Post Holdings: Q1 FY2024 Results and Upgraded FY2024 Outlook

Non-GAAP Measures and Acquisitions Impact

For detailed information on non-GAAP measures like Adjusted EBITDA, Adjusted net earnings, Adjusted diluted earnings per common share, and segment Adjusted EBITDA, please refer to the section labeled “Use of Non-GAAP Measures” later in this release. Post reports Adjusted EBITDA guidance solely on a non-GAAP basis and does not provide a reconciliation of forward-looking Adjusted EBITDA due to the challenges in forecasting and quantifying certain amounts necessary for such reconciliation, as outlined in the “Outlook” section.

Basis of Presentation

Post’s acquisitions significantly impacted the presentation. The acquisition of a portion of The J. M. Smucker Company’s pet food business and Perfection Pet Foods, LLC, both completed on December 1, 2023, and Deeside Cereals I Ltd, completed on the same date, influenced results in the Post Consumer Brands and Weetabix segments.

First Quarter Consolidated Operating Results

In Q1, net sales rose to $1,965.9 million, a 25.5% increase, with acquisitions contributing $428.9 million. Gross profit increased to $572.6 million, a 38.0% rise. SG&A expenses were $322.9 million, up 41.2%, driven by the inclusion of Pet Food. Operating profit increased to $209.3 million, a 39.6% rise. Net earnings were $88.1 million, a 4.1% decrease.

Financial Performance by Segment

  • Post Consumer Brands: Net sales increased 78.2%, reaching $988.6 million. Segment profit rose to $132.7 million, a 67.3% increase.
  • Weetabix: Net sales grew 9.3% to $129.1 million, with a Segment Adjusted EBITDA of $30.6 million, up 3.0%.
  • Foodservice: Net sales decreased 5.6% to $567.1 million, with a Segment Adjusted EBITDA of $105.8 million, down 2.9%.
  • Refrigerated Retail: Net sales decreased 4.1% to $280.9 million, but Segment Adjusted EBITDA increased 34.0% to $53.6 million.

Interest, Gain on Extinguishment of Debt, Expense (Income) on Swaps, and Income Tax

Interest expense, net, increased to $78.1 million. Gain on extinguishment of debt was $3.1 million, compared to $8.7 million in the prior year. Expense on swaps was $21.1 million, compared to income of $12.3 million in the previous year. Income tax expense was $28.5 million, with an effective income tax rate of 24.4%.

Earnings Per Share and Share Repurchases

Diluted earnings per common share were $1.35, while Adjusted diluted earnings per common share (non-GAAP) were $1.69. Post repurchased 0.4 million shares for $36.7 million during the quarter. A new $400 million share repurchase authorization was approved, effective from February 5, 2024.

Note: Financial figures and percentages are based on the information provided in the article.

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