ST. LOUIS — Strong consumption trends in branded and private label cereal combined with mix improvement in value-added eggs to lift third-quarter earnings at Post Holdings, Inc.

Net earnings in the third quarter ended June 30 were $99.8 million, equal to $1.66 per share on the common stock, up 11% from $89.6 million, or $1.49 per share, in the previous year’s third quarter.  Net sales of $1.95 billion were up 4.7% from $1.86 billion in the previous year’s third quarter. Acquisitions accounted for $436.4 million of this year’s third-quarter sales.

Acquisitions included a portion of the J.M. Smucker Co.’s pet food business completed on April 28, 2023, substantially all the assets of Perfection Pet Foods, LLC completed on Dec. 1, 2023, and Deeside Cereals Ltd. completed on Dec. 1, 2023. The pet food acquisitions were included in financial results for the Post Consumer Brands segment. The Deeside Cereals acquisition was included in financial results for the Weetabix segment.

Excluding the benefit of acquisitions, sales declined in Post Consumer Brands, Weetabix, Foodservice and Refrigerated Retail.

“In Q3, we delivered another quite solid quarter that enabled us to increase our full-year guidance,” Robert V. Vitale, chief executive officer, said during an Aug. 1 conference call with analysts. “While never fully satisfied, we are quite pleased with the business performance, including recent acquisitions. I'm certain you noticed we have been aggressive in purchasing our own shares. This solid performance is against a challenging and transitioning consumer environment. Inflation is cooling the store and labor markets.”

St. Louis-based Post Holdings in its fiscal-year outlook raised its adjusted EBITDA guidance range to $1.37 billion to $1.39 billion from $1.335 billion to $1.375 billion.

In Post Consumer Brands, operating profit totaled $128.6 million, up 55% from $83 million in the same period a year ago. Sales increased 16% to $1.01 billion from $871.3 million, with $428.9 million attributed to acquisitions. Excluding the benefit of acquisitions, volumes decreased 6% in the quarter, primarily driven by declines in branded and non-retail cereal.

“Within grocery, cereal volumes were challenged, although we performed better than the category as we slightly increased branded share in both dollars and pounds,” said Jeff A. Zadoks, chief operating officer. “Carryover pricing combined with excellent operating and supply chain performance continue to be the main profit drivers within grocery. Cereal category volume finished the quarter down 4.1%.

“… We continue to expect category volumes will normalize to the historical CAGR (compound annual growth rate) of down approximately 1% to 2%.”

In Refrigerated Retail, operating profit was $5.1 million, down 72% from $18 million. Net sales declined 7.1% to $214.4 million from $230.7 million. Volumes decreased 0.5%, as growth in side dishes was offset by losses in lower margin egg products, Post said.

“Our refrigerated retail business had a significant pullback in profitability,” Zadoks said. “While we were encouraged to see dinner and breakfast sides volumes up 4% and 6%, respectively, this growth came against significantly higher-than-expected freight cost. We are recalibrating these investments and anticipate sequential segment profit improvement in the fourth quarter.”

Egg and potato products primarily make up Post’s Foodservice business, which experienced a 17% decline in operating profit to $89.6 million. Net sales in the segment fell 5.4% in the third quarter to $589.1 million from $622.7 million. Volumes increased 1.5%, primarily reflecting increases due to distribution gains in both eggs and potatoes.

“We had a good quarter with very strong product mix,” Zadoks said of the Foodservice business. “In addition, we benefited from the final run out of avian influenza pricing related to the November 2023 outbreak as well as elevated customer promotions in the quarter. Overall, egg volumes were flat despite slowing restaurant foot traffic. However, our mix continued to improve with 15% volume growth in our highest margin precooked egg products. Lastly, we continue to encounter some delays in achieving our full ready-to-drink shake manufacturing run rates.”

In Weetabix, profit increased 35% to $24.1 million from $17.9 million. Sales increased narrowly, moving up to $136.1 million from $134.2 million, with $7.5 million attributed to Deeside. Excluding the impact of Deeside, volume increased 5.6%, primarily driven by decreases in branded products.