General Mills Stock Crashes 36% as Consumer Staples Struggle
The past 12-month period has been quite challenging for consumer staples and packaged food companies in particular. Ongoing cost pressures are forcing businesses to undergo yet another round of price increases and this is taking its toll on volumes, margins and investors' confidence as well. General Mills (GIS) has not been immune to these trends and the stock's performance over the past year reflects that. After the Q3 2026 report, it seems that there won't be any changes to the narrative in the near-future as the management reaffirmed its full fiscal year outlook for a low single-digit sales drop and a material drop in both operating profit and earnings per share. While this could be interpreted as neither good nor bad news, the GIS stock has fallen by more than 36% over the past year and is one of the worst performers within the already challenged peer group. As a result, GIS is now trading single digit earnings multiple on a GAAP basis and at a forward P/E multiple of 11 once non-recurring items are accounted for. On one hand, we now have a stock that is trading at ridiculously low levels, but on the other the latest report has sent a signal to investors that a recovery in the coming quarters is unlikely. Having said that, long-term oriented investors should pay attention as the recent quarter has also shown some early positive signs which coupled with the record-low valuation could present a good entry point.
