- Post reported a 2.8% uptick in total sales to $1.25 billion, due largely to acquisitive growth from MOM Brands and Willamette Egg Farms, in its fiscal third-quarter earnings Thursday.
- On a comparable basis, net sales fell 4.1% year over year because of an anticipated sales decline for the Michael Foods Group unit.
- Quarterly gross profit came in at $398.2 million, or 32.0% of net sales, over $316.5 million or 26.1% of net sales in the same quarter last year. Operating profit rose 74.7% to $142.0 million, while net earnings declined 86.3% to $3.3 million for the quarter.
Post Consumer Brands, which includes the company's RTE cereals, saw net sales jump 21.7%, with the MOM Brands acquisition. Even without the new brands in its portfolio, net sales for the segment still increased 1.3% on a comparable basis because of net sales and volume growth for Malt-O-Meal branded bags and Pebbles.
Licensed brands reported declines in net sales and volume. Post Consumer Brands' performance also beat the previous reported quarter, when the segment saw a 0.8% uptick in sales on a comparable basis.
That revenue boost is notable, as other major cereal producers continue to struggle to turn around sales. Despite wide-ranging efforts in the category, Kellogg recently reported a 2% sales decline for its U.S. Morning Foods segment, which includes cereal brands. General Mills has also made changes to its cereals to boost sales, from disassociating its cereal from milk to removing artificial ingredients.
Post was previously only "cautiously optimistic on the cereal category" compared to competitors Kellogg and General Mills, which both expressed confidence in the category's impending turnaround. Yet so far, based on earnings reports, segment performance and executive attitudes aren't always in sync.
But Post's portfolio extends beyond cereal. While the Active Nutrition and Private Brands segments reported upticks in sales of 1.5% (4.7% on a comparable basis) and 0.9%, respectively, Michael Foods Group was a different story. The segment recorded an 8.3% net sales decline for the quarter but an 11.4% decline on a comparable basis, excluding the contribution of the Willamette Egg Farms acquisition.
Egg volumes continued to decrease, by 12.6% this quarter. But that was less than the 15.9% decline reported in the previous quarter, which suggests demand could be returning. However, egg sales fell 15.5% on a comparable basis, in part due to egg prices having stabilized and then recently dropping to their lowest in a decade after skyrocketing during last year's egg shortage.