In a large mixing bowl, sift together the powdered sugar and then add the sweetened condensed milk along with the peppermint extract. Mix until a sticky dough forms, about 3-4 minutes.

Divide the dough into three equal portions. Color one portion red, one green, and leave the last plain. Knead until colors are evenly distributed.

Dust your work surface with powdered sugar. Roll each colored dough into ½-inch thick ropes, twist red and green ropes together, and cut into 2-inch segments.

Shape mint segments into small rounds, roll in granulated sugar, and place on a parchment-lined sheet. Let dry at room temperature for at least 4 hours.