Post Holdings, Inc. POST reported fourth-quarter fiscal 2024 results, wherein the top and bottom lines cruised ahead of the Zacks Consensus Estimate, and sales increased year over year.

Post Holdings’ Q4 Metrics in Detail

The company posted adjusted earnings of $1.53 per share, surpassing the Zacks Consensus Estimate of $1.19. However, the bottom line declined from the adjusted earnings of $1.63 per share recorded in the year-ago quarter.

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

Net sales of $2,010.1 grew 3.3% year over year, beating the Zacks Consensus Estimate of $1,961 million. The reported figure included $67 million in net sales from the acquired Perfection Pet Foods business (concluded in December 2023).    

The gross profit of $575.4 million rose 4.4% year over year, while the gross margin expanded 30 basis points to 28.6%. 

SG&A expenses increased 10.4% to $341.7 million, whereas as a percentage of net sales, the metric expanded 110 basis points to 17%. The rise in SG&A expenses was mainly caused by escalated advertising and commercial expenditures.

The operating profit registered a robust increase of 24.8% to $190.9 million. The adjusted EBITDA was $348.7 million, down 0.1% from $349 million in the year-ago quarter.

Decoding Post Holdings’ Segmental Performance

Post Consumer Brands: The segment reported net sales of $1,047.4 million, up 3.9% year over year, including $67 million in sales from Perfection Pet Foods. Excluding the gains from Perfection, volumes fell 6.3% due to softness in co-manufactured pet food. The segment’s profit dropped 0.6% to $140.2 million, with adjusted EBITDA rising 2% to $203.7 million.

Weetabix: The segment registered 3.8% growth in net sales to $140 million, including a $6.8 million contribution from the Deeside acquisition and a positive currency impact of nearly 270 basis points. Excluding the impact of Deeside, there was a reduction of 6.5% in volumes owing to weakness in non-biscuit branded and private label products. The segment's profit surged 30.5% to $19.7 million, with adjusted EBITDA rising 30.1% to $32.4 million.

Foodservice: The segment recorded 4.7% growth in net sales to $596.1 million. The company registered a 3.6% increase in volumes, thanks to the distribution gains in eggs and potatoes. However, segmental profit and adjusted EBITDA declined 7.4% and 8.1% to $78.3 million and $107.5 million, respectively.

Refrigerated Retail: The segment sales dipped 2.9% year over year, amounting to $226.5 million. Volumes climbed 0.7%, backed by strength in side dishes and sausage, partly negated by distribution losses in cheese and lower-margin egg products. The segmental profit rose 6.7% to $12.8 million. Adjusted EBITDA jumped 2.9% to $31.6 million.

Other Financial Aspects of POST

Post Holdings ended the quarter with cash and cash equivalents of $787.4 million, long-term debt of $6,811.6 million and total shareholders’ equity of $4,101.3 million.

During the fourth quarter, Post Holdings repurchased 0.4 million shares for $48.2 million. In fiscal 2024, the company bought back 3 million shares for $300.8 million. Following the fourth-quarter end to Nov. 14, the company repurchased another 0.1 million shares for $15.9 million. As of Nov. 14, 2024, Post Holdings had $472.3 million remaining under its authorized share buyback program.

What to Expect From POST in FY25?

For fiscal 2025, management anticipates adjusted EBITDA in the band of $1,410-$1,460 million. Capital expenditures are forecasted to be between $380 million and $420 million.

This Zacks Rank #3 (Hold) company’s shares have risen 1.3% against the industry’s decline of 7.5% in the past six months.

Top Three Picks

Ingredion Incorporated INGR manufactures and sells sweeteners, starches, nutrition ingredients and biomaterial solutions derived from wet milling and processing corn and other starch-based materials. The company currently sports a Zacks Rank #1 (Strong Buy). INGR has a trailing four-quarter earnings surprise of 9.5%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Ingredion’s current financial year’s earnings indicates growth of 12.5% from the year-ago reported number.

Freshpet Inc. FRPT manufactures, distributes and markets natural fresh meals and treats for dogs and cats. It currently carries a Zacks Rank #2 (Buy). FRPT has a trailing four-quarter earnings surprise of 144.5%, on average.

The Zacks Consensus Estimate for Freshpet’s current financial-year sales and earnings indicates growth of 27.3% and 224.3%, respectively, from the prior-year reported levels.

McCormick & Company MKC, which manufactures, markets and distributes spices, seasoning mixes, condiments and other flavorful products, currently carries a Zacks Rank #2. MKC has a trailing four-quarter earnings surprise of 13.8%, on average.

The Zacks Consensus Estimate for McCormick’s current fiscal-year sales and earnings indicates growth of 0.6% and 8.2%, respectively, from the prior-year reported levels.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Freshpet, Inc. (FRPT) : Free Stock Analysis Report

McCormick & Company, Incorporated (MKC) : Free Stock Analysis Report

Ingredion Incorporated (INGR) : Free Stock Analysis Report

Post Holdings, Inc. (POST) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research