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• Consolidated Net Sales: $2 billion, a 23% increase driven by recent acquisitions.

• Adjusted EBITDA: $345 million.

• Net Sales Growth Excluding Acquisitions: Declined 5% due to lower overall volumes and the impact of Foodservice pricing pass-through model.

• Supply Chain Performance: Strong with some inflation in sugar and labor costs, offset by better freight and grain costs.

• SG&A Expenses: Increased due to targeted marketing investments in retail businesses.

• Post Consumer Brands Net Sales: Increased 1% excluding Pet Food; volumes decreased 4%.

• Weetabix Net Sales: Increased 10% year-over-year; flat on a currency and acquisition neutral basis.

• Foodservice Net Sales and Volumes: Declined 12% and 2% respectively.

• Refrigerated Retail Net Sales: Decreased 8%; volumes decreased 5%.

• Cash Flow: Generated $250 million from operations.

• Net Leverage: Decreased 0.2 turn to 4.3x.

• Capital Expenditures: Approximately $100 million, focused on Pet Food business and precooked egg facility expansion.

• Debt Refinancing: Added to debt maturity runway and increased overall liquidity with a larger revolver.

• Guidance: Raised for the fiscal year, expecting balanced performance in remaining quarters.

• Warning! GuruFocus has detected 7 Warning Signs with POST.

Release Date: May 03, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Post Holdings Inc (NYSE:POST) reported a strong Q2 with continued momentum from Q1, driven by strong manufacturing performance, disciplined pricing, and solid cost management.

• The Consumer Brands segment, particularly grocery and Pet, performed well with growth driven by value offerings and strong manufacturing performance.

• The Foodservice business delivered strong results, supported by a favorable mix and customer renewals, demonstrating value to customers through excellent service levels and value-added product offerings.

• Refrigerated Retail focused on driving volumes through an improved supply chain, and Weetabix remained resilient in a challenging environment.

• Post Holdings Inc (NYSE:POST) successfully completed a debt refinancing in February, which was well-timed and expanded capital allocation options for share buybacks, leverage reduction, and M&A activities.

Negative Points

• Despite overall strong performance, volumes generally declined across several segments, influenced by reductions in SNAP benefits and a disconnect between macroeconomic statistics and consumer sentiment.

• The company noted a slowdown in restaurant foot traffic during the quarter, which could impact future Foodservice segment performance if not temporary as expected.

• Supply chain performance faced challenges with inflation persisting in areas such as sugar and labor costs, although there were some offsets from better freight and grain costs.

• Refrigerated Retail and Foodservice segments experienced volume declines, driven by distribution losses in egg and cheese products and decreases in liquid egg products, respectively.

• The company anticipates additional investments around Pet integration and distribution, which could impact short-term profitability despite the long-term benefits expected.