Economic uncertainty arising from President Donald Trump’s shifting tariff policies has weighed on consumer spending in the U.S., challenging General Mills’ efforts to drum up sales.

Why it matters: General Mills is a major buyer of grains and other agricultural goods.

“We expect the operating environment will remain volatile, with consumers pressured by widespread uncertainty from tariffs, global conflicts, and changing regulations,” CEO Jeff Harmening said.

“Amid this uncertainty, we expect consumers to remain cautious and continue seeking value.”

Shares of the Cheerios-maker were down two per cent in early trading.

The company has been trying to boost demand through new products, such as a fresh version of its Blue Buffalo pet food, betting on a rise in demand for the minimally processed fresh pet food market. But analysts expect investments in marketing and acquisitions to take a toll on its margins.

“While increased investments will pressure profitability, returning to volume growth, especially in North America Retail, is the first step to return to on-algorithm delivery, and might be a necessary pill to swallow,” said Consumer Edge analyst Connor Rattigan.

The company expects full-year adjusted profit to decline between 10 per cent and 15 per cent, compared to analysts’ estimates of a 4.8 per cent decline, according to data compiled by LSEG.

For the fourth quarter ended May 25, General Mills posted sales of $4.56 billion (C$6.26 billion), narrowly missing expectations of $4.59 billion.

Net sales at its North America retail segment, a major revenue contributor, were down 10 per cent, offsetting gains from a 12 per cent rise in General Mills’ pet segment sales in the region.

The company, however, posted an adjusted profit per share of 74 cents (C$1.02) for the reported quarter, above analysts’ estimates of 71 cents.

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The chicken nuggets and Ball Park hot dogs manufacturer has improved its poultry business after struggling to predict demand and shuttering plants that employed thousands of workers. A gradual recovery in restaurant traffic and sustained eat-at-home trends have supported demand.

However, Tyson faces threats from tariffs that U.S. President Donald Trump plans for Mexico, Canada and China, as well as tight supplies of U.S. cattle. Trump said on Monday he agreed to pause anticipated tariffs with Mexico for one month.

Tyson considered tariff risks when it lifted its annual adjusted operating income forecast range to between $1.9 billion and $2.3 billion, from $1.8 billion to $2.2 billion expected earlier, CEO Donnie King told analysts on a call.

The company, which benefits from relatively cheap costs for U.S. grains used to feed chickens, now expects fiscal 2025 sales to be flat to up one per cent, compared with flat to down one per cent.

Tyson has done contingency planning for sales of U.S. pork and poultry to Mexico due to concerns over Trump’s tariffs, and would move those products to other markets if necessary, King said.

“We’ve been preparing for this, making adjustments. We now have to execute some of those things,” he said.

Trump’s planned 25 per cent tariffs on Canada and Mexico and 10 per cent tariffs on China could help keep grain costs low by triggering retaliation that reduces global demand for U.S. crops, analysts said.

However, the duties could further increase record prices for cattle processed by Tyson, as the U.S. imports livestock from Mexico and Canada. Tit-for-tat tariffs could also hurt demand for Tyson’s meat as Mexico is the biggest export market for U.S. pork, analysts said.

Trump is also cracking down on illegal immigration, though King said Tyson has not seen any raids by immigration authorities on its facilities or a decline in worker attendance in the wake of mass deportation plans.

On an adjusted basis, Tyson earned $1.14 per share in the first quarter ended Dec. 28, compared with estimates of 88 cents.

Sales in its beef unit, the company’s biggest business, rose 6.2 per cent as cattle are being raised to heavier weights after farmers slashed their herds due to drought.

Improving pasture conditions provide an opportunity to increase herds, said Brady Stewart, who leads Tyson’s beef and pork businesses.

But many farmers are not yet keeping female cows, or heifers, on their ranches to reproduce, instead of sending them to slaughter, government data indicates.

“Heifer retention remains frustratingly low, which likely portends beef segment challenges for longer than expected,” JP Morgan said.

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