Post Holdings' (POST) Q1 Earnings Miss on Cost Woes, Sales Beat
Zacks Investment Research | Feb 03, 2022 10:28PM ET
Post Holdings (NYSE:POST), Inc. industry ’s growth of 6.3%.
/h3 Q1 Details/h3
Adjusted earnings of 29 cents per share declined significantly from 72 cents reported in the prior-year quarter. The bottom line also missed the Zacks Consensus Estimate of 34 cents.
The company registered sales of $1,643.7 million, up 12.7% from $1,458 million reported in the prior-year quarter. The figure exceeded the consensus mark of 1,636 million. The upside can be attributed to strength in Post Consumer Brands, Weetabix, Foodservice, Refrigerated Retail and BellRing.
The top line included $97.8 million in net sales from acquisitions. This includes Private label ready-to-eat (PL RTE) cereal business, Egg Beaters liquid egg brand, Almark Foods business and related assets as well as Peter Pan nut butter brand.
Gross profit amounted to$424 million, down 6.9% from $455.4 reported in the year-ago quarter. Gross margin contracted from 31.2% to 25.8% in the quarter under review due to higher cost of raw material packaging and freight expenses.
The company’s SG&A expenses increased 2.5% year over year to $257.3 million. Meanwhile, SG&A expenses, as a percentage of sales, came in at 15.7%, down from 17.2% reported in the year-ago quarter.
Operating profit of $128.7 million fell 22.6% year over year. Adjusted EBITDA declined 7.5% to $263.1 million from $ 284.4 million in the prior-year quarter.
Segment Details/h3
Post Consumer Brands: Sales in the segment increased 14% year over year to $507.3 million in the quarter under review. Segment sales included $65.5 million generated from the PL RTE Cereal Business and Peter Pan.
Volumes rose 7.7%, including 1,640 basis points (bps) benefits from the aforementioned acquisitions. Excluding the gains from buyouts, volumes fell 8.7% on persistent softness in value and private label cereal products as well as losses from the decision to exit specific low-margin private label business and lapping club promotional activity in the last year period. Segmental profit was $71.3 million, up 1.1% from the prior-year quarter’s levels.
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Weetabix: Segmental sales rose 4.5% year over year to $118.6 million. Gains from favorable foreign currency movements of nearly 210 bps aided sales.
Volumes fell 4.4 due to sluggishness in all except new products as well as the lapping of higher purchases in the year-ago quarter amid increased at-home consumption and higher inventory. Segmental profit of $27.2 million decreased 3.2% year over year.
Foodservice: Sales increased 23.7% to $438.6 million in the quarter under review, including benefits of $12.7 million from the Almark acquisitions.
Volumes rose 13.3%, which includes a 150 bps benefit from the Almark buyout. The upside in volumes can be attributed to higher away-from-home egg and potato demand. Egg volumes rose 6.5% (including a 190 bps benefit from Almark) and potato volumes rallied 49.7%. Segmental profit was $15.1 million, up 39.8% year over year.
Refrigerated Retail: Sales in the segment were $273.4 million, up 3.9% from the year-ago quarter’s figures. Segment sales included $19.6 million generated from Egg Beaters and the Almark acquisition.
Volumes moved down 5.1% year over year. Excluding any benefits from Egg Beaters and the Almark buyout, volumes fell 7.3% due to softness in sausage and side dish. Segmental profit declined 31.3% year over year to $13.6 million.
BellRing Brands (NYSE:BRBR): Sales amounted to $306.5 million, up 8.5% year over year. Sales in the Premier Protein brand gained from higher average net selling prices stemming from lower promotions and higher price. Sales in the Dymatize brand increased 40.6% year on year and the same for all other products increased 3.2%. Segmental profit of $50.6 million increased 5.9% in the quarter under review.
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