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Post Holdings (POST) Up 20% YTD on Solid Pricing & Buyouts
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Post Holdings, Inc.’s (POST - Free Report) focus on effective pricing actions keeps it well-positioned for growth. The consumer-packaged goods company is undertaking buyouts to augment portfolio strength and boost revenues. Strength in Post Consumer Brands has been a growth driver.
The Zacks Rank #1 (Strong Buy) stock has increased 20% year-to-date compared with the industry’s 4.3% growth. The stock has comfortably outperformed the Zacks Consumer Staples sector’s 6.8% growth in the same period.
Let’s discuss in detail all the factors driving growth.
Image Source: Zacks Investment Research
Pricing: Key Driver
Post Holdings has been benefiting from strategic pricing actions undertaken to counter inflationary headwinds. The trend continued in the first quarter of fiscal 2024, with the top and the bottom line increasing year over year and surpassing the Zacks Consensus Estimate. Higher average net selling prices drove the Post Consumer Brands and Weetabix segments’ performance. The persistence of this trend is likely to keep hurting the company’s performance.
Strategic Acquisitions
Post Holdings intends to strengthen its business on the back of strategic acquisitions. In December 2023, the company acquired Perfection Pet, which is part of its Post Consumer Brands segment. On Apr 28, 2023, Post Holdings acquired a select pet food brand from The J.M. Smucker Co. Such an acquisition provides the company with a compelling entry point into the attractive and growing pet food category. In December 2023, the company also acquired Deeside Cereals to form a part of its Weetabix segment. In the first quarter of fiscal 2024, the company’s net sales included $428.9 million from acquisitions. These buyouts are expected to continue boosting performance in the forthcoming period.
Post Consumer Brands Solid
Post Holdings has been reaping benefits from growing Post Consumer Brands. In the fiscal first quarter, segmental net sales of $988.6 million jumped 78.2%, primarily owing to $426.6 million in sales from acquisitions. The company’s pet food and grocery business delivered impressive results in the segment. The Pet food business performed better than expected on the back of solid manufacturing performance. The Grocery business gained from carryover pricing. Segment profit showed significant growth, up 67.3% to $132.7 million, with adjusted EBITDA rising 68.1% to $189.8 million. This reflects strong operational performance and acquisition synergies.
All said, strength in the Post Consumer Brands, along with a focus on other upsides, is likely to keep the company in investor’s good books.
The Zacks Consensus Estimate for The Chef’s Warehouse’s current fiscal year sales and earnings suggests growth of 8.7% and 4.7%, respectively, from the year-ago reported numbers.
Vital Farms Inc. (VITL - Free Report) offers a range of produced pasture-raised foods. It currently carries a Zacks Rank #2. VITL has a trailing four-quarter average earnings surprise of 155.4%.
The Zacks Consensus Estimate for Vital Farms’ current financial-year sales and earnings suggests growth of 18.6% and 35.6%, respectively, from the year-ago reported numbers.
Utz Brands Inc. (UTZ - Free Report) manufactures a diverse portfolio of salty snacks, currently carrying a Zacks Rank #2. UTZ has a trailing four-quarter earnings surprise of 2.6% on average.
The Zacks Consensus Estimate for Utz Brands’ current financial-year earnings suggests growth of 19.3% from the year-ago reported numbers.
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Post Holdings (POST) Up 20% YTD on Solid Pricing & Buyouts
Post Holdings, Inc.’s (POST - Free Report) focus on effective pricing actions keeps it well-positioned for growth. The consumer-packaged goods company is undertaking buyouts to augment portfolio strength and boost revenues. Strength in Post Consumer Brands has been a growth driver.
The Zacks Rank #1 (Strong Buy) stock has increased 20% year-to-date compared with the industry’s 4.3% growth. The stock has comfortably outperformed the Zacks Consumer Staples sector’s 6.8% growth in the same period.
Let’s discuss in detail all the factors driving growth.
Image Source: Zacks Investment Research
Pricing: Key Driver
Post Holdings has been benefiting from strategic pricing actions undertaken to counter inflationary headwinds. The trend continued in the first quarter of fiscal 2024, with the top and the bottom line increasing year over year and surpassing the Zacks Consensus Estimate. Higher average net selling prices drove the Post Consumer Brands and Weetabix segments’ performance. The persistence of this trend is likely to keep hurting the company’s performance.
Strategic Acquisitions
Post Holdings intends to strengthen its business on the back of strategic acquisitions. In December 2023, the company acquired Perfection Pet, which is part of its Post Consumer Brands segment. On Apr 28, 2023, Post Holdings acquired a select pet food brand from The J.M. Smucker Co. Such an acquisition provides the company with a compelling entry point into the attractive and growing pet food category. In December 2023, the company also acquired Deeside Cereals to form a part of its Weetabix segment. In the first quarter of fiscal 2024, the company’s net sales included $428.9 million from acquisitions. These buyouts are expected to continue boosting performance in the forthcoming period.
Post Consumer Brands Solid
Post Holdings has been reaping benefits from growing Post Consumer Brands. In the fiscal first quarter, segmental net sales of $988.6 million jumped 78.2%, primarily owing to $426.6 million in sales from acquisitions. The company’s pet food and grocery business delivered impressive results in the segment. The Pet food business performed better than expected on the back of solid manufacturing performance. The Grocery business gained from carryover pricing. Segment profit showed significant growth, up 67.3% to $132.7 million, with adjusted EBITDA rising 68.1% to $189.8 million. This reflects strong operational performance and acquisition synergies.
All said, strength in the Post Consumer Brands, along with a focus on other upsides, is likely to keep the company in investor’s good books.
Other Appetizing Food Bets
The Chef’s Warehouse (CHEF - Free Report) , which engages in the distribution of specialty food products, currently carries a Zacks Rank #2 (Buy). CHEF has a trailing four-quarter earnings surprise of 3.2%, on average. You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
The Zacks Consensus Estimate for The Chef’s Warehouse’s current fiscal year sales and earnings suggests growth of 8.7% and 4.7%, respectively, from the year-ago reported numbers.
Vital Farms Inc. (VITL - Free Report) offers a range of produced pasture-raised foods. It currently carries a Zacks Rank #2. VITL has a trailing four-quarter average earnings surprise of 155.4%.
The Zacks Consensus Estimate for Vital Farms’ current financial-year sales and earnings suggests growth of 18.6% and 35.6%, respectively, from the year-ago reported numbers.
Utz Brands Inc. (UTZ - Free Report) manufactures a diverse portfolio of salty snacks, currently carrying a Zacks Rank #2. UTZ has a trailing four-quarter earnings surprise of 2.6% on average.
The Zacks Consensus Estimate for Utz Brands’ current financial-year earnings suggests growth of 19.3% from the year-ago reported numbers.