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Post Holdings (POST) to Shut Lancaster Unit to Optimize Network
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Post Holdings, Inc. (POST - Free Report) is on track to optimize its network to serve its customers and consumers better. The consumer-packaged-goods holding company unveiled plans to shut the Post Consumer Brands cereal production unit in Lancaster, OH. The facility, which employs 200 people, is likely to be shut down by the end of September.
The move reflects the company’s requirement to lower its capacity in the cereal production network. Management will continue to offer a diversified product portfolio for Post Consumer Brands.
Post Holdings plans to transfer the Lancaster facility production capabilities to other Post Consumer Brands manufacturing locations, which is likely to require additional capital expenditures. The move will enable management to achieve annual cost savings of $23-$25 million starting in the fiscal 2025.
Image Source: Zacks Investment Research
What Else Should You Know?
The Zacks Rank #3 (Hold) company is gaining from its focus on acquisitions, which has bolstered its portfolio. In this regard, the company expects to close the buyout of Perfection Pet in the first quarter of fiscal 2024. On Apr 28, 2023, management acquired a select pet food brand from The J.M. Smucker Co. This acquisition provides it with a compelling entry point into the attractive and growing pet food category. POST’s fourth-quarter sales included $404.5 million from its latest Pet Food acquisition.
On Apr 5, 2022, POST acquired Lacka Foods Limited, which is a U.K.-based marketer of high-protein, ready-to-drink (RTD) shakes under the UFIT brand. In June 2021, the company stated that it had completed the acquisition of the PL RTE Cereal Business of TreeHouse Foods.
Post Holdings is also gaining from effective pricing actions, as seen in the fourth quarter of fiscal 2023. Results reflected gains from pricing actions in most segments to counter inflation. Strength in the Post Consumer Brands segment has also been a driver. In the fiscal fourth quarter, Post Consumer Brands sales increased 71.5% to $1,008 million, which mainly included gains from the Pet Food acquisition.
Supply-Chain Issues Stay
Post Holdings has long been bearing the brunt of supply-chain bottlenecks. On its fourth-quarter fiscal 2023 earnings call, management stated that although the supply-chain scenario and customer order fill rates have been improving, there is still significant room for enhancement in both areas. Cost inflation is another hurdle, although it is moderating.
The stock has dropped 1.6% in the past three months compared with the industry’s decline of 3%.
The Zacks Consensus Estimate for Lamb Weston’s current financial year sales and earnings suggests growth of 28.3% and 24.8%, respectively, from the year-ago reported numbers.
The Kraft Heinz Company (KHC - Free Report) , a food and beverage product company, currently carries a Zacks Rank #2 (Buy). KHC has a trailing four-quarter earnings surprise of 9.9%, on average.
The Zacks Consensus Estimate for Kraft Heinz’s current financial year sales and earnings suggests growth of 1.1% and 6.5%, respectively, from the year-ago reported numbers.
Vital Farms Inc. (VITL - Free Report) offers a range of produced pasture-raised foods. It currently has a Zacks Rank #2. VITL has a trailing four-quarter earnings surprise of 145%, on average.
The Zacks Consensus Estimate for Vital Farms’ current financial year sales suggests growth of 29.4% from the year-ago reported figure.
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Post Holdings (POST) to Shut Lancaster Unit to Optimize Network
Post Holdings, Inc. (POST - Free Report) is on track to optimize its network to serve its customers and consumers better. The consumer-packaged-goods holding company unveiled plans to shut the Post Consumer Brands cereal production unit in Lancaster, OH. The facility, which employs 200 people, is likely to be shut down by the end of September.
The move reflects the company’s requirement to lower its capacity in the cereal production network. Management will continue to offer a diversified product portfolio for Post Consumer Brands.
Post Holdings plans to transfer the Lancaster facility production capabilities to other Post Consumer Brands manufacturing locations, which is likely to require additional capital expenditures. The move will enable management to achieve annual cost savings of $23-$25 million starting in the fiscal 2025.
Image Source: Zacks Investment Research
What Else Should You Know?
The Zacks Rank #3 (Hold) company is gaining from its focus on acquisitions, which has bolstered its portfolio. In this regard, the company expects to close the buyout of Perfection Pet in the first quarter of fiscal 2024. On Apr 28, 2023, management acquired a select pet food brand from The J.M. Smucker Co. This acquisition provides it with a compelling entry point into the attractive and growing pet food category. POST’s fourth-quarter sales included $404.5 million from its latest Pet Food acquisition.
On Apr 5, 2022, POST acquired Lacka Foods Limited, which is a U.K.-based marketer of high-protein, ready-to-drink (RTD) shakes under the UFIT brand. In June 2021, the company stated that it had completed the acquisition of the PL RTE Cereal Business of TreeHouse Foods.
Post Holdings is also gaining from effective pricing actions, as seen in the fourth quarter of fiscal 2023. Results reflected gains from pricing actions in most segments to counter inflation. Strength in the Post Consumer Brands segment has also been a driver. In the fiscal fourth quarter, Post Consumer Brands sales increased 71.5% to $1,008 million, which mainly included gains from the Pet Food acquisition.
Supply-Chain Issues Stay
Post Holdings has long been bearing the brunt of supply-chain bottlenecks. On its fourth-quarter fiscal 2023 earnings call, management stated that although the supply-chain scenario and customer order fill rates have been improving, there is still significant room for enhancement in both areas. Cost inflation is another hurdle, although it is moderating.
The stock has dropped 1.6% in the past three months compared with the industry’s decline of 3%.
3 Appetizing Food Picks
Lamb Weston (LW - Free Report) , which offers frozen potato products, sports a Zacks Rank #1 (Strong Buy). LW has a trailing four-quarter earnings surprise of 46.2%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Lamb Weston’s current financial year sales and earnings suggests growth of 28.3% and 24.8%, respectively, from the year-ago reported numbers.
The Kraft Heinz Company (KHC - Free Report) , a food and beverage product company, currently carries a Zacks Rank #2 (Buy). KHC has a trailing four-quarter earnings surprise of 9.9%, on average.
The Zacks Consensus Estimate for Kraft Heinz’s current financial year sales and earnings suggests growth of 1.1% and 6.5%, respectively, from the year-ago reported numbers.
Vital Farms Inc. (VITL - Free Report) offers a range of produced pasture-raised foods. It currently has a Zacks Rank #2. VITL has a trailing four-quarter earnings surprise of 145%, on average.
The Zacks Consensus Estimate for Vital Farms’ current financial year sales suggests growth of 29.4% from the year-ago reported figure.