|
Related Topics
|
Category: Stock Market and Post Holdings
Date: 25 November 2019 Stock Price: $99.91 We take a look at the 4th quarter earnings release of their 2019 fiscal year of Post Holdings a consumer packaged goods company that owns brands such as Malt-O-Meal, Simply Potatoes and Weetabix
|
About Post Holdings
Post Holdings, Inc., headquartered in St. Louis, Missouri, is a consumer packaged goods holding company operating in the center-of-the-store, refrigerated, foodservice, food ingredient and convenient nutrition food categories. Through its Post Consumer Brands business, Post is a leader in the North American ready-to-eat cereal category offering a broad portfolio including recognized brands such as Honey Bunches of Oats®, Pebbles™, Great Grains® and Malt-O-Meal® bag cereal. Post also is a leader in the United Kingdom ready-to-eat cereal category with the iconic Weetabix® brand.
As a leader in refrigerated foods, Post delivers innovative, value-added egg and refrigerated potato products to the foodservice channel and the retail refrigerated side dish category, offering side dishes and egg, sausage and cheese products through the Bob Evans®, Simply Potatoes®, Better’n Eggs® and Crystal Farms® brands. Post’s publicly-traded subsidiary BellRing Brands, Inc. is a holding company operating in the global convenient nutrition category through its primary brands of Premier Protein®, Dymatize® and PowerBar®. Post participates in the private brand food category through its investment with Thomas H. Lee Partners in 8th Avenue Food & Provisions, Inc., a leading, private brand centric, consumer products holding company
As a leader in refrigerated foods, Post delivers innovative, value-added egg and refrigerated potato products to the foodservice channel and the retail refrigerated side dish category, offering side dishes and egg, sausage and cheese products through the Bob Evans®, Simply Potatoes®, Better’n Eggs® and Crystal Farms® brands. Post’s publicly-traded subsidiary BellRing Brands, Inc. is a holding company operating in the global convenient nutrition category through its primary brands of Premier Protein®, Dymatize® and PowerBar®. Post participates in the private brand food category through its investment with Thomas H. Lee Partners in 8th Avenue Food & Provisions, Inc., a leading, private brand centric, consumer products holding company
Overview of Post Holdings' 4th quarter 2019 earnings report
Data below refers to the most recent quarter unless specified otherwise
- Net Sales: $1.442 billion (down from $1.629 billion from the same quarter of the previous year)
- Sales decreased by -11.5% over the last 12 months
- Cost of goods sold: $990.6 million (down from $1.115 billion for the same quarter of the previous year)
- Cost of goods sold decreased by-11.15% over the last 12 months
- Net loss: -$61.1 million (down from -$17.6 million for the same quarter of the previous year)
- Diluted loss per share: -$0.84 (down from -$0.26 for the same quarter of the previous year)
- PE ratio of Post Holdings: 45.2
- Diluted weighted-average shares outstanding: 72.9 million (up 9.5% from 66.6 million for the same quarter of the previous year)
- Cash and cash equivalents: $1.050 billion
- Cash and cash equivalents per share: $14.40
- Cash and cash equivalents makes up 14.4% of Post Holdings' market capital
- Cash and cash equivalents makes up 8.78% of Post Holdings' total assets
- Inventories: $579.8 million
- Inventories makes up 4.8% of Post Holdings' total assets
- Goodwill of Post Holdings: $4.399 billion
- Goodwill per share: $60.34
- Goodwill makes up 36.8% of Post Holdings total assets
- Stockholders equity in Post Holdings: $2.937 billion
- Stockholders equity per share: 40.28
- Post Holdings is trading at 2.48 times its stockholders equity per share which is within the expected range of between 2 and 4 that most firms tend to trade at
- Cash generated by operations for the full fiscal 2019: $688 million
- Cash generated per share for the full fiscal 2019: $9.43
Post Holdings' management commentary on their 4th quarter 2019 earnings and guidance
ST. LOUIS, Nov. 21, 2019 (GLOBE NEWSWIRE) — Post Holdings, Inc. (NYSE:POST), a consumer packaged goods holding company, today reported results for the fourth quarter and fiscal year ended September 30, 2019.
Highlights:
Weetabix
International (primarily United Kingdom) RTE cereal and muesli.
For the fourth quarter, net sales were $104.8 million, a decrease of 2.6%, or $2.8 million, compared to the prior year period, reflecting 12.5% improved average net pricing which was partially offset by an 8.5% volume decline and an unfavorable foreign exchange rate headwind of approximately 550 basis points. Segment profit was $25.5 million, a decrease of 10.8%, or $3.1 million, compared to the prior year period. Segment Adjusted EBITDA was $33.8 million, a decrease of 8.2%, or $3.0 million, compared to the prior year period.
For fiscal year 2019, net sales were $418.2 million, a decrease of 1.2%, or $5.2 million, compared to the prior year. Segment profit was $94.8 million, an increase of 8.7%, or $7.6 million, compared to the prior year. Segment Adjusted EBITDA was $128.5 million, an increase of 2.1%, or $2.6 million, compared to the prior year.
Foodservice
Primarily egg and potato products.
For the fourth quarter, net sales were $417.6 million, an increase of 4.5%, or $17.8 million, compared to the prior year period. Volumes increased 3.7%, driven by increases of 4.2% in egg volumes and 5.9% in potato volumes, which were partially offset by declines in all other products. Segment profit was $39.8 million, an increase of 4.7%, or $1.8 million, compared to the prior year period. Segment Adjusted EBITDA was $77.5 million, an increase of 6.0%, or $4.4 million, compared to the prior year period. For fiscal year 2019, net sales were $1,627.4 million, an increase of 5.1%, or $79.2 million, compared to the prior year. Segment profit was $198.4 million, an increase of 25.9%, or $40.8 million, compared to the prior year. Segment Adjusted EBITDA was $310.0 million, an increase of 12.4%, or $34.2 million, compared to the prior year.
Refrigerated Retail
Side dishes and egg, cheese and sausage products.
For the fourth quarter, net sales were $219.1 million, an increase of 2.0%, or $4.2 million, compared to the prior year period. Volumes increased 3.1%, led by a 9.4% increase in side dish volumes. Volume information for additional products is disclosed in a table presented later in this release. Segment profit was $22.3 million, an increase of 4.7%, or $1.0 million, compared to the prior year period. Segment Adjusted EBITDA was $41.4 million, an increase of 3.8%, or $1.5 million, compared to the prior year period. For fiscal year 2019, net sales were $907.3 million, an increase of 14.7%, or $116.4 million, compared to the prior year. Segment profit was $95.1 million, an increase of 5.7%, or $5.1 million, compared to the prior year. Segment profit for fiscal year 2018 was negatively impacted by integration expenses of $11.6 million, an inventory adjustment of $4.1 million resulting from purchase accounting and transaction expenses of $2.4 million, each of which was treated as an adjustment for non-GAAP measures. Segment Adjusted EBITDA was $174.6 million, an increase of 5.2%, or $8.6 million, compared to the prior year.
Active Nutrition
Post’s historical ready-to-drink (“RTD”) protein shakes, other RTD beverages, powders and nutrition bars business, which became the BellRing Brands business in conjunction with the completion of the IPO in October 2019 (as discussed later in this release).
For the fourth quarter, net sales were $214.5 million, a decrease of 2.5%, or $5.4 million, compared to the prior year period, with volumes declining 4.3%. As expected, net sales in the fourth quarter of 2019 were negatively impacted by the early delivery of RTD shakes requested by a large customer in the third quarter of 2019 to support promotional activity, resulting in a net sales headwind of approximately $15 million. Segment profit was $40.3 million, an increase of 5.2%, or $2.0 million, compared to the prior year period. Segment Adjusted EBITDA was $46.9 million, an increase of 4.7%, or $2.1 million, compared to the prior year period. For fiscal year 2019, net sales were $854.4 million, an increase of 3.3%, or $26.9 million, compared to the prior year. Segment profit was $175.1 million, an increase of 40.8%, or $50.7 million, compared to the prior year. Segment profit for fiscal year 2018 was negatively impacted by a provision of $9.0 million for a legal settlement, which was treated as an adjustment for non-GAAP measures. Segment Adjusted EBITDA was $200.8 million, an increase of 26.1%, or $41.5 million, compared to the prior year.
Highlights:
- Fourth quarter net sales of $1.4 billion; operating profit of $102.6 million; net loss of $61.1 million and Adjusted EBITDA of $303.6 million
- Fiscal year net sales of $5.7 billion; operating profit of $781.0 million; net earnings of $124.7 million and Adjusted EBITDA of $1,210.4 million
- Completed the initial public offering of a minority interest in BellRing Brands (Post’s historical Active Nutrition business) on October 21, 2019
- Fiscal year 2020 Adjusted EBITDA (non-GAAP) expected to range between $1.22-$1.27 billion including the results of BellRing Brands
Weetabix
International (primarily United Kingdom) RTE cereal and muesli.
For the fourth quarter, net sales were $104.8 million, a decrease of 2.6%, or $2.8 million, compared to the prior year period, reflecting 12.5% improved average net pricing which was partially offset by an 8.5% volume decline and an unfavorable foreign exchange rate headwind of approximately 550 basis points. Segment profit was $25.5 million, a decrease of 10.8%, or $3.1 million, compared to the prior year period. Segment Adjusted EBITDA was $33.8 million, a decrease of 8.2%, or $3.0 million, compared to the prior year period.
For fiscal year 2019, net sales were $418.2 million, a decrease of 1.2%, or $5.2 million, compared to the prior year. Segment profit was $94.8 million, an increase of 8.7%, or $7.6 million, compared to the prior year. Segment Adjusted EBITDA was $128.5 million, an increase of 2.1%, or $2.6 million, compared to the prior year.
Foodservice
Primarily egg and potato products.
For the fourth quarter, net sales were $417.6 million, an increase of 4.5%, or $17.8 million, compared to the prior year period. Volumes increased 3.7%, driven by increases of 4.2% in egg volumes and 5.9% in potato volumes, which were partially offset by declines in all other products. Segment profit was $39.8 million, an increase of 4.7%, or $1.8 million, compared to the prior year period. Segment Adjusted EBITDA was $77.5 million, an increase of 6.0%, or $4.4 million, compared to the prior year period. For fiscal year 2019, net sales were $1,627.4 million, an increase of 5.1%, or $79.2 million, compared to the prior year. Segment profit was $198.4 million, an increase of 25.9%, or $40.8 million, compared to the prior year. Segment Adjusted EBITDA was $310.0 million, an increase of 12.4%, or $34.2 million, compared to the prior year.
Refrigerated Retail
Side dishes and egg, cheese and sausage products.
For the fourth quarter, net sales were $219.1 million, an increase of 2.0%, or $4.2 million, compared to the prior year period. Volumes increased 3.1%, led by a 9.4% increase in side dish volumes. Volume information for additional products is disclosed in a table presented later in this release. Segment profit was $22.3 million, an increase of 4.7%, or $1.0 million, compared to the prior year period. Segment Adjusted EBITDA was $41.4 million, an increase of 3.8%, or $1.5 million, compared to the prior year period. For fiscal year 2019, net sales were $907.3 million, an increase of 14.7%, or $116.4 million, compared to the prior year. Segment profit was $95.1 million, an increase of 5.7%, or $5.1 million, compared to the prior year. Segment profit for fiscal year 2018 was negatively impacted by integration expenses of $11.6 million, an inventory adjustment of $4.1 million resulting from purchase accounting and transaction expenses of $2.4 million, each of which was treated as an adjustment for non-GAAP measures. Segment Adjusted EBITDA was $174.6 million, an increase of 5.2%, or $8.6 million, compared to the prior year.
Active Nutrition
Post’s historical ready-to-drink (“RTD”) protein shakes, other RTD beverages, powders and nutrition bars business, which became the BellRing Brands business in conjunction with the completion of the IPO in October 2019 (as discussed later in this release).
For the fourth quarter, net sales were $214.5 million, a decrease of 2.5%, or $5.4 million, compared to the prior year period, with volumes declining 4.3%. As expected, net sales in the fourth quarter of 2019 were negatively impacted by the early delivery of RTD shakes requested by a large customer in the third quarter of 2019 to support promotional activity, resulting in a net sales headwind of approximately $15 million. Segment profit was $40.3 million, an increase of 5.2%, or $2.0 million, compared to the prior year period. Segment Adjusted EBITDA was $46.9 million, an increase of 4.7%, or $2.1 million, compared to the prior year period. For fiscal year 2019, net sales were $854.4 million, an increase of 3.3%, or $26.9 million, compared to the prior year. Segment profit was $175.1 million, an increase of 40.8%, or $50.7 million, compared to the prior year. Segment profit for fiscal year 2018 was negatively impacted by a provision of $9.0 million for a legal settlement, which was treated as an adjustment for non-GAAP measures. Segment Adjusted EBITDA was $200.8 million, an increase of 26.1%, or $41.5 million, compared to the prior year.
Share Repurchases
During the fourth quarter of 2019, Post repurchased 2.4 million shares for $242.1 million at an average price of $99.75 per share. During fiscal year 2019, Post repurchased 3.3 million shares for $330.8 million at an average price of $98.76 per share. On September 4, 2019, Post announced that its Board of Directors had approved a new $400.0 million share repurchase authorization, with repurchases occurring over a two year period beginning on September 4, 2019. At the end of the fourth quarter of 2019, Post had $338.5 million remaining under its new share repurchase authorization.
Outlook
Post management expects fiscal year 2020 Adjusted EBITDA, including 100% contribution from BellRing and excluding any contribution from 8th Avenue and the acquisition of TreeHouse Foods’ private label RTE cereal business, to range between $1.22-$1.27 billion, with modest favorability to the second half of fiscal 2020. Post management expect Post’s fiscal year 2020 capital expenditures to range between $240-$260 million, including approximately $4 million attributable to BellRing.
During the fourth quarter of 2019, Post repurchased 2.4 million shares for $242.1 million at an average price of $99.75 per share. During fiscal year 2019, Post repurchased 3.3 million shares for $330.8 million at an average price of $98.76 per share. On September 4, 2019, Post announced that its Board of Directors had approved a new $400.0 million share repurchase authorization, with repurchases occurring over a two year period beginning on September 4, 2019. At the end of the fourth quarter of 2019, Post had $338.5 million remaining under its new share repurchase authorization.
Outlook
Post management expects fiscal year 2020 Adjusted EBITDA, including 100% contribution from BellRing and excluding any contribution from 8th Avenue and the acquisition of TreeHouse Foods’ private label RTE cereal business, to range between $1.22-$1.27 billion, with modest favorability to the second half of fiscal 2020. Post management expect Post’s fiscal year 2020 capital expenditures to range between $240-$260 million, including approximately $4 million attributable to BellRing.
Post Holdings (NYSE: POST) stock price history
The image below, obtained from Google, shows the stock price history of Post Holdings (NYSE: POST) over the last 5 years. And it's been a very good time for Post stockholders. 5 years ago the stock of Post was trading around $40 and its currently trading at $99.91. That's a strong gain of 149.8% returned to Post stockholders over the last 5 years. The stock of Post is trading at close to the mid point between its 52 week high of $113.73 and its 52 week low of $83.88 which to us is an indication that the short term sentiment and momentum of Post Holdings' stock is neutral.
Recent coverage of Post Holdings
The extract below covers the latest regarding Post Holdings as obtained from SeekingAlpha.com
Post Holdings (NYSE:POST): Q4 Non-GAAP EPS of $1.39 beats by $0.34; GAAP EPS of -$0.84 misses by $2.39.
Revenue of $1.44B (-11.7% Y/Y) beats by $30M.
Shares +0.57% AH.
Read the full article here
Post Holdings (NYSE:POST): Q4 Non-GAAP EPS of $1.39 beats by $0.34; GAAP EPS of -$0.84 misses by $2.39.
Revenue of $1.44B (-11.7% Y/Y) beats by $30M.
Shares +0.57% AH.
Read the full article here
Post Holdings (NYSE: POST) latest stock valuation
So based on Post Holdings latest earnings report and their fiscal guidance what do we value the company's stock at? Based on Post Holdings earnings report and fiscal guidance provided our valuation model gives a target (full value) price for Post Holdings at $112 a stock. We therefore believe the stock of Post Holdings is undervalued
We usually recommend that long term fundamental or value investors look to enter a stock at least 10% below our target (full value) price which in this case is $112 A good entry point into the stock of Post Holdings would therefore be at $100 or below. We expect the stock of Post to kick up from its current levels in coming weeks and months to levels closer to our target (full value) price.
We usually recommend that long term fundamental or value investors look to enter a stock at least 10% below our target (full value) price which in this case is $112 A good entry point into the stock of Post Holdings would therefore be at $100 or below. We expect the stock of Post to kick up from its current levels in coming weeks and months to levels closer to our target (full value) price.