St. LOUIS — The recent expansion of Post Holdings, Inc. in the pet food space seems to be paying off for the company, which on Feb. 1 shared its first quarter fiscal 2024 financial results from the three-month period ended December 31, 2023.
Just days before sharing its first quarter financial performance, Post Holdings announced the return of President and Chief Executive Officer Robert V. Vitale, who left the company unexpectedly on medical leave in November 2023. interim CEO Jeff Zadoks in his position as the company’s executive vice president and chief operating officer.
“I thank my family, my great medical team, my colleagues at Post, and everyone who supported me,” Vitale commented. “I’m excited and excited about what we can do in 2024 and beyond.”
Net sales for Post Consumer Brands, a segment that includes the company’s cereal, pet food and peanut butter products, were $988.6 million in the quarter, up 78.2% year-over-year. This includes $426.6 million in sales directly related to Post Holdings’ recent acquisitions, including the purchase of several pet food brands formerly owned by The JM Smucker Co. in April 2023, as well as its acquisition of Perfection Pet Foods in December 2023.
“Pet food exceeded our expectations as strong manufacturing performance supported growth in our value brands, and we saw encouraging signs of stabilization in our premium brands,” Zadoks said. . “We started making investments in this business that we talked about last quarter. However, some costs have increased more slowly than we expected.”
First quarter volumes were down for Post Consumer Brands when excluding the acquisition benefit. Segment revenue reached $132.7 million, up 67.3% year-over-year, and reported segment adjusted EBITDA at $189.8 million, up 68.1% year-over-year.
“Our business continues to benefit from diversity in product, channel and price point. Because of this, our volume story is a bit of a mixed bag,” said Vitale. “We saw volume decline in our branded retail businesses, but foodservice remains resilient, our value offer benefited from consumer trade down, and we saw encouraging stabilization of our refrigerated retail site business. Both the grocery and pet divisions of our Consumer Brands platform performed well.
“We continue to be very pleased with our investment in the pet category,” he added.
Overall, the company posted net sales of approximately $1.97 billion in the first quarter of fiscal 2024, up 25.5% from the first quarter of fiscal 2023. These revenues included $428.9 million from acquisitions. Quarterly gross profit for the company came in at $572.6 million or 29.1% of sales, up 38% year-over year but down slightly as a percentage of last year’s net sales.
The company saw increased SG&A expenses totaling $322.9 million in the quarter, up 41.2% year-over-year, primarily due to the company’s new pet food division. The company incurred $6.5 million in integration costs from the assimilation of its recently established pet food division.
For the full fiscal year 2024, Post Holdings raised its adjusted EBITDA expectations to between $1.22 billion and $1.28 billion. Annual capital expenditures are expected to cost the company between $420 million and $445 million, of which up to $100 million will be dedicated to improving quality, safety, capacity and distribution for its pet food segment, as well as the investment in a pilot plant for the business.
“From a network and supply chain perspective, we are focused on optimizing our cereal manufacturing network,” added Zadoks. “Similarly, for pet, we are working on optimization as we prepare to exit the Smucker’s manufacturing contract and integrate Perfection Pet into our network.”
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