Post Holdings: Bird Flu Means Uncertainty, Consumer Portfolio Dips in Q1 Earnings
Bird flu is expected to create sourcing and pricing issues for Post Holdings, the company announced during its Q1 earnings call this morning, as two of its third-party farm partners were hit by the disease last month and uncertainty continues to rock its supply stability.
On a call with investors and analysts, Post COO Jeff Sadix – who led the call in place of president and CEO Robert Vitale, who was out sick – said that although the company saw its higher-value egg products grow volumes over 5% in the quarter, this current wave of avian influenza is expected create headwinds “in the range of $30 million to $50 million” in Q2.
Sadix noted that Post has historically been able to successfully adjust prices through past bird flu outbreaks and the company is “confident in our ability to navigate through the current landscape.”
Post Holdings reported net sales of nearly $2 billion, up 0.4% year-over-year, with operating profit of $214.1 million and gross profit up 4% to $595.3 million (30.1% of net sales). Fiscal year 2025 adjusted EBITDA guidance was raised to the range of $1.42 billion to $1.46 billion.
Net sales growth in foodservice was offset by a decline in its Post Consumer Brands portfolio, including lower volumes in pet foods, as well as drops for refrigerated retail and its U.K.-focused Weetabix division.
Post Consumer Brands, which includes its North America cereals, peanut butter and pet foods, reported net sales of $963.9 million, a 2.5% drop year-over-year (roughly $24.7 million). Pet food volumes dropped a stark 13% due to rationalization and pricing.Cereal volumes were down 2.3%, due to category declines, the company said.
“The macro environment remained challenging with continued pressure on the consumer and therefore collective volumes across our sector,” Sadix said on the call. “Adding to this, the new administration and its potential policies have driven uncertainty across the consumer landscape. We continue to see an active pipeline of potential M&A transactions both large and small.”
Sadix added later on the call that he believes there will be more M&A activity in the industry coming in the future, and that Post remains open to opportunities for potential transactions.
“We think we’re well positioned to entertain any opportunity that would come forward, be it large or small, given where we are with our leverage compared to levels we’ve had in the past as well as the cash flow profile that we have,” he said.
