Packaged foods company Post (NYSE: POST) missed Wall Street’s revenue expectations in Q1 CY2025, with sales falling 2.3% year on year to $1.95 billion. Its non-GAAP profit of $1.41 per share was 16.7% above analysts’ consensus estimates.
Is now the time to buy POST? Find out in our full research report (it’s free).
Post (POST) Q1 CY2025 Highlights:
- Revenue: $1.95 billion vs analyst estimates of $1.97 billion (2.3% year-on-year decline, 1% miss)
- Adjusted EPS: $1.41 vs analyst estimates of $1.21 (16.7% beat)
- Adjusted EBITDA: $324.7 million vs analyst estimates of $335 million (16.6% margin, 3.1% miss)
- EBITDA guidance for the full year is $1.45 billion at the midpoint, in line with analyst expectations
- Operating Margin: 9.3%, in line with the same quarter last year
- Sales Volumes fell 4.9% year on year, in line with the same quarter last year
- Market Capitalization: $6.14 billion
StockStory’s Take
Post’s first quarter results were shaped by ongoing consumer softness and operational challenges across several business segments. CEO Rob Vitale noted that “consumer sentiment is weak,” emphasizing the need for demand-driving efforts and consistent supply chain execution. Segment leaders described how the Foodservice team managed through difficult egg markets caused by Avian influenza, while retail businesses faced volume declines in both grocery and pet categories. The closure of a manufacturing plant last September contributed to cost improvements, but further plant closures were announced in response to persistent category declines in cereal. Management described the period as one of “navigating volume declines” and highlighted cost control measures as a primary method for offsetting pressures in their core segments.
Looking ahead, Post’s guidance is built on recovering input costs in Foodservice, stabilizing supply after Avian influenza, and further cost optimization in its Consumer Brands division. Management expects pricing actions that began in April to aid margins, assuming no additional disease outbreaks. However, CEO Rob Vitale described the current landscape as uncertain, adding that “trade policy and regulations continue to grab headlines” and may impact future plans. The company also anticipates disruption in its pet segment as it relaunches the Nutrish brand, and noted that persistent cereal category declines will offset some gains from cost-saving initiatives. Management remains focused on “balancing egg sourcing and demand” and executing plant closures to manage profitability, while also monitoring broader economic headwinds and potential changes in consumer behavior.
Key Insights from Management’s Remarks
Management attributed the quarter’s performance to cost discipline, product mix shifts, and external factors such as Avian influenza impacting egg supply and pricing. Strategic adjustments in manufacturing and a focus on higher value-added products were key responses to a challenging market backdrop.
- Avian influenza disruption: The Foodservice unit faced elevated costs and supply chain challenges due to Avian influenza, which affected egg availability. Management said that additional pricing actions were implemented in April, and they expect to recover most of the negative cost impact during the second half of the year if there are no further outbreaks.
- Cereal and pet volume declines: The Post Consumer Brands segment experienced significant declines in cereal and pet food volumes. The cereal category, in particular, saw accelerated declines, prompting the closure of two additional manufacturing plants by year-end to address excess capacity and cost structure inefficiencies.
- Mix shift in consumer behavior: In both cereal and pet categories, consumers showed a tendency to trade down to lower-priced or value offerings. Management noted that this shift benefited Post’s value-oriented brands, although the company’s share on the lower end of pet is not as strong as it is in cereal.
- Private label competition rising: Within refrigerated retail, the company observed increased competition from private label products, especially as private label quality has improved. This trend is leading to some demand erosion for branded products, particularly in side dishes.
- Integration and ramp-up challenges: The acquisition of PPI brought new manufacturing capacity and opportunities for product innovation, but management acknowledged that integration and workforce ramp-up have been slower than originally planned, partially due to employee adjustment issues.
Drivers of Future Performance
Management’s outlook for the remainder of the year centers on cost recovery in Foodservice, plant optimization in Consumer Brands, and adapting to changing consumer preferences.
- Egg supply stabilization: Management believes that recovering from Avian influenza and balancing egg sourcing will be key to restoring margins in Foodservice. They expect additional pricing actions and flock repopulation to support performance in the second half, barring further disease outbreaks.
- Cost savings from plant closures: The announced closures of two cereal plants are expected to yield $20 million in annualized savings. Management indicated that these benefits will be partially offset by ongoing volume declines unless category trends moderate, but the moves are intended to support profitability even if industry headwinds persist.
- Uncertainty in consumer demand: Ongoing consumer caution, increased private label competition, and the relaunch of the Nutrish pet food brand introduce risks to category volumes and market share. Management is monitoring broader macroeconomic pressures and expects some continued challenges in both grocery and pet segments.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will focus on (1) the pace of margin recovery in Foodservice as egg pricing actions take effect and Avian influenza risks subside, (2) the realization of cost savings from announced plant closures and their impact on Consumer Brands profitability, and (3) early performance indicators from the Nutrish brand relaunch in the pet segment. We will also monitor shifts in private label competition and consumer demand patterns as macroeconomic conditions evolve.
Post currently trades at a forward P/E ratio of 15.5×. At this valuation, is it a buy or sell post earnings? Find out in our full research report (it’s free).
High Quality Stocks for All Market Conditions
Market indices reached historic highs following Donald Trump’s presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth.
While this has caused many investors to adopt a "fearful" wait-and-see approach, we’re leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market by checking out our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today.
