In the fiscal year 2024, Post Holdings powered by Foodservice and pet food
Saint Louis — The success of Post Holding Inc.’s Foodservice division and the pet food brands it purchased in February were crucial to the company’s fiscal 2023 results. Customers who were hit by high pricing and trading down from several of the company’s branded items had pressuring outcomes.
The net income for the fiscal year that concluded on September 30th was $301.3 million, or $5.21 per share of common stock. Post Holdings reported a net income of $756.6 million in the 2022 fiscal year, or $12.07 per share. However, the results were impacted by a $437.1 million one-time benefit associated with the Bellring Brands spin-off.
Profits for the year increased significantly to $6.99 billion from $5.85 billion, mostly as a result of the pet food acquisition.
The company’s ready-to-eat cereal, pet food, and peanut butter brands are all part of the Post Consumer Brands business unit, which saw an increase in sales to $3.03 billion from $2.24 billion the previous year and a $378.8 million segment profit—a decrease from $314.6 million.
During a Nov. 17 conference call with securities analysts, Jeff A. Zadoks, interim president, chief executive officer, and chief operating officer, stated, “We had a very strong start to our entry in the pet food category and recaptured some profit margin in our domestic retail businesses through pricing, significant improvement in labor availability, and supply chain performance.”
However, Mr. Zadoks stated that a number of factors, including inflation, rising interest rates, a reduction in SNAP benefits, the resumption of student loan payments, and a decline in savings, had an effect on the overall consumer situation.
He stated, “… consumers are becoming more frugal with their spending, frequently moving into more value-oriented categories or trading down within a category.”
He said that the US cereal category volume decreased by 6% in the fourth quarter.
“We anticipate that as we lap the SNAP benefit pullback in March, the category will revert to its pre-pandemic volume trends,” Mr. Zadoks stated. We ended the quarter at 19.6%, making us the only branded share gainer this quarter in terms of shares. Given our substantial market share in these subcategories, we are in a good position to take advantage of consumers’ ongoing shift toward value in private label items.
Sales of foodservice increased from $2.10 billion to $2.43 billion. Profit for the segment more than quadrupled to $349.5 million from $151 million the previous year. The firm stated that decreased freight costs, higher average net selling prices, and a $18.2 million litigation settlement and associated legal expenditures were the main causes of the profit gain.
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Sales in the refrigerated category decreased slightly to $1.02 billion from $1.04 billion in the previous year. From $57.1 million to $69.2 million, the unit profit increased. Similar to the foodservice industry, the company credited lower freight costs and higher average net selling prices for the increase in sector profit.
Weetabix unit profit decreased to $73.9 million from $109.5 million in 2022, despite sales increasing to $512.1 million from $477.3 million the previous year.
“Looking back at Weetabix, the macro situation in the UK is still challenging,” he remarked. “We are capturing trade down into private label, albeit at lower margins, similar to US cereal.”
The CEO of the firm, Robert V. Vitale, gave an update during the call. He is now on medical leave from the company. He stated he had just had the removal of a malignant tumor and was getting ready to start a round of chemotherapy and radiation treatment.
“Jeff will continue as interim CEO while I receive this treatment,” Mr. Vitale stated. “I am very confident in him. Literally, he has been my mate since the beginning of time. In 2011, we began on the same day. He has contributed significantly to each and every