Yahoo Finance Post Holdings (POST) Q2 Earnings and Revenues Top Estimates
Post Holdings, Inc. POST reported robust second-quarter fiscal 2023 results, wherein the top and bottom lines improved year over year and surpassed the Zacks Consensus Estimate.
Results reflected pricing to counter input and freight cost inflation. While supply-chain headwinds eased a little during the quarter, these continued to lead to increased manufacturing costs and lower-than-optimal-level customer order fulfilment rates.
On Mar 10, 2022, Post Holdings concluded the distribution of 80.1% of its interest in BellRing Brands, Inc. (BellRing) to its shareholders. The historical results of the BellRing business now form part of POST’s discontinued operations. The company also concluded its previously announced acquisition of select pet food brands from The J.M. Smucker Co., effective Apr 28, 2023.
Post Holdings, Inc. Price, Consensus and EPS Surprise
Post Holdings, Inc. price-consensus-eps-surprise-chart | Post Holdings, Inc. Quote
Quarter in Detail
Adjusted earnings from continuing operations of $1.10 per share increased significantly from 24 cents reported in the prior-year quarter. The bottom line easily surpassed the Zacks Consensus Estimate of 68 cents.
POST registered sales of $1,619.9 million, up 14.9% year over year. The figure exceeded the consensus mark of $1,557 million.
The gross profit amounted to $413.8 million, up 9.3% from the $378.5 million reported in the year-ago quarter. This Zacks Rank #3 (Hold) company’s gross margin contracted from 26.8% to 25.5% in the quarter under review.
Post Holdings’ SG&A expenses increased 1.7% year over year to $239.3 million. SG&A expenses as a percentage of sales came in at 14.8%, down from 16.7% reported in the year-ago quarter. Adjusted EBITDA surged 20.3% to $276.3 million.
Segment Details
Post Consumer Brands: Sales in the segment increased 4.5% year over year to $599.1 million in the quarter under review. However, volumes declined 6.2% due to a decrease in Malt-O-Meal bag cereal and Honey Bunches of Oats, partially offset by increases in Peter Pan peanut butter and private label cereal. The segment’s adjusted EBITDA declined 0.8% to $114.4 million.
Weetabix: Segment sales inched up 6.8% year over year to $124.9 million, including the contribution of $7.7 million from the Lacka acquisition and currency headwinds of nearly 1,050 basis points. Volumes expanded 6.5%.
Excluding gains from the Lacka buyout, volumes dropped 2.3% due to a decline in biscuit and other private label products, somewhat offset by growth in private label biscuit. Segmental adjusted EBITDA of $28 million tumbled 23.1% year over year.
Foodservice: Sales increased 40.1% to $633.2 million in the quarter under review. Volumes rose 12.1%. Egg volumes rose 13.3% and potato volumes climbed 10.8%. Segmental adjusted EBITDA was $110 million, up 100% year over year.
Refrigerated Retail: Sales in the segment were $262.7 million, down 1.8% from the year-ago quarter’s figure. Volumes slipped 11.1% year over year primarily due to elasticities resulting from inflation-driven price increases. Segmental adjusted EBITDA jumped 7.3% year over year to $39.5 million.
Other Financial Details
Post Holdings ended the quarter with cash and cash equivalents of $490.7 million, long-term debt of $5,837.1 million and total shareholders’ equity of $3,483.9 million.
Cash provided by operating activities was $198.3 million for six months ended Mar 31, 2023. In the second quarter, Post Holdings repurchased 0.7 million shares for $59.7 million. In the first half of fiscal 2023, POST bought back 1 million shares for $83.7 million. As of Mar 31, 2023, the company has remaining share repurchase availability of $216.3 million.
Guidance
Post Holdings raised its fiscal 2023 expectation for adjusted EBITDA in the range of $1,090 million to $1,130 million. These include roughly $100 million of contribution from the Pet Food acquisition. POST expects capital expenditures in the range of $275-$300 million in fiscal 2023.
Shares of the company have risen 1.7% in the past six months compared with the industry’s gain of 5.8%. We also note that shares of POST gained more than 3.3% after the trading session on May 4, owing to its better-than-expected results.
Looking for Consumer Staple Stocks? Check These
Some top-ranked stocks are Inter Parfums IPAR, General Mills GIS and Kimberly-Clark Corporation KMB.
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 (Buy). 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.
Kimberly-Clark is engaged in the manufacture and marketing of a wide range of consumer products around the world. It currently has a Zacks Rank of 2. KMB has a trailing four-quarter earnings surprise of 5.1%, on average.
The Zacks Consensus Estimate for Kimberly-Clark’s current financial year sales and earnings suggests growth of 2.2% and 9.4%, respectively, from the year-ago reported numbers.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
General Mills, Inc. (GIS) : Free Stock Analysis Report
Kimberly-Clark Corporation (KMB) : Free Stock Analysis Report
Inter Parfums, Inc. (IPAR) : Free Stock Analysis Report
Post Holdings, Inc. (POST) : Free Stock Analysis Report
