.74. It is a snapshot, not a closing price or an executable offer. That snapshot shows a 0.82 percent gain from the previous close, while the independently fetched daily-history row was still changing. We do not call the unfinished September 23 session a completed earnings reaction. Historical reaction bars use the closing price immediately before the reporting date and the close on that date, or the next available trading date. They describe co-movement around the announcement and do not isolate causality.
The older GIS episode centered on a large price decline and dividend yield. This packet instead tests the composition of the operating recovery: Retail and Pet lost a combined $99 million of segment profit, while International and Foodservice recovered only $18.3 million. That imbalance is the central question behind the apparently steady organic-sales headline. The probability-weighted value is $36, slightly below the base value and close to the quote. Investors are being offered exposure to recovery, but the modeled asymmetry is not yet compelling enough for a BUY.
Use the price chart alongside the operating evidence rather than as a prediction. The $37 line is an analytical reference from three valuation routes. It is not a support level, a broker target copied into our call, or a claim that the market must return there. With high operating uncertainty, we require a meaningful discount or measurable improvement in the underlying business before increasing conviction.
| Reference item | Value | Interpretation |
|---|---|---|
| Quote | $35.74 | September 23 intraday snapshot |
| 52-week range | $31.75–$51.33 | FMP quote range |
| Quoted market capitalization | $19,074.7M | Vendor spot-share convention |
| Diluted shares used in valuation | 537.9M | Latest reported quarterly average; forecast assumption |
| Forward earnings multiple | 11.53× | $35.74 / $3.10 modeled EPS |
| Model upside | 3.5% | Price appreciation to base value, excludes dividends |
Net sales were $4,389.5 million, down 2.8 percent from $4,517.5 million. Company organic sales were approximately unchanged. The release attributes the reported decline principally to the U.S. yogurt divestiture, which also changes the business mix. Organic figures help isolate continuing operations, but they are rounded management measures and their components do not always add exactly. Company organic volume contributed a negative point, while the rounded organic price-and-mix contribution was flat.
Adjusted EPS of $0.75 exceeded the saved FMP consensus of $0.717 by 4.6 percent. Revenue exceeded the $4,351.353 million consensus by 0.9 percent. Those are real positive surprises relative to the retrieved provider snapshot, although that snapshot does not establish exactly when each analyst last updated an estimate. A modest beat does not erase the year-over-year decline: adjusted operating profit fell 10.9 percent and adjusted EPS fell 12.8 percent. It is entirely possible to beat expectations while the operating run rate deteriorates.
The headline GAAP comparison is unusually misleading on its own. Prior-year operating profit included a $1,054.4 million divestiture gain. Comparing this quarter's $633.6 million with last year's $1,725.8 million produces a dramatic reported decline, but much of it is the absence of that disposal gain. The recurring comparison is closer to $634.0 million versus $711.2 million of adjusted operating profit. We show both and retain the reconciliation rather than choosing whichever version flatters the thesis.
Management reaffirmed organic sales of negative 1.5 to positive 0.5 percent, constant-currency adjusted operating-profit declines of 8 to 13 percent, adjusted EPS of $3.00 to $3.20 and approximately 95 percent free-cash-flow conversion of adjusted after-tax earnings for fiscal 2027. These are full-year targets. They are not quarterly promises, and they are not GAAP guidance. The company expects the combined effect of divestitures, currency and the prior year's extra week to reduce reported sales growth by about four points. Our base case uses the midpoint without giving the quarter credit for an unannounced guidance increase.
| Metric | Q1 FY2027 | Q1 FY2026 | Change / context |
|---|---|---|---|
| Revenue | $4,389.5M | $4,517.5M | −2.8% |
| GAAP operating profit | $633.6M | $1,725.8M | Prior-year disposal gain |
| Adjusted operating profit | $634.0M | $711.2M | −10.9% |
| GAAP EPS | $0.74 | $2.22 | Large disposal comparison |
| Adjusted EPS | $0.75 | $0.86 | −12.8% |
| Operating cash flow | $297.8M | $397.0M | Working capital and tax timing |
North America Retail generated $2,451.8 million of sales and $478.6 million of segment profit. Reported sales fell seven percent, including a four-point yogurt headwind; organic sales fell three percent. Organic volume and price/mix were both negative. The company described a sequential improvement in measured retail sales and stronger dollar-share trends across most priority categories. That is encouraging evidence of consumer response, but shipments still lagged measured retail sales by about a point because of retailer inventory movements.
North America Pet is the clearest test of the recovery's quality. Its $612.8 million of sales were roughly flat, while organic volume declined six points and price/mix added seven points. Rounding prevents a literal component sum from equaling reported growth. Segment profit fell to $99.5 million from $112.9 million and margin fell to 16.2 percent. Double-digit cat-food growth and modest treat growth were offset by a high-single-digit dog-food decline. The price/mix contribution therefore cannot simply be labeled pricing power across every product.
There is also a calendar qualification. Pet organic sales outpaced measured all-channel retail sales by approximately a point partly because Whitebridge's reporting calendar added an extra month in the comparison. Management still expects retailer inventory and customer-mix changes to weigh on full-year Pet organic sales by a low-single-digit amount. A future quarter needs better end-demand and volume evidence, not just another favorable shipment-calendar effect, to justify a higher multiple.
International and Foodservice provide the strongest counterargument to a purely bearish reading. International sales rose to $794.3 million, organic volume grew six points and segment profit reached $75.2 million. Foodservice organic sales grew four percent and profit reached $79.4 million. Yet together these businesses added only $18.3 million of profit against Retail and Pet's $99.0 million decline. Retail and Pet still generated 78.9 percent of total segment profit. Improvement in smaller divisions is valuable, but the companywide earnings recovery remains dependent on the domestic pair.
| Business | Organic sales | Margin now | Margin year ago |
|---|---|---|---|
| Retail | −3% | 19.5% | 21.5% |
| Pet | Flat | 16.2% | 18.5% |
| Foodservice | +4% | 15.2% | 13.7% |
| International | +4% | 9.5% | 8.6% |
GAAP and adjusted operating profit are almost identical this quarter, but that does not mean there were no unusual items. A favorable $29.5 million mark-to-market effect is removed from adjusted profit. A $23.7 million held-for-sale valuation loss, $4.3 million of transaction costs, $1.7 million of acquisition integration costs and $0.2 million of restructuring/transformation adjustments are added back. Their net is only $0.4 million. Offsetting exclusions can make a small net adjustment conceal significant gross movement.
Gross margin illustrates the same issue. Reported gross margin was unchanged at 33.9 percent, while adjusted gross margin fell from 34.2 to 33.3 percent. The derivative mark benefited the reported comparison. Excluding it gives a clearer view of input-cost pressure and the economics of brand investment. Adjusted operating margin fell by about 130 basis points to 14.4 percent. Our thesis does not depend on a permanent derivative benefit or on treating a held-for-sale loss as a repeatable operating expense; it depends on margins stabilizing without either item.
Below operating profit, net interest of $142.2 million absorbed a substantial part of earnings, up from $132.8 million. Benefit-plan non-service income contributed $10.6 million. After $122.8 million of tax, the company added $18.9 million of after-tax joint-venture earnings and deducted $1.1 million attributable to noncontrolling interests, leaving $397.0 million for General Mills shareholders. Joint-venture improvement partly reflects prior-year impairment and transaction costs, so we do not extrapolate its growth rate as a recurring demand signal.
The annual comparison must be treated separately. Fiscal 2026 reported operating profit of $885.8 million included large goodwill, intangible and Brazil held-for-sale charges as well as the yogurt disposal gain. Adjusted operating profit was $2,811.5 million. Those past charges do not consume current cash dollar for dollar, but they still reveal disappointing returns on capital committed to acquired businesses. Normalizing earnings is appropriate for valuation only if the analysis also retains that capital-allocation history.
| Fiscal 2026 annual bridge | USD millions |
|---|---|
| GAAP operating profit | 885.8 |
| Goodwill and intangible impairments | 1,802.9 |
| Divestitures gain removed | −1,049.4 |
| Held-for-sale valuation loss | 1,031.8 |
| Restructuring / transformation | 155.5 |
| Mark-to-market | −48.4 |
| Transaction / integration / investment | 33.2 |
| Adjusted operating profit | 2,811.5 |
| Source: fiscal 2026 earnings release. Last grouped row = 31.3 + 9.5 − 7.6, computed. | |
The nine checks below distinguish accounting noise from operating weakness. No single score determines the recommendation. Low stock compensation and limited minority leakage are favorable, while the operating and working-capital trends require more patience. The first quarter generated $297.8 million of operating cash and $207.3 million after capital investment. Free cash flow was therefore only 51.4 percent of adjusted net earnings, compared with management's approximately 95 percent conversion target for the full year.
That gap is not evidence that the annual target has already failed. Food producers build inventory ahead of seasonal demand, and tax-payment timing can make an individual quarter a poor annual proxy. The release identifies lower accrued federal taxes payable, including the prior year's yogurt disposal tax expense, as an important cash-flow comparison. Inventory used $261.1 million of cash. The correct question is whether that inventory converts into profitable sales and cash later, rather than whether the company can force one quarter to resemble a full fiscal year.
Ending receivable and inventory days are reproducible warning indicators, not forensic conclusions. We divide the ending balance by the quarter's sales or cost of sales and multiply by 91. Average balances, calendar differences and divestitures would refine those ratios; the end-balance convention is used consistently here to avoid pretending we have daily working-capital data. Rising days alongside weak volume would be more concerning than a seasonal inventory build that reverses with stronger sell-through.
We do not calculate a Beneish or Altman score from a partly normalized vendor statement. Mixing primary GAAP losses with provider-normalized operating income could generate impressive-looking but internally inconsistent results. In fact, the raw FMP dataset reports different operating-income classifications for some historical quarters. The packet uses the company's actual releases for the plotted operating series and preserves the provider records solely as cross-checks. An unexplained classification difference is something to investigate, not something to average away.
The primary balance sheet reports $433.1 million of cash outside the held-for-sale classification. Debt consists of $1,046.8 million of current long-term maturities, $201.6 million of notes payable and $12,367.2 million of long-term debt. Those lines sum to $13,615.6 million; subtracting the unrestricted balance-sheet cash gives $13,182.5 million of net debt. We use this arithmetic rather than the provider's slightly different total-debt field. An additional $30.7 million of cash sat inside the held-for-sale business; it is excluded from our conservative net-debt offset because the quarter-end Brazil sale was not yet closed.
Brazil closed on September 2, after the August 30 balance-sheet date. That resolved transaction is not a continuing eligibility exclusion, but the balance sheet is still a pre-close snapshot. We do not invent a post-sale debt balance, assume proceeds already retired debt, or subtract an unverified cash receipt. A later filing will permit a clean post-transaction bridge. The remaining asset base also includes substantial goodwill and intangible balances. These are not cash available to service maturities, regardless of their accounting classification.
First-quarter dividends of $330.5 million exceeded free cash flow by $123.2 million. There were no share repurchases, compared with $500 million in the year-earlier quarter. That pause preserves flexibility. It also removes a potential source of EPS support while the operating reset continues. The balance-sheet risk is not captured by looking only at the dividend rate: management must finance working capital, reinvest in brands, meet debt obligations and maintain shareholder distributions from the same pool of resources.
For a simple full-year cash bridge, apply the 95 percent conversion target to $3.10 of adjusted EPS and hold diluted shares at 537.9 million. That produces roughly $1,584.1 million of annual free cash flow and leaves about $1,376.8 million to generate after the first quarter. This is our computed proxy, not additional company guidance; actual share counts, tax and adjustment definitions can differ. It makes the remaining execution requirement visible without annualizing the seasonally weak first quarter.
| Cash metric | Q1 FY2027 | FY2026 | FY2025 | FY2024 |
|---|---|---|---|---|
| Operating cash flow | 297.8 | 2166.2 | 2918.2 | 3302.6 |
| Capital investment | 90.5 | 539.9 | 625.3 | 774.1 |
| Free cash flow | 207.3 | 1626.3 | 2292.9 | 2528.5 |
| Dividends | 330.5 | 1315.3 | 1338.7 | 1363.4 |
| Buybacks | 0.0 | 500.3 | 1202.9 | 2002.4 |
| Stock compensation | 21.8 | 79.4 | 91.7 | 95.3 |
| USD millions. Annual statements sourced to saved 10-Ks with raw FMP cross-check; FCF = OCF minus capex. | ||||
Route one applies a 12 times multiple to the $3.10 midpoint of fiscal 2027 adjusted EPS guidance, giving $37.20. Twelve times is our assumption, not a historical average asserted without evidence. It reflects a mature branded-food business with valuable distribution and brand assets, offset by declining domestic volume and uncertain recovery. We do not capitalize the old yogurt gain or the prior year's impairment loss as if either were sustainable earnings.
Route two capitalizes the cash available to equity. Multiplying $3.10 of EPS by the 95 percent conversion target produces $2.945 of free cash flow per share under a stable diluted-share assumption. Dividing by an eight percent required cash yield gives $36.81. This is an equity cash-flow yield method, so interest is already reflected in the earnings base and debt is not subtracted a second time. It is also conditional on management achieving its conversion target. A lower conversion rate would reduce this route even if adjusted EPS guidance were met.
Route three starts with fiscal 2026 adjusted operating profit of $2,811.5 million and applies the midpoint 10.5 percent decline in fiscal 2027 guidance. The result is $2,516.3 million. At our selected 13 times enterprise-value-to-operating-profit multiple, enterprise value is about $32,711.8 million. Subtract $13,182.5 million of net debt and divide by 537.9 million diluted shares: $36.31 per share. Pension, lease, joint-venture and post-sale balance-sheet treatment could refine this simplified cross-check, so it is not presented as a precision appraisal.
The three routes are not fully independent: earnings, operating profit and cash flow arise from the same business. Agreement is useful as a consistency check, not statistical proof. We round the central result to $37 and use a $32–$42 working valuation band. The broader bear-to-bull scenario range is $27–$47. At $35.74, the market already capitalizes about $2.98 of earnings at our 12 times convention, close to the bottom of guidance. A business that merely meets the reset does not automatically deserve a much higher price.
High uncertainty calls for a margin of safety. A 20 percent discount to our base value gives a mechanical entry reference of $29.60, provided the operating thesis remains intact. Alternatively, stronger volume, margins and cash conversion could raise the warranted value and justify a BUY at a higher price. We will not move the target simply because the share price moves. The sensitivity grid shows how quickly plausible EPS and multiple changes can dominate the small difference between the quote and our central estimate.
$3.10 × 12 = $37.20/share.
$3.10 × 95% ÷ 8% = $36.81/share.
($2,811.5M × 89.5% × 13 − $13,182.5M) ÷ 537.9M = $36.31/share.
The saved FMP consensus contains eight buy ratings, twenty-two holds and six sells, with no strong-buy or strong-sell entries. Its consensus label is Hold. The target aggregate is $35.92, with a $35.50 median and a $31–$43 range. Our $37 fair value is close to that aggregate, so this is not a contrarian price-target story. The reason for the call is the operating and valuation evidence, not the number of analysts who agree.
Named price-target records available in the saved snapshot largely predate this release. Evercore ISI's September 14 record carries a $38 target, Jefferies' September 10 record carries $35, and UBS's July 6 record carries $33. They are context rather than post-print endorsements. One September 1 row has a firm-name/title mismatch in the provider response and is deliberately omitted from named comparisons. We preserve that raw row so the exclusion can be audited.
Consensus annual estimates are also provider snapshots, not guarantees and not company guidance. The number of analysts falls at longer horizons, particularly for EPS, so far-dated precision is not evidence of confidence. The fiscal 2027 company range of $3.00–$3.20 is our primary forecast anchor. We compare it with the provider's estimate path, but we do not silently replace the company's definitions with a possibly different analyst earnings basis.
The useful disagreement to watch is qualitative. A more optimistic analyst may believe product renovation and completed base-price investments restore unit demand rapidly. Our base case requires evidence that those initiatives improve profit and cash as well as sales. A more pessimistic analyst may view Pet's volume weakness as structural. We leave room for recovery in the bull case but demand a wider purchase discount while both interpretations remain plausible.
| Firm / aggregate | Date | Target | Freshness |
|---|---|---|---|
| Evercore ISI | 2026-09-14 | $38 | Before this print |
| Jefferies | 2026-09-10 | $35 | Before this print |
| UBS | 2026-07-06 | $33 | Before this print |
| FMP aggregate | 2026-09-23 fetch | $35.92 | Mixed underlying dates |
| Charged Alpha | 2026-09-23 | $37 | Current primary-release analysis |
Management deserves credit for maintaining guidance after a quarter that modestly exceeded the saved consensus and for reporting enough segment and reconciliation detail to test the recovery. Foodservice and International delivered profit growth, Retail's measured sales trends improved sequentially, and buybacks were paused. Those are concrete observations. They do not yet prove that the largest profit contributors have returned to sustainable growth.
The fiscal 2027 savings commitment is at least $750 million across Holistic Margin Management, the global transformation initiative and other actions. Management expects those savings to offset input inflation and brand investment. It would be double counting to add the whole savings figure to earnings guidance. The guidance already incorporates the expected benefits and the costs they are intended to absorb. We grade execution through delivered margins and cash, not the gross size of the announced program.
Capital allocation remains a mixed record. The company is simplifying its portfolio, but prior-year impairment charges show that some invested capital did not earn what had been expected. The annual report identifies KPMG as auditor and reports effective internal control over financial reporting. That supports the reporting framework; it does not validate our valuation assumptions. Walmart accounted for 22 percent of company sales and 31 percent of Retail sales in fiscal 2026, making retailer negotiations, inventory decisions and consumer sell-through especially consequential.
At the next results, our questions are specific: how much Pet growth came from consumers rather than calendar alignment; whether Retail's improved measured sales became better shipments; how much of gross cost savings survived inflation and brand spending; whether inventory converted to cash; and what the post-Brazil-sale balance sheet actually looks like. These questions can change the recommendation. A broad assertion that brands are improving cannot substitute for those answers.
| Decision / commitment | Current evidence | Our grade |
|---|---|---|
| FY2027 outlook | Reaffirmed after Q1 | On track, early |
| Domestic recovery | Retail organic −3%; Pet flat with volume −6 pts | Needs evidence |
| Savings | At least $750M expected; offsets costs/investment | Judge net margins |
| Capital return | No Q1 buybacks; $330.5M dividends | Flexibility preserved |
| Portfolio | Brazil closed after quarter-end | Await post-close cash bridge |
| Historical capital allocation | Large FY2026 goodwill/held-for-sale charges | Mixed |
The highest operating risk is that lower domestic volume reflects a lasting shift in consumer preference rather than a temporary value or inventory adjustment. The release itself highlights health-related preferences, weight-loss trends, product innovation and competition among relevant uncertainties. We do not assign a fabricated sales impact to those forces. Instead, we watch the volume and share data that should reveal whether General Mills' product response is working.
Cost inflation, tariffs and supply-chain disruption could absorb more productivity savings than planned. Retailer bargaining power matters because of customer concentration. Pet also faces execution and mix risk: cat food, treats and dog food are behaving differently, and an aggregate flat-sales result can conceal persistent weakness in the larger or more profitable categories. Financial leverage amplifies the equity consequence if operating profit falls below the reset guidance.
The strongest bull case is that completed base-price actions and improved innovation now translate into better demand, while International and Foodservice continue growing. Cost savings then protect margins and the seasonal inventory build becomes cash. Our bull scenario uses $3.35 of EPS at about fourteen times, rounded to $47. It requires a stronger earnings outcome than current guidance; it is not our central forecast.
The strongest bear case is that price/mix keeps disguising unit weakness, the domestic businesses fail to stabilize and cash conversion disappoints. Our bear scenario uses $2.70 at ten times, or $27. The base scenario uses $3.10 at twelve times, rounded to $37. Weighting bear/base/bull at 30/50/20 percent yields $36. These are explicit analyst probabilities, not measured event frequencies. They make our caution visible and allow readers to substitute their own assumptions.
| Ranked risk | Likelihood | Impact | Observable test |
|---|---|---|---|
| 1. Retail/Pet volume fails to recover | High | High | Organic volume, share and margins |
| 2. Savings absorbed by inflation/investment | Medium | High | Adjusted gross/operating margins |
| 3. Cash conversion falls short | Medium | High | Inventory, OCF and full-year FCF |
| 4. Retailer concentration | Medium | Medium-high | Shipment versus retail-sales gap |
| 5. Balance-sheet / post-sale uncertainty | Medium | Medium | Debt, proceeds and cash uses |
| 6. Further asset impairment | Medium | Medium | Forecast changes and carrying values |
The next expected quarterly earnings check is December 2026; the exact company-confirmed date is not assumed in this packet. That release should show whether the initial Retail sales improvement translated into better organic shipments and whether Pet's volume trend improved after the calendar alignment. We use December 31 as the review deadline in the signpost table, not as a prediction of the announcement day.
The September 2 Brazil closing is already complete. Its next useful catalyst is disclosure of proceeds, tax effects and debt or cash uses in subsequent financial statements. We will compare the new balance sheet with August 30 rather than claim a transaction announcement alone changed net debt. The full fiscal 2027 results, expected around July 2027, provide the final test of the EPS and cash-conversion commitments.
A BUY requires either a materially more attractive valuation with the thesis intact or evidence that the durable earnings base is above our current estimate. A downgrade becomes appropriate if volume and margin deterioration imply that the $3.00–$3.20 guidance is too optimistic, or if weak cash conversion persists beyond normal seasonality. A small earnings beat, an isolated target increase or one favorable market session is insufficient on its own.
This is a new packet for Q1 FY2027. No prior finalized quarterly packet with a dated signpost scorecard was located in the production inputs, so we do not manufacture a historical success rate. The earlier public GIS video supplies the forbidden editorial angle, not a falsifiable packet record. The signposts published here become the baseline to grade at the next update, including misses and unchanged assumptions.
| Checkpoint | Timing | Evidence required |
|---|---|---|
| Pet / Retail demand | By December 31, 2026 | Volume and segment margin trend |
| Post-Brazil balance sheet | Next reported statements | Cash, debt, proceeds and tax bridge |
| Cash seasonality | Through fiscal 2027 | Inventory unwind and conversion progress |
| Full-year outcome | By July 31, 2027 review | EPS, organic sales, adjusted OP and FCF |
| Valuation discipline | Each update | Price versus revised, evidence-based value |
Primary evidence is the September 23, 2026 earnings 8-K and its attached release, supplemented by the nine-quarter sequence of earnings releases and the fiscal 2026, 2025 and 2024 annual reports. All source bytes were saved locally before authoring, with URLs, fetch times and SHA256 hashes. The current release was independently fetched and matched to the saved eligibility copy. The public release, not the provider calendar, establishes that this quarter has reported.
Current-status screening reviewed the actual historical form flags. The five Form 25 notices concerned retired or redeemed debt securities, not removal of GIS common stock from the NYSE. The 2021 S-4 concerned an exchange of notes, while the September 2026 exempt solicitation discussed a human-rights proposal rather than a control contest. The current release confirms Brazil's completed sale and previously completed yogurt disposals. These historical records remain research context without being treated as permanent exclusions.
Dollar statement figures are in millions unless specifically labeled per share. EPS and valuation figures are ordinary dollars per share. Margins, growth rates, working-capital days, free cash flow, net debt and valuation arithmetic are computed in the accompanying dataset. Organic growth, constant-currency changes and non-GAAP adjustments retain the company's definitions. Segment profit is not consolidated profit: corporate costs and other reconciliation items sit between them. We avoid adding rounded percentage points as though they were exact contributions.
Our valuation uses 537.9 million diluted shares as a stable forecast convention. FMP's spot market cap uses a different share count, and the balance-sheet common-share arithmetic differs from a weighted diluted EPS denominator. None is silently substituted for another. The cash-yield method is an equity method; the enterprise-value method subtracts net debt once. End-balance working-capital days use 91 days and are labeled proxies. Price-return bars exclude dividends. Scenario prices are rounded deliberately, and probability-weighted value is calculated from those published rounded prices.
This packet is research for understanding a business and the assumptions embedded in a price. It does not personalize a trade, guarantee a return or predict a catalyst outcome. The company can meet guidance while its stock falls, or miss guidance while the stock rises if expectations differ. Our responsibility is to state the evidence, the arithmetic and the conditions that would make our current judgment wrong, then preserve that record for the next quarter.
| Quarter | Revenue $M | GAAP OP $M | Adj OP $M | GAAP EPS | Adj EPS |
|---|---|---|---|---|---|
| Q1 FY2025 | 4,848.1 | 831.5 | 865.3 | $1.03 | $1.07 |
| Q2 FY2025 | 5,240.1 | 1,077.9 | 1,064.0 | $1.42 | $1.40 |
| Q3 FY2025 | 4,842.2 | 891.4 | 800.8 | $1.12 | $1.00 |
| Q4 FY2025 | 4,556.2 | 504.0 | 622.5 | $0.53 | $0.74 |
| Q1 FY2026 | 4,517.5 | 1,725.8 | 711.2 | $2.22 | $0.86 |
| Q2 FY2026 | 4,860.8 | 728.0 | 847.7 | $0.78 | $1.10 |
| Q3 FY2026 | 4,436.7 | 524.6 | 547.2 | $0.56 | $0.64 |
| Q4 FY2026 | 4,609.6 | −2,092.6 | 705.4 | $-3.74 | $0.95 |
| Q1 FY2027 | 4,389.5 | 633.6 | 634.0 | $0.74 | $0.75 |
| Source: each quarter’s saved company earnings release. FY2026 Q4 includes major impairment/held-for-sale charges. | |||||
| Fiscal year | Employees | SBC $M | Buybacks $M | Dividends $M |
|---|---|---|---|---|
| FY2024 | 34,000 | 95.3 | 2002.4 | 1363.4 |
| FY2025 | 33,000 | 91.7 | 1202.9 | 1338.7 |
| FY2026 | 30,000 | 79.4 | 500.3 | 1315.3 |
| Annual reports; employee counts are approximate. | ||||