Post Holdings Inc (POST) Q3 2025 Earnings Call Highlights: Strong EBITDA and Strategic ...

Yahoo

09-08-2025

Adjusted EBITDA: Approaching $400 million for Q3.
Net Sales: $2 billion, a 2% increase driven by Avian Influenza pricing and volume growth in cold chain businesses.
Post Consumer Brands Net Sales: Decreased 9% due to lower volumes in Grocery and Pet.
Cereal Volumes: Decreased 6% year-over-year.
Pet Volume Decline: Accelerated to 13% year-over-year.
Foodservice Net Sales: Increased 19% with a 7% volume increase.
Refrigerated Retail Net Sales: Increased 9% with a 1% volume increase excluding PPI impact.
Weetabix Net Sales: Increased 1% with a 3% volume decrease driven by noncore discontinuations.
Free Cash Flow: Approximately $95 million.
Share Buybacks: Approximately 1.6 million shares repurchased in Q3, totaling 8% of the company fiscal year-to-date.
Net Leverage: 4.3 times, adjusted to 4.5 times post-8th Avenue acquisition.
Adjusted EBITDA Guidance: Increased to a range of $1.5 billion to $1.52 billion.
Warning! GuruFocus has detected 6 Warning Signs with POST.
Release Date: August 08, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
Post Holdings Inc (NYSE:POST) reported strong Q3 results with adjusted EBITDA approaching $400 million, despite a challenging macro environment.
The acquisition of 8th Avenue was completed, bringing clear synergies within nut butter and granola to the Post portfolio.
The company has been aggressive in share buybacks, repurchasing 8% of the company fiscal year-to-date.
Recent tax law changes are expected to result in a $300 million reduction in cash taxes paid over the next five years.
Foodservice and Refrigerated Retail segments showed strong performance, benefiting from temporary Avian Influenza-driven pricing and increased volumes.
Negative Points
Post Consumer Brands faced volume challenges, with cereal category volumes down 4.1% year-over-year and pet volume consumption down 3.7%.
The Nutrish brand relaunch in the Pet segment is taking longer than anticipated, extending the brand recovery timeline.
The broader M&A environment remains challenged due to market volatility, impacting potential transactions.
Tariffs and regulatory changes to food ingredients continue to increase costs and create uncertainty.
Cereal volumes decreased 6% due to category dynamics, with private label seeing steeper declines than branded.
Q & A Highlights
Q: Can you provide some key factors to consider for fiscal '26, especially regarding Foodservice and the pet turnaround? A: Robert Vitale, President and Chief Investment Officer, stated that while they are still in the planning process for '26, normalizing Foodservice for the AI impact suggests an on-algorithm year. The key factors include the contribution from 8th Avenue, cost savings from asset optimization, and the shake co-packing dynamic. Matthew Mainer, CFO, added that they feel good about prospects for next year off a normalized '25.
Q: Why is private label underperforming branded cereal in the category? A: Robert Vitale mentioned that the pricing opportunity for private label is not as compelling as it has been compared to branded. Matthew Mainer added that their private label in cereal skews to Walmart, which has seen a pullback in food traffic, impacting their exposure.
Q: Regarding Foodservice performance, was the pricing recovery of costs incurred in 2Q fully reflected in Q3? A: Matthew Mainer explained that the recovery of Q2 costs largely happened in Q3, and they continue to see elevated egg markets. Jeff Zadoks, Interim CEO, added that there is normal pricing taken as contracts are renegotiated, contributing to year-over-year changes.
Q: How do you view the M&A landscape, and what is your appetite for more acquisitions? A: Robert Vitale noted that uncertainty in base earnings due to tariffs and ingredient changes impacts opportunities. Despite low multiples, they find share buybacks attractive. They remain open-minded to transactions, balancing external opportunities with internal ones like share buybacks.
Q: What are your thoughts on the cereal category and potential new entrants with deeper pockets for innovation? A: Robert Vitale commented that the acquisition of WK Kellogg by a larger company could enhance the category. However, they are hesitant to make further comments until the transaction closes.
Q: How is the 8th Avenue business performing, and are there any changes to expected contributions this year? A: Matthew Mainer stated there are no material changes to this fiscal year's contribution. The business saw a pullback in performance due to uncertainty but is expected to improve next year. There is no significant seasonality to note.
Q: What are your plans for portfolio adjustments in response to higher input costs and regulatory changes? A: Jeff Zadoks mentioned they will take a pragmatic approach to reformulation and innovation, focusing on protein-enhanced cereals and other targeted products. They do not anticipate major changes in fiscal '26.
Q: Are there plans to issue bonds or a term loan to finance the 8th Avenue acquisition long-term? A: Matthew Mainer indicated they are monitoring the markets closely and may consider it an option in the future. Currently, they are in a good position from a cash flow and liquidity standpoint, so there is no rush.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.