We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Post Holdings (POST) Gains on Foodservice Business & Buyouts
Read MoreHide Full Article
Post Holdings, Inc. (POST - Free Report) is increasing its presence through acquisitions to enhance its portfolio. The consumer-packaged-goods company is benefiting from strategic pricing actions and recovery across Foodservice business. These upsides were seen in its fourth-quarter fiscal 2022 results, with the top and the bottom line increasing year over year and beating the Zacks Consensus Estimate.
That being said, Post Holdings is not immune to inflationary headwinds and supply chain-related issues.
Let’s delve deeper.
Promising Q4 Performance
In the fourth quarter of fiscal 2022, Post Holdings posted adjusted earnings from continuing operations of 85 cents per share, increasing from the 11 cents reported in the prior-year quarter. POST registered sales of $1,579.1 million, up 16.5%. The upside can be attributed to pricing actions in every segment and ongoing volume recovery across Foodservice business. The company saw sales growth in the Post Consumer Brands and Foodservice segment.
We note that Post Holdings has been gaining from strength in the Foodservice business for a while. During the fiscal fourth quarter, Foodservice sales increased 36.9% to $625.5 million. Revenues reflect the effects of inflation-driven pricing actions, the impact of commodity cost pass-through pricing model and avian influenza-driven pricing efforts. Volumes rose 3.6%. Management highlighted that its Foodservice business has completely recovered from COVID and turned profitable.
Image Source: Zacks Investment Research
Prudent Acquisitions Driving Growth
Post Holdings has been focusing on acquisitions, helping it expand its customer base. On Apr 5, 2022, Post Holdings acquired Lacka Foods Limited. Lacka Foods is a U.K.-based marketer of high-protein, ready-to-drink (RTD) shakes under the UFIT brand. Post Holdings acquired Almark Foods (or Almark) on Feb 1, 2021. Almark, which is renowned for its hard-cooked and deviled egg products, provides conventional, organic and cage-free products. Also, on Jan 25, Post Holdings acquired the Peter Pan peanut butter brand. On Jul 1, 2020, the company completed the acquisition of Henningsen Foods, Inc., which forms part of its Foodservice segment. In June 2021, the company stated that it had completed the acquisition of the PL RTE Cereal Business of TreeHouse Foods.
Several other companies in the food space, like The Kraft Heinz Company (KHC - Free Report) , Hormel Foods Corporation (HRL - Free Report) and Tyson Foods, Inc. (TSN - Free Report) , are benefiting from acquisitions.
In April 2022, Kraft Heinz acquired a majority stake in a Brazil-based condiments and sauces company — Companhia Hemmer Industria e Comercio ("Hemmer"). The buyout widened Kraft Heinz's International Taste Elevation platform and enhanced its presence across emerging markets. In January 2022, KHC acquired an 85% stake in Germany-based Just Spices GmbH (“Just Spices”). The buyout enhanced its direct-to-consumer operations and go-to-market expansion.
Hormel Foods is strengthening its business through strategic acquisitions. In June, HRL acquired the Planters snacking portfolio from Kraft Heinz. Prior to this, it acquired Texas-based pit-smoked meats company Sadler's Smokehouse in March 2020. The buyout was in sync with Hormel Foods’ initiatives to strengthen its position in the foodservice space.
Tyson Foods is focused on expanding into international markets as part of its strategic growth plan. In Jul 2022, TSN announced its strategic partnership with Tanmiah Food Company (Tanmiah) — a leading Middle East provider of fresh and processed poultry, other processed meat products, animal feed and health products. The acquisitions will allow Tyson Foods to access poultry supplies across Saudi Arabia to cater to the rising protein demand in the Middle East and other markets.
What’s Hampering Post Holdings Performance?
In its fiscal fourth-quarter earnings call, management highlighted supply chain disruptions eased slightly but continued to drive increased manufacturing costs while customer order fulfillment rates remained lower than optimal levels. The company also faced input and freight inflation in the quarter.
In addition, Post Holdings has been seeing a rise in SG&A costs for a while. The company’s SG&A expenses increased 9.9% year over year to $223.8 million in the fourth quarter of fiscal 2022.
Yet, the aforementioned upsides will likely keep POST afloat amid such hurdles.
Shares of the Zacks Rank #3 (Hold) company have gained 19% in the past six months compared with the industry’s growth of 12.3%.
Image: Bigstock
Post Holdings (POST) Gains on Foodservice Business & Buyouts
Post Holdings, Inc. (POST - Free Report) is increasing its presence through acquisitions to enhance its portfolio. The consumer-packaged-goods company is benefiting from strategic pricing actions and recovery across Foodservice business. These upsides were seen in its fourth-quarter fiscal 2022 results, with the top and the bottom line increasing year over year and beating the Zacks Consensus Estimate.
That being said, Post Holdings is not immune to inflationary headwinds and supply chain-related issues.
Let’s delve deeper.
Promising Q4 Performance
In the fourth quarter of fiscal 2022, Post Holdings posted adjusted earnings from continuing operations of 85 cents per share, increasing from the 11 cents reported in the prior-year quarter. POST registered sales of $1,579.1 million, up 16.5%. The upside can be attributed to pricing actions in every segment and ongoing volume recovery across Foodservice business. The company saw sales growth in the Post Consumer Brands and Foodservice segment.
We note that Post Holdings has been gaining from strength in the Foodservice business for a while. During the fiscal fourth quarter, Foodservice sales increased 36.9% to $625.5 million. Revenues reflect the effects of inflation-driven pricing actions, the impact of commodity cost pass-through pricing model and avian influenza-driven pricing efforts. Volumes rose 3.6%. Management highlighted that its Foodservice business has completely recovered from COVID and turned profitable.
Image Source: Zacks Investment Research
Prudent Acquisitions Driving Growth
Post Holdings has been focusing on acquisitions, helping it expand its customer base. On Apr 5, 2022, Post Holdings acquired Lacka Foods Limited. Lacka Foods is a U.K.-based marketer of high-protein, ready-to-drink (RTD) shakes under the UFIT brand. Post Holdings acquired Almark Foods (or Almark) on Feb 1, 2021. Almark, which is renowned for its hard-cooked and deviled egg products, provides conventional, organic and cage-free products. Also, on Jan 25, Post Holdings acquired the Peter Pan peanut butter brand. On Jul 1, 2020, the company completed the acquisition of Henningsen Foods, Inc., which forms part of its Foodservice segment. In June 2021, the company stated that it had completed the acquisition of the PL RTE Cereal Business of TreeHouse Foods.
Several other companies in the food space, like The Kraft Heinz Company (KHC - Free Report) , Hormel Foods Corporation (HRL - Free Report) and Tyson Foods, Inc. (TSN - Free Report) , are benefiting from acquisitions.
In April 2022, Kraft Heinz acquired a majority stake in a Brazil-based condiments and sauces company — Companhia Hemmer Industria e Comercio ("Hemmer"). The buyout widened Kraft Heinz's International Taste Elevation platform and enhanced its presence across emerging markets. In January 2022, KHC acquired an 85% stake in Germany-based Just Spices GmbH (“Just Spices”). The buyout enhanced its direct-to-consumer operations and go-to-market expansion.
Hormel Foods is strengthening its business through strategic acquisitions. In June, HRL acquired the Planters snacking portfolio from Kraft Heinz. Prior to this, it acquired Texas-based pit-smoked meats company Sadler's Smokehouse in March 2020. The buyout was in sync with Hormel Foods’ initiatives to strengthen its position in the foodservice space.
Tyson Foods is focused on expanding into international markets as part of its strategic growth plan. In Jul 2022, TSN announced its strategic partnership with Tanmiah Food Company (Tanmiah) — a leading Middle East provider of fresh and processed poultry, other processed meat products, animal feed and health products. The acquisitions will allow Tyson Foods to access poultry supplies across Saudi Arabia to cater to the rising protein demand in the Middle East and other markets.
What’s Hampering Post Holdings Performance?
In its fiscal fourth-quarter earnings call, management highlighted supply chain disruptions eased slightly but continued to drive increased manufacturing costs while customer order fulfillment rates remained lower than optimal levels. The company also faced input and freight inflation in the quarter.
In addition, Post Holdings has been seeing a rise in SG&A costs for a while. The company’s SG&A expenses increased 9.9% year over year to $223.8 million in the fourth quarter of fiscal 2022.
Yet, the aforementioned upsides will likely keep POST afloat amid such hurdles.
Shares of the Zacks Rank #3 (Hold) company have gained 19% in the past six months compared with the industry’s growth of 12.3%.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.