Post Holdings Inc (POST) 2026 Q1 法說會逐字稿

Welcome to the Post Holdings first-quarter 2026 earnings conference call and webcast. (Operator Instructions)

I'd now like to turn the call over to Daniel O'Rourke, Investor Relations for Post. Please go ahead.

Good morning. Thank you for joining us today for Post's first-quarter fiscal 2026 earnings question-and-answer session. This call is being recorded, and an audio replay will be available on our website at postholdings.com.

During today's call, we may make forward-looking statements which are subject to risks and uncertainties that should be carefully considered by investors, as actual results could differ materially from these statements. These forward-looking statements are current as of the date of this call, and management undertakes no obligation to update these statements.

The press release that supports today's call is posted on both the Quarterly Results and the SEC Filings section of our website under the Investors section and is available on the SEC's website. This call will discuss certain non-GAAP measures. For reconciliation of these non-GAAP measures to the nearest GAAP measure, see our press release issued yesterday and posted on our website.

I'm joined this morning by Rob Vitale, our President and CEO; Nico Cattogio, our COO; and Matt Mainer, our CFO and Treasurer.

We're doing things a little differently this quarter as we posted management remarks last night in the Investors section of our website. Our rationale for this change is to give you additional time to digest our commentary in advance of this call. In addition, given our M&A activity, our convertible debt structure, and the magnitude of recent share repurchases, we wanted to bridge our enterprise value calculation, which is furnished as an appendix to our posted remarks.

I hope you've had a chance to review this document. The key highlights are that fiscal '26 is off to a great start as we delivered Q1 adjusted EBITDA well above expectations. This operating performance, coupled with an update to our Foodservice normalized run rate, allowed us to significantly increase our guidance. We have continued aggressive share repurchases so far this year, and our strong operating performance, along with our Q1 sale of the 8th Avenue Pasta business, has allowed us to hold net leverage flat. And from this position, we continue to maintain significant flexibility for opportunistic capital allocation.

With that, I'll turn the call back over to the operator to open up Q&A.

(Operator Instructions) Andrew Lazar, Barclays.

Howdy.

Great. Thanks so much. Good morning, everybody.

Before we jump in, say, welcome, Nico?

Yes. And welcome, Nico, congratulations on the COO role. And good morning, everybody, and thanks for putting out the prepared remarks last night. That's really helpful.

Maybe Rob to start off, obviously, Post has been aggressively buying back stock for some time now as that's where obviously the company sees the best way to deploy free cash flow at the moment. But obviously, we've seen market valuations for a bunch of small cap growth your food companies dropped pretty meaningfully over the past year, yet there really still hasn't been much in the way of M&A activity including for one that Post obviously has great familiarity with. I guess, are market valuations still not yet attractive enough for some of these maybe smaller public entities to warrant thinking a bit differently about capital allocation? I guess as my first question.

Well, I think that, that is certainly changing as the multiples change. Whether it's exactly where it needs to be yet or no, I think is in the eye of the -- but I think as that multiples come down, M&A becomes a much more interesting measure.

Great. And then maybe just as a second one. I was curious to maybe explore the comments in the prepared remarks about the cereal category recently returning to its more historical down low single-digit pace from what had been more significant declines. Is it simply that it's a more affordable breakfast option at a time when we see more value-seeking behavior? Or do you think there's maybe a little bit something more enduring.

Now we say it as that. I mean, if you see, it is very recent. So there's a significant change in trajectory that happened in November, December, and that coincides with SNAP. So we see it as an outcome of changes in SNAP and trade down from other caters to cereal, not only cereal. Remember, we now have a significant presence in peanut butter.

Peanut butter also improved in the same period. So for now, we see it as trade down. We need to see what happens in the next few months, a few more months to actually have the confidence that it's a change in the category.

Great. Okay. I'll pass it on. Thank you.

Matt Smith, Stifel.

Hi. Good morning, all. Matt. Thanks for taking my question. The guidance raise after this first strong first quarter includes the higher unique benefit and higher normalized earnings from Foodservice business. But can you talk about your expectations for the rest of the business through the rest of the year relative to your initial expectations? Have you factored in some perhaps lower EBITDA contribution from PCB? Is that investment related? Or are things pretty similar to your initial expectations?

Yes, Matt. I'd say the balance of the portfolio is pretty similar to our initial outlook. Obviously, we make adjustments in tweaks here and there when we think about the totality of the portfolio and our guidance, but there's nothing material I'd call out.

Thanks for that. And as a follow-up, on the stronger normalized Foodservice earnings base, you saw some nice volume growth both in overall eggs and the highest value-added eggs. Can you talk about some of the timing benefits in the quarter? And how you expect volumes to progress from here, especially in the higher value-added egg segment? Thank you.

Sure. So definitely, obviously, some favorability when you think about year-over-year relative to some impacts from Avian influenza last fiscal year and also in the current year, as we talked about and started in Q4, we were getting customer inventories reloaded, got that completed this quarter. So a couple of transitory benefits that fall away as we think about sequential movement into Q2. I think we see the balance of the year more in line with both from a mix standpoint and just overall a growth more in line with historical and how we think about the business, which is a 3% to 4% growth rate with a mix benefit getting us to our algorithm.

That's great, Matt. Thank you. I'll pass it on.

David Palmer, Evercore ISI.

Hey, good morning, guys. Yeah, a question on the cereal category. I wonder how are you seeing the category today, competitor behavior and strategies and maybe reflect on your own spending. We obviously made a new hire with Greg, who will be coming on and maybe he'll have some impressions and thoughts about this, but a major competitor of Post has been investing heavily, some combination of price promotion, marketing, innovation and those investments may be hurting. It seems like it's hurting private label more than anything lately. You guys have done a good job of protecting profitability and arguably, we'll just have to see if the other guys spending is worth it, so to speak, in the long-term. But how do you reflect on this and what's going on? And how does that maybe shape your strategy going forward in cereal.

Our strategy. I think what you saw in the quarter -- in the first quarter was reduction in our promotional spend because we are adjusting our assortment in channels that are more promotional driven to increase our efficiency. And as we adjusted the assortment on shelf, we decided to promote less. It's just to our disruptions. Longer-term, we don't see a change in our strategy.

I think we will continuously assess opportunities to invest. And if we see the return, we will go for it, but I don't see a material change in our strategy.

Are you -- I mean 1 follow-up here is that competitor in addition to price, which may or may not make sense for the category long-term, if it seems like the premium brands are the ones that are winning, that competitor is also doing some stuff in protein, granola. Does even that sort of angle or is that an opportunity for you and even something that might shape your M&A aspirations in the category? And I'll pass it on.

I think we are also investing in the same areas. I think we are all doing that. I mean protein, fiber, granola. So you will see a lot more of that from us for sure. And some of that is actually coming to market now as we speak. On M&A, I think it's always the same.

I would say that it hasn't really changed our M&A strategy. We continue to be opportunistic when we have the opportunity to be so. So we are not looking at a particular category or a map in a particular segment of our business.

Thank you.

Tom Palmer, JPMorgan.

Good morning, and thanks for the question. I wanted to start off just asking on clarity on the cadence for the year over the EBITDA. It was mentioned kind of being more stable as we think about 2Q, 3Q and 4Q, but there also was a call out about some inventory timing benefits to think about in the second quarter for Foodservice. So is -- what's kind of the offset we should be thinking about in 2Q, maybe within other segments that might make it more balanced versus having that kind of one item providing a bit of strength?

Sure. I think -- so there's -- when you think about refrigerated retail, Q1 is by far the highest quarter given the amount of holiday benefit we have there. We still have Easter, which is in early April. So that full benefit will lie in Q2, but there's definitely a step down just from seasonality in that business. That's probably the biggest offset.

And then we typically across the portfolio of Foodservice is an exception given how hard we are running our plants. We usually have some holiday shutdown that will put a little negative pressure on Q2 just across the portfolio as we have the deleveraging impact is realized. But I'd say those are the 2 things that really offset that benefit, and it's -- we're not expecting a massive benefit for Foodservice. When you think about selling through that inventory, but it will be elevated relative to what we think in Q3 and Q4.

Okay, thank you for that. And then just on the RTD shakes plan, does your kind of key customers slower growth have any bearing on your plans to ramp it? And maybe an update on kind of how that ramp is going?Thank you.

Yes. Starting with the ramp. We continue to make progress on the actual volume output. I think we still admittedly have challenges around the cost and the efficiency of the production. So still not at our run rate.

So I think we continue to work on that. I think we're trying our best, it's a $500 million business that's showing really nice strength and growth and don't want to overemphasize the shake business. So we're putting the right amount of attention there and trying to balance that, but we'll see how that plays out. I don't think there's really -- when we think about the category and the longer-term opportunity, I don't see any concerns there is more trying to get where we want to be in terms of our run rate and profitability and then we'll think about expansion after that.

Great. Thank you.

Michael Lavery, Piper Sandler.

Thank you. Good morning. Back to Foodservice and some of how to think about the normalized run rate. We've seen it drifting higher course and times that you could beat it quite easily. But maybe just help us understand some of what makes the increase sticky now? Is it primarily mix maybe how much conservatism would the $125 million or so a quarter have? And what drove the upside in 1Q?

Yes. So again, I think it's -- I mean we're back to the value proposition of the business. So I think we feel good about that run rate and the stickiness of it. And as we think that's a run rate for this year, that's got some level of embedded growth in it. But as you think to next year, I think we feel good about our ability to grow off of that just because of the same dynamics of the business and what we're seeing in terms of our value proposition, helping operators take labor out of their system.

Those are all in the right spot and make economic sense for operators. And there's still a nice runway when you think about converting folks from shell eggs over into value-added eggs. So really the same dynamics we've seen for quite a few years. We're just back to more normalized supply and demand dynamic.

That's helpful. And just on PCB, price/mix was down a little bit more than it has been. Can you just point to what some of the key drivers are there and how to think about what the consumer dynamics are related to that?

We mentioned in the remarks, in cereal, our volume was a bit behind the category, driven by lower promotional spend. And that's essentially that's the gap. And some adjustments in assortment that take a bit of pounds out of our business. As we mentioned in the remarks, what we see as very positive our dollar market share was flat year-over-year, and that's what we want. And then in Pet, we -- our volume was a bit behind the category, mostly driven by Nutrish.

And then the difference between consumption, measure and our shipments was also our private label business. We're lapping some distribution losses in our private level Pet business.

So I may have said it wrong, I apologize. I thought a lot of volume color was pretty clear, but I was curious a little bit on the pricing piece because it looks like that was about a 2-point headwind -- was that pet driven primarily? Or where was the...

Thanks for the question. It is pet driven. It is -- we mentioned in the remarks, we tested price points mostly on Nutrish in select retailers. And those are the price points that we will target in the relaunch. So that is a headwind in terms of price mix. It is all pet.

And if that was a more narrow... If that was a more narrow... Sorry, go ahead.

Were you talking about total EBITDA margin, John?

This is Michael. No, I was talking about top line, the price mix and just trying to if that was a price test on Nutrish that pushed it down a little bit in first quarter and then that rolls out more broadly in the second half, should we expect a bigger -- should that price mix headwind likely grow over the rest of the back half especially?

We will -- as we relaunch the brand, we will hit those price points with a change in price pack architecture. So the price per pound should improve.

Okay. All right. Thanks a lot.

Thank you.

John Baumgartner, Mizuho Securities.

Hey, good morning. Thanks for the question. I wanted to ask Rob about refrigerated retail. And specifically, what you're seeing thus far from the new private label business in the early days and maybe your expectations to expand that book of business going forward?

So good early start for private label. I'd say playing out as we expected. We've got that in 2 customers, really 2 offerings, mashed potatoes and mac and cheese. We continue to see a nice pipeline of opportunities to expand that business. But for this year, it's providing definitely some growth on our dinner sides and I'd say, adding to price points similar to what we've seen in PCB having that alternative, especially in that category, we think will be really beneficial long-term and use some of the excess capacity we have across the network. So there's a leverage benefit as well.

Thanks, Matt. And then related to that, some of the past innovation for the side dishes product line has included vegetables and such. And given that we're now seeing some frozen entrees entering the market specifically for the GLP-1 crowd, I'm wondering how you think about any differently about how the side dishes portfolio can compete. I mean, are there potentially new lines that can appeal to different demographics or incorporate more protein with sausage, eggs, other parts of your portfolio? Are you thinking any differently about how that line competes going forward given changes in the consumer environment?

Certainly, we're focused on protein and options to add protein to our sides and then also -- we've done some testing with (inaudible), which is a different product for us a couple of years ago. We're starting to see some success there, albeit small within the club channel. But again, I think we are giving you some thought to adding some protein as well to those -- some of those dinner side dishes.

Thank you. Thanks for your time.

Scott Marks, Jefferies.

Hey, good morning. Thanks for taking your questions. First, I wanted to ask about in the prepared remarks, you noted that in Foodservice, the Avian influenza driven pricing adders have ended. But given, I think, the magnitude of deflation we've seen in the egg market, how should we be thinking about pass-through of that within your Foodservice segment or potentially the Refrigerated Retail segment as well? Thanks.

Yes. So now that we've got inventory levels rebalanced, I would say, going forward, our supply is matched up with demand. So we become agnostic to egg prices and that it's, to your point, back to a pass-through model. So there is a pass-through that's basically on a 90-day lag. So there can be a little bit of timing, but we don't see over the course of the year, any significant volatility from that model historically.

Appreciate it. And then second question, almost related to what John asked about in terms of the GLP-1 friendly options. Earlier this year, we saw the US refresh its dietary guidelines recommendations for what consumers should be eating. Wondering if that at all changes how you're thinking about the portfolio or any adjustments you think need to be made because of that? Thanks.

I think our portfolio is pretty well balanced with the guidelines. So we are obviously going to consider the nutrient but also the price from an M&A perspective. So I would say, once we get closer to where the values are, we have -- we'll have a position on how the pyramid implicates us.

Thanks. I'll pass it on.

Marc Torrente, Wells Fargo Securities.

Hi, good morning and thank you for the questions. Going back to pet, the category itself, particularly dog has been softer. What do you think in terms of trends there? And what are your expectations for the category near-term? And then your own pet volumes were a bit better sequentially, some puts, takes in terms of private label losses versus integration labs. But underlying is starting to stabilize a little more. How are you thinking about recovery there through the year in terms of volumes?

On the category, we will probably -- we don't see any major changes in the recent trends. The recent trends, as you said, is dog has been softer compared to at the cat segment. And that is driven by some changes, whether it's urbanization and all those trends that are driving the cat segment. So we don't see material changes. In terms of our business, as you rightly said, it's sequentially getting better.

A lot of that is, as we mentioned, Nutrish and gravy train improvements driven by price points that we tested and our expectation is as we relaunched those runs and it should help the brands that's our expectation. But as you said, it is -- it would give us confidence is that the business is sequentially getting better, volume is sequentially getting better.

Okay. And then you called out the successful closure of 2 of your cereal facilities in the quarter. How should we think about the cost savings benefit flow through from those actions? And then given some of the normalization of the consumption trends, are there still other actions that you're considering for the segment?

I think we mentioned in prior quarters, the benefits from the plants that we shut down should mostly hit our P&L. Starting in Q3. So Q3 and Q4 will see the benefit. And then -- after that, we will have to be very selective in what we do. I mean we streamline our portfolio could be aligned here and there, but no plans.

Okay. Thank you very much.

Thank you. With no further questions in queue, this will conclude today's Post Holdings first-quarter 2026 earnings conference call and webcast. Please disconnect your lines at this time, and have a wonderful day.