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What’s the Latest News from Post Holdings?

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Price movement

Post Holdings (POST) has a market cap of $5.1 billion. It rose 1.2% to close at $78.65 per share on December 8, 2016. The stock’s weekly, monthly, and year-to-date (or YTD) price movements were 4.8%, 5.2%, and 27.5%, respectively, on the same day. POST is trading 5.4% above its 20-day moving average, 2.5% above its 50-day moving average, and 1.8% above its 200-day moving average.

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Related ETF and peers

The iShares Morningstar Mid Core ETF (JKG) invests 0.30% of its holdings in Post Holdings. The YTD price movement of JKG was 14.3% on December 8. The market caps of Post Holdings’ competitors are as follows:

  • Kellogg (K) — $25.2 billion
  • TreeHouse Foods (THS) — $4.1 billion
  • B&G Foods (BGS) — $3.0 billion

Latest news on Post Holdings

In a press release on December 8, 2016, Post Holdings reported that “it has reached an agreement to settle all class claims (asserted by direct purchasers of shell eggs) against Michael Foods, Inc. in In re Processed Egg Products Antitrust Litigation, a class action lawsuit filed in 2008 in federal court in the Eastern District of Pennsylvania. Michael Foods will settle all class claims with a $75 million payment. This litigation pertains to a timeframe that predates Post’s acquisition of Michael Foods, which was completed in June 2014.”

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It added that it “expects to record a pre-tax charge in the first quarter of its fiscal year 2017 for the settlement of this matter, which will be treated as an adjustment for purposes of calculating Adjusted EBITDA[1. earnings before interest, tax, depreciation, and amortization] and other non-GAAP[2. generally accepted accounting principles] measures. Under current law, the settlement is deductible for federal income tax purposes.”

Post Holdings’ results for fiscal 4Q16

Post Holdings reported fiscal 4Q16 net sales of $1.26 billion, a fall of 3.7% from the net sales of $1.31 billion recorded in fiscal 4Q15. The company’s gross profit margin and operating margin expanded 450 basis points and 550 basis points, respectively, between fiscal 4Q15 and fiscal 4Q16.

Its net income and EPS (earnings per share) rose to -$40.4 million and -$0.58, respectively, in fiscal 4Q16, compared with -$76.8 million and -$1.21, respectively, in fiscal 4Q15. It reported adjusted EPS of $0.61 in fiscal 4Q16, compared with $0.06 in fiscal 4Q15.

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Fiscal 2016 results

In fiscal 2016, POST reported net sales of $5.0 billion, a rise of 8.1% YoY (year-over-year). The company’s gross profit margin and operating margin expanded 550 basis points and 630 basis points, respectively, between fiscal 2015 and fiscal 2016.

Its net income and EPS rose to -$28.4 million and -$0.41, respectively, in fiscal 2016, compared with -$132.3 million and -$2.33, respectively, in fiscal 2015. It reported adjusted EPS of $2.59 in fiscal 2016, compared with $0.62 in fiscal 2015.

POST’s cash and cash equivalents and inventories rose 35.9% and 8.1%, respectively, in fiscal 2016. Its current ratio and debt-to-equity ratio rose to 3.3x and 2.11x, respectively, in fiscal 2016, compared with 2.9x and 2.08x in fiscal 2015.

Projections

Post Holdings has made the following projections for fiscal 2017:

  • adjusted EBITDA of $910 million–$950 million
  • capital expenditure of $180 million–$200 million
  • maintenance capital expenditure of $120 million–$140 million

In the next part, we’ll look at Nu Skin Enterprises (NUS).

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