CHICAGO, IL. (WOWO) Cheerios maker General Mills is cutting its annual sales and profit forecasts, citing weaker consumer sentiment and changing grocery habits as cost-of-living pressures reshape spending patterns.

According to FOX Business, the company said ahead of its presentation at the Consumer Analyst Group of New York conference that “weak consumer sentiment, heightened uncertainty, and significant volatility” have weighed on category growth and slowed volume recovery.

General Mills now expects annual sales to decline between 1.5% and 2%, compared with its prior guidance of down 1% to up 1%. The company also forecast adjusted operating profit and adjusted earnings per share will fall 16% to 20% in constant currency, steeper than its earlier projected decline of 10% to 15%.

Chief Executive Jeff Harmening said cost-of-living and housing expenses are changing how consumers allocate their budgets, particularly among lower- and middle-income households. He said value has become a “core expectation” as shoppers focus more closely on price.

The company also pointed to a growing consumer preference for healthier options and increased use of GLP-1 weight-loss medications, which may influence portion sizes and demand for nutrient-dense foods. Harmening said the shift is nudging some consumers toward protein- and fiber-focused products.

The outlook revision comes as other food companies adjust to similar pressures. PepsiCo recently reduced prices on some snack brands following pushback over earlier price increases. Meanwhile, Conagra Brands has maintained its annual targets despite reporting softer quarterly results.

General Mills has faced muted demand as consumers curb discretionary spending and shift toward lower-cost pantry staples. Shares of the company were modestly higher in recent trading.

The updated forecast underscores continued challenges for packaged food makers navigating inflationary pressures and evolving consumer preferences.