Post Holdings (POST) Tops Q3 Earnings, Raises FY24 Outlook

4 Aug 2024

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Post Holdings POST Tops Q3 Earnings Raises FY24 Outlook

Post Holdings (POST) fiscal third-quarter results reflect sales growth in Post Consumer Brands and Weetabix, counterbalanced by declines in the Foodservice and Refrigerated Retail segments.

Post Holdings, Inc. POST reported third-quarter fiscal 2024 results, with the top and bottom lines increasing year over year. Earnings surpassed the Zacks Consensus Estimate, while sales missed the same. Management raised its adjusted EBITDA guidance for fiscal 2024.

Quarter in Details

The company posted adjusted earnings of $1.54 per share, surpassing the Zacks Consensus Estimate of $1.21. Additionally, the bottom line reflected a slight improvement from an adjusted earnings of $1.52 per share reported in the year-ago quarter.

Net sales of $1,947.7 increased 4.7% from $1,859.4 million reported in the prior-year quarter. However, the top line missed the Zacks Consensus Estimate of $2,012 million. The reported figure included $436.4 million in net sales from acquisitions. Gross profit of $577.1 million rose 15.1% year over year while gross margin expanded 260 basis points to 29.6%. Operating profit also registered a robust increase of 28.4%, which amounted to $203.2 million from $158.3 million a year ago.

SG&A expenses increased 7.8% to $324.5 million, whereas as a percentage of net sales, the metric expanded 50 basis points to 16.7%. The rise in SG&A expenses was mainly caused by the inclusion of Pet Food in the portfolio.

The adjusted EBITDA was $350.2 million, up 3.5% from $338.2 million in the year-ago quarter.

Post Holdings, Inc. Price, Consensus and EPS Surprise

Post Holdings, Inc. price-consensus-eps-surprise-chart | Post Holdings, Inc. Quote

Segment Details

Post Consumer Brands: The segment reported net sales of $1,008.1 million, up 15.7% year over year, primarily owing to $428.9 million in sales from acquisitions. Excluding the benefit from buyouts, volumes fell 6% mainly attributable to declines in branded and non-retail cereal. The segment’s profit showed significant growth, up 54.9% to $128.6 million, with adjusted EBITDA rising 27.8% to $193.5 million.

Weetabix: The segment registered 1.4% growth in net sales to $136.1 million, owing to unfavorable currency exchange rates of 80 basis points and a $7.5 million contribution from the Deeside acquisition. Excluding the impact of Deeside, there was a reduction of 5.6% in volumes, primarily owing to decreases in branded products. The segment's profit surged 34.6% to $24.1 million, with adjusted EBITDA rising 23.9% to $34.2 million.

Foodservice: The segment recorded a 5.4% decline in net sales to $589.1 million. The company registered a 1.5% increase in volumes thanks to the distribution gains in both eggs and potatoes. However, segmental profit and adjusted EBITDA declined 16.8% and 16.7% to $89.6 million and $120.4 million, respectively.

Refrigerated Retail: The segment sales declined 7.1% year over year, amounting to $214.4 million. This decrease in sales was mainly due to a 0.5% drop in volumes with increased sales in side dishes being offset by distribution losses in lower-margin egg products. Segmental profit declined drastically by 71.7% to $5.1 million. Adjusted EBITDA reduced by 37.2% to $23.3 million.

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Fiscal 2024 Outlook

Management raised the adjusted EBITDA outlook for 2024. The company expects adjusted EBITDA of $1,370-$1,390 million compared with the previous range of $1,335-$1,375 million. Capital expenditures are forecasted to be between $420 million and $445 million.

This Zacks Rank #3 (Hold) company’s shares have gained 7.6% against the industry’s decline of 2.3% in three months.

Image Source: Zacks Investment Research

Consumer Staples Stocks Worth a Look

Here, we have highlighted three better-ranked stocks, namely, Vital Farms VITL, Ollie's Bargain Outlet OLLI and Colgate-Palmolive CL.

Vital Farms offers a range of produced pasture-raised foods. It currently sports a Zacks Rank #1 (Strong Buy). VITL has a trailing four-quarter average earnings surprise of 102.1%. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Vital Farms’ current financial-year sales and earnings suggests growth of 24.9% and 66.1%, respectively, from the year-ago reported numbers.

Ollie's Bargain, the extreme-value retailer of brand-name merchandise, currently flaunts a Zacks Rank #1. OLLI has a trailing four-quarter earnings surprise of 10.4%, on average.

The Zacks Consensus Estimate for Ollie's Bargain’s current financial-year sales and earnings indicates a rise of around 8.1% and 12.4%, respectively, from the year-earlier levels.

Colgate-Palmolive, a leading oral care company, currently carries a Zacks Rank #2 (Buy). CL delivered an earnings surprise of 4.8% in the trailing four quarters, on average.

The Zacks Consensus Estimate for Colgate-Palmolive’s current fiscal-year sales and earnings suggests growth of 3.8% and nearly 10.5%, respectively, from the year-earlier reported figures.

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