How did General Mills' revenue and expenses shift in Q3 2025 compared to previous quarters?

General Mills' financial performance in Q3 2025 was marked by a decline in revenue and an increase in expenses compared to the previous quarter, Q2 2025, and the same period the year before.

1. Revenue Shift:
   • In Q3 2025, General Mills reported a 5% year-over-year decline in revenue, reaching $4.8 billion. This decrease was primarily attributed to reduced pound volume and unfavorable foreign currency exchange rates. Organic net sales also fell by 5%.
   • The company's performance was impacted by more-than-anticipated retailer inventory headwinds and a slowdown in snacking categories. Additionally, there was a four-point gap between organic net sales and retail sales growth, mainly due to reduced retailer inventory and the anticipated reversal of certain second-quarter timing benefits.
2. Expense Shift:
   • Net interest expense totaled $136 million in Q3 2025, which is a key component of the company's total expenses. This figure underscores the significance of interest-related costs in impacting the company's bottom line.
   • Unallocated corporate expenses were $56 million in Q3 2025, representing a net expense. This indicates that despite cost-saving measures, certain corporate overheads remained elevated.
3. Comparing Q2 and Q3:
   • It's important to note that Q2 2025 results were not directly reported, but contextually, the trends of reduced gross profit dollars and increased selling, general, and administrative (SG&A) expenses suggest that these cost pressures were ongoing.
   • The adjusted gross margin declined by 60 basis points to 33.4% of net sales in Q3 2025, primarily due to input cost inflation, unfavorable net price realization, and mix, as well as supply chain deleverage. This indicates that General Mills faced significant cost challenges that affected its profitability.
4. Strategic Responses:
   • Despite the challenges, General Mills implemented the Holistic Margin Management (HMM) strategy, which provided slight improvements in gross margin. This suggests that the company was actively working to mitigate the impact of rising input costs and other cost pressures.
   • The company's focus on innovation, brand communication, and value for consumers, along with expected new cost-savings initiatives, reflects a forward-looking approach to addressing operational efficiency and growth.

In conclusion, General Mills faced a challenging quarter in Q3 2025, marked by declining revenue and increased expenses, primarily due to cost inflation, supply chain disruptions, and retailer inventory headwinds. Despite these challenges, the company's strategic initiatives, such as HMM, indicate a proactive approach to managing costs and improving operational efficiency.