Post Holdings (POST) Ups Adjusted EBITDA View on Latest Buyout
Post Holdings, Inc.’s POST acquisitions have been contributing positively to the company’s results. This consumer-packaged goods holding company has updated its adjusted EBITDA guidance for fiscal 2024, which includes 10 months of contribution from its recently concluded buyout of Perfection Pet Foods, LLC.
Management expects adjusted EBITDA in the range of $1,220-$1,280 million for fiscal 2024 compared with the $1,200-$1,260 million range guided on the fourth quarter of fiscal 2023 earnings release. In fiscal 2023, the company’s adjusted EBITDA came in at $1,233.4 million.
Perfection Foods Fuels Acquisition Spree
Post Holdings concluded the acquisition of Perfection Pet Foods on Dec 1, 2023. Perfection Pet Foods is a major producer and packager of private-label and co-manufactured pet food and baked treat products. This acquisition includes two manufacturing facilities in Visalia, CA, which will most likely enhance POST's manufacturing capacity, enabling it to insource a portion of its current pet food business. It also provides the company with an entry point into the private label and co-manufacturing pet food category.
This strategic move aligns with Post Holdings' wider objectives in the pet food industry. This was also demonstrated by the company’s previous acquisition of various pet food brands and the private-label pet food business from The J.M. Smucker Co. in April 2023. These acquisitions help diversify the company's product portfolio and create growth opportunities in the pet food industry. Notably, the company’s fourth-quarter sales included $404.5 million from its latest Pet Food acquisition.
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Post Holdings has undertaken various acquisitions over time that have strengthened its product base and have been accretive to its performance. Some notable acquisitions in the past few years include Lacka Foods Limited (April 2022), which is a U.K.-based marketer of UFIT high-protein shakes. In June 2021 and February 2021, the company acquired TreeHouse Foods' RTE Cereal Business and Almark Foods, respectively. In the same year, it purchased the Peter Pan peanut butter brand and partnered with plant-based meat company Hungry Planet.
What’s More?
The Zacks Rank #3 (Hold) company has been benefiting from effective pricing actions, as seen in the fourth quarter of fiscal 2023. Quarterly sales and earnings improved year over year, and the bottom line surpassed the Zacks Consensus Estimate. Results reflected gains from pricing actions in most segments to counter inflation. However, cost inflation has been moderating.
Shares of the company have lost 0.5% in the past three months compared with the industry’s decline of 0.9%.
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