09:13 AM EDT, 03/19/2025 (MT Newswires) -- General Mills ( GIS ) lowered its full-year outlook on Wednesday and reported fiscal third-quarter revenue below expectations as the Cheerios and Dunkaroos maker faced inventory headwinds and a slowdown in snacking categories in the US.

The company now anticipates per-share adjusted earnings to be down 7% to 8% in constant currency terms for fiscal 2025, compared with its previous projections for a 2% to 4% decline. Organic sales are set to decrease 1.5% to 2% for the ongoing fiscal year, down from the prior guidance of the lower end of the range between flat and up 1%. The stock fell 4.5% in premarket activity.

General Mills ( GIS ) expects macroeconomic uncertainty to continue to weigh on consumers in the ongoing three-month period. The packaged food maker said its revised full-year outlook doesn't reflect any impact from new tariffs due to their scope and uncertainty regarding implementation dates.

For the quarter ended Feb. 23, the company's adjusted earnings fell to $1 a share from $1.17 the year before, but topped the FactSet-polled consensus of $0.96. Sales slipped 5% year over year to $4.84 billion, trailing the Street's view for $4.96 billion. On an organic basis, sales were also down 5%.

"Our third-quarter organic net sales finished below our expectations, driven largely by greater-than-expected retailer inventory headwinds and a slowdown in snacking categories," Chief Executive Jeff Harmening said in a statement. "At the same time, we drove continued positive market share trends in pet, foodservice and International, as well as improvement in Pillsbury refrigerated dough and Totino's hot snacks, two businesses where we made incremental investments last quarter and saw positive returns."

North America retail sales slid to $3.01 billion from $3.24 billion in the prior-year quarter, amid lower pound volume and prices. Revenue dropped by 10% in the US morning foods operating division, while decreasing by mid-single and low-single digits in the US snacks and US meals and baking solutions units, respectively. Sales were down by double digits in Canada in constant currency, mainly due to the divestiture of the company's yogurt business in the country completed in January.

Pet sales in North America came in at $623.7 million, ticking down from $624.5 million last year. Within the segment, the group logged mid-single-digit growth each for wet pet food and pet treats, but saw dry pet food record a mid-single-digit decline. North American foodservice sales nudged up 1% to $555.3 million, while international revenue moved down 4% to $651.3 million.

General Mills ( GIS ) is targeting at least 5% savings in cost of goods sold in fiscal 2026, or about $600 million in gross productivity savings, as part of its margin management productivity program. The company has also launched a review of initiatives that aim to achieve at least $100 million in savings in fiscal 2026.

"We're focused on improving our sales growth in fiscal 2026 by stepping up our investment in innovation, brand communication, and value for consumers," according to Harmening.