Post Holdings has posted notable growth in its pet food business, reporting increased profits even as its market share in the category remained flat for the fourth quarter of 2024. The company shared these results during its financial earnings report for the fourth quarter and fiscal year ending September 30, 2024.
In a Nov. 15 earnings presentation, CEO Robert Vitale explained that in fiscal year 2024, the company’s pricing strategies effectively aligned with rising input costs, allowing for continued improvement in manufacturing and supply chains. “We are now in an attractive position to return to algorithmic growth,” he said, citing the success of Post’s diversified portfolio and value-added products, which helped offset the challenges posed by a tough consumer environment.
Post’s pet food business is part of its broader Consumer Brands division, which also includes North American products like ready-to-eat cereals and peanut butter.
For the fourth quarter, the Consumer Brands division generated net sales of $1.05 billion, a 3.9% year-over-year increase. Of this, $67 million was attributed to the acquisition of Perfection Pet Foods. Excluding this acquisition, the segment experienced a 6.3% volume decline, primarily driven by a decrease in co-manufactured pet food. Despite this, the division’s segment profit was $140.2 million, a slight decrease of 0.6%, while adjusted EBITDA increased by 2% to $203.7 million.
For the full fiscal year, net sales for Post’s Consumer Brands division reached $4.12 billion, a significant 35.5% increase compared to the previous year. Segment profit jumped 42.9% to $541.2 million, and adjusted EBITDA rose 35.9% to $786 million.
However, excluding the Perfection acquisition, net sales for the division decreased by 3%, with volumes down 6%. This decline was partly due to a repatriation of pet food manufacturing from Smucker’s in the first quarter. Despite these challenges, Perfection Pet Foods contributed to better-than-expected branded cereal performance and improved manufacturing and supply chain costs.
In the pet food segment, consumption volume dropped by around 2%, mainly due to reduced distribution of Nutrish and price sensitivity in Gravy Train. However, Post noted that its market share in pet food remained stable, with signs of stabilization in premium brands.
Post’s overall fourth-quarter net sales increased by 3.3%, reaching $2 billion, up from $1.95 billion the previous year. This growth was driven by the Foodservice business, which helped offset declines in the Consumer Brands division. Gross profit for the quarter rose 4.4% to $575.4 million, while operating profit surged by 24.8% to $190.9 million.
Net earnings for the quarter were $81.6 million, marking a 24.2% increase from the previous year, while adjusted EBITDA remained flat at $348.7 million.
For the 2024 fiscal year, Post’s overall net sales reached $7.92 billion, up 13.3% from $6.99 billion in 2023. Gross profit increased by 22.5% to $2.30 billion, and net earnings rose by 21.7% to $366.7 million.
Looking ahead to fiscal year 2025, Post is forecasting adjusted EBITDA between $1.41 billion and $1.46 billion. The company also plans to invest between $380 million and $420 million in capital expenditures, focusing on expanding its pet food capacity and safety measures.
In the pet food sector, Post is shifting its focus from stabilizing its brands to strengthening its premium offerings in 2025. This includes a relaunch of Nutrish at the beginning of the year. CEO Vitale emphasized the importance of investing in the premium brands, noting that these had been neglected for a period.
The company also plans to optimize its pet food facility network, particularly in the West, following its recent acquisitions. Vitale indicated that additional benefits from this network optimization may not be fully realized until 2026.
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