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Post Holdings (POST) Gains on Foodservice Business for Growth
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Post Holdings, Inc. (POST - Free Report) is benefiting from strategic pricing actions and strong results across Foodservice business. These upsides were seen in the company's second-quarter fiscal 2023 results, with the top and bottom lines increasing year over year and beating the Zacks Consensus Estimate. The consumer-packaged-goods company is expanding through acquisitions to diversify its business.
Foodservice Business: Key Factor
Post Holdings is benefiting from strength in the Foodservice business. During the second quarter of fiscal 2023, Foodservice sales increased 40.1% to $633.2 million. Revenues reflect the effects of inflation-driven pricing actions and impact of commodity cost pass-through pricing model. Volumes rose 12.1% owing to a 13.3% increase in egg volume and 10.8% in potato volume.
Segmental adjusted EBITDA was $78.1 million, up 290.5% driven by better average net pricing and volume growth. Prior to this, sales in the Foodservice segment increased 36.9% in the first and fourth quarters and 23.1% in the third quarter. Management highlighted that its Foodservice business has completely recovered from COVID and turned profitable.
Image Source: Zacks Investment Research
Other Factors Driving Growth
Post Holdings has been focusing on acquisitions, helping it expand its customer base. On Apr 28, 2023, Post Holdings completed its acquisition of select pet food brand from The J.M. Smucker Co. This acquisition will help the company access entry point into the attractive and growing pet food categories. On Apr 5, 2022, Post Holdings acquired Lacka Foods Limited. Lacka Foods is a UK-based marketer of high-protein and ready-to-drink shakes under the UFIT brand.
POST 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. In June 2021, the company stated that it had completed the acquisition of the PL RTE Cereal Business of TreeHouse Foods.
On Jan 25, 2021, 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.
Wrapping Up
Post Holdings reported robust second-quarter fiscal 2023 results wherein adjusted earnings from continuing operations of $1.10 per share increased from 24 cents reported in the prior-year quarter. POST registered sales of $1,619.9 million, up 14.9% from the year-ago period. This 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, Weetabix and Foodservice segments.
Shares of this Zacks Rank #2 (Buy) company have declined 1.4% in the past three months against the industry’s growth of 7.6%. Although shares of the company have slid in the aforementioned period, this provides a good entry point given the stock’s attractive valuation, sound fundamentals and strategic initiatives. The stock currently has a Value Score of A.
Other Stocks to Consider
Some other top-ranked stocks are Inter Parfums (IPAR), General Mills (GIS - Free Report) and e.l.f. Beauty (ELF - Free Report) .
IPAR has an expected long-term earnings growth rate of 15% and a trailing four-quarter earnings surprise of 36.2%, on average. Inter Parfums currently sports a Zacks Rank #1(Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Inter Parfums’ current financial year sales and earnings suggests growth of 15.2% and 7.3%, respectively, from the year-ago reported numbers.
General Mills is a major designer, marketer and distributor of premium lifestyle products. It currently carries a Zacks Rank of 2. GIS has a trailing four-quarter earnings surprise of 8.1%, on average.
The Zacks Consensus Estimate for General Mills’ current financial year sales and earnings suggests growth of 6.3% and 7.4%, respectively, from the year-ago reported numbers.
e.l.f. Beauty operates as a cosmetic company. It currently has a Zacks Rank of 2. ELF has a trailing four-quarter earnings surprise of 105%, on average.
The Zacks Consensus Estimate for e.l.f. Beauty’s current financial year sales and earnings suggests growth of 39.8% and 70.2%, respectively, from the year-ago reported numbers.
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Post Holdings (POST) Gains on Foodservice Business for Growth
Post Holdings, Inc. (POST - Free Report) is benefiting from strategic pricing actions and strong results across Foodservice business. These upsides were seen in the company's second-quarter fiscal 2023 results, with the top and bottom lines increasing year over year and beating the Zacks Consensus Estimate. The consumer-packaged-goods company is expanding through acquisitions to diversify its business.
Foodservice Business: Key Factor
Post Holdings is benefiting from strength in the Foodservice business. During the second quarter of fiscal 2023, Foodservice sales increased 40.1% to $633.2 million. Revenues reflect the effects of inflation-driven pricing actions and impact of commodity cost pass-through pricing model. Volumes rose 12.1% owing to a 13.3% increase in egg volume and 10.8% in potato volume.
Segmental adjusted EBITDA was $78.1 million, up 290.5% driven by better average net pricing and volume growth. Prior to this, sales in the Foodservice segment increased 36.9% in the first and fourth quarters and 23.1% in the third quarter. Management highlighted that its Foodservice business has completely recovered from COVID and turned profitable.
Image Source: Zacks Investment Research
Other Factors Driving Growth
Post Holdings has been focusing on acquisitions, helping it expand its customer base. On Apr 28, 2023, Post Holdings completed its acquisition of select pet food brand from The J.M. Smucker Co. This acquisition will help the company access entry point into the attractive and growing pet food categories. On Apr 5, 2022, Post Holdings acquired Lacka Foods Limited. Lacka Foods is a UK-based marketer of high-protein and ready-to-drink shakes under the UFIT brand.
POST 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. In June 2021, the company stated that it had completed the acquisition of the PL RTE Cereal Business of TreeHouse Foods.
On Jan 25, 2021, 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.
Wrapping Up
Post Holdings reported robust second-quarter fiscal 2023 results wherein adjusted earnings from continuing operations of $1.10 per share increased from 24 cents reported in the prior-year quarter. POST registered sales of $1,619.9 million, up 14.9% from the year-ago period. This 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, Weetabix and Foodservice segments.
Shares of this Zacks Rank #2 (Buy) company have declined 1.4% in the past three months against the industry’s growth of 7.6%. Although shares of the company have slid in the aforementioned period, this provides a good entry point given the stock’s attractive valuation, sound fundamentals and strategic initiatives. The stock currently has a Value Score of A.
Other Stocks to Consider
Some other top-ranked stocks are Inter Parfums (IPAR), General Mills (GIS - Free Report) and e.l.f. Beauty (ELF - Free Report) .
IPAR has an expected long-term earnings growth rate of 15% and a trailing four-quarter earnings surprise of 36.2%, on average. Inter Parfums currently sports a Zacks Rank #1(Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Inter Parfums’ current financial year sales and earnings suggests growth of 15.2% and 7.3%, respectively, from the year-ago reported numbers.
General Mills is a major designer, marketer and distributor of premium lifestyle products. It currently carries a Zacks Rank of 2. GIS has a trailing four-quarter earnings surprise of 8.1%, on average.
The Zacks Consensus Estimate for General Mills’ current financial year sales and earnings suggests growth of 6.3% and 7.4%, respectively, from the year-ago reported numbers.
e.l.f. Beauty operates as a cosmetic company. It currently has a Zacks Rank of 2. ELF has a trailing four-quarter earnings surprise of 105%, on average.
The Zacks Consensus Estimate for e.l.f. Beauty’s current financial year sales and earnings suggests growth of 39.8% and 70.2%, respectively, from the year-ago reported numbers.