The ongoing conflict in Iran is disrupting global supply chains, particularly affecting the fertilizer market, and it’s taking a toll on consumer staples stocks like General Mills (GIS). As the Strait of Hormuz, a crucial shipping lane for both oil and fertilizer, remains closed, General Mills has seen its share price plummet by 17% over the past month, defying the usual trend of defensive stocks performing well during geopolitical strife. This decline is exacerbated by the company’s recent earnings miss and a bleak outlook for fiscal 2026, projecting a 16% to 20% drop in adjusted earnings.
The implications for the food sector are significant, as constrained fertilizer supplies could lead to higher food prices, pushing consumers towards cheaper alternatives. With General Mills already struggling with sales and demand, investors are advised to exercise caution. The current environment suggests that a turnaround for the company may be a long way off, making it prudent to hold off on new investments in this stock.
Source: fool.com