Post Holdings reaps benefits from pet food acquisitions in Q3 2024

USA – Post Holdings, a leading manufacturer of packaged consumer goods, has reported another successful quarter, primarily driven by its expanding pet food business. 

For the third quarter of fiscal 2024, which ended on June 30, the company recorded net sales of US$1.95 billion, a 4.7% increase from last year. 

This growth is primarily attributed to the acquisition of pet food brands from The J.M. Smucker Company and Perfection Pet Foods, which bolstered the company’s overall performance despite a decline in other segments.

Gross profit for the quarter rose by 15.1% to US$577.3 million, while operating profit surged by 28.4% to US$203.2 million. Net earnings saw an 11.4% increase, reaching US$99.8 million. 

Post’s adjusted EBITDA also improved, rising 3.5% to US$350.2 million compared to the prior year. 

The pet food segment was a significant contributor, with Post Consumer Brands, which now includes the pet food business, achieving net sales of US$1.01 billion, a 15.7% increase from the previous year.

Jeff Zadoks, Executive Vice President and Chief Operating Officer of Post, highlighted the robust performance of the grocery and pet food sectors, attributing the success to strong manufacturing and improved customer fill rates. 

Despite a slight dip in consumer brand net sales and volumes, excluding the pet food acquisitions, the integration of these new businesses continues to progress well. 

The closure of the Lancaster, Ohio, plant and the planned exit from Smucker’s Transition Service Agreement (TSA) by the first half of fiscal 2025 is on track.

For the first nine months of fiscal 2024, Post reported a 17.2% increase in net sales, reaching US$5.91 billion. Gross profit grew by 30%, and operating profit rose by 35.1% to US$602.6 million. 

The company also noted a significant increase in SG&A expenses, up 28.6% to US$988.7 million, including US$26.5 million in integration costs related to the pet food acquisitions.

Post has revised its financial outlook for the full fiscal year, now expecting adjusted EBITDA to range between US$1.37 billion and US$1.39 billion. 

The company also plans to invest heavily in its pet food business, with capital expenditures projected to reach between US$420 million and US$445 million. 

This investment will focus on enhancing pet food quality, safety, and capacity, including developing a pilot plant and improving its distribution network.

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