Post Holdings, Inc. POST is set to report its third-quarter fiscal 2024 earnings on Aug 1, after market close. The company is likely to register top-line growth, while the bottom line is expected to decrease year over year.
The Zacks Consensus Estimate for third-quarter revenues stands at $2,012 million, which indicates an increase of 8.2% from the year-ago quarter’s reported figure.
Over the past seven days, the Zacks Consensus Estimate for earnings has declined by a penny to $1.21 per share. The current estimate suggests a year-over-year decline of 20.4%. POST boasts a strong record of exceeding earnings expectations, having surpassed the consensus estimate in each of the last four quarters. The average surprise during this period is 41%. The company outperformed the Zacks Consensus Estimate by 17.1% in the last reported quarter.
Post Holdings, Inc. Price, Consensus and EPS Surprise
Post Holdings, Inc. price-consensus-eps-surprise-chart | Post Holdings, Inc. Quote
Factors to Note Ahead of Q3 Earnings
Post Holdings has implemented effective pricing strategies and expanded its product offerings, contributing to potential revenue growth. By adjusting prices strategically and enhancing its product lineup, the company is better positioned to capture increased market share and respond to consumer demand, which supports revenue expansion.
The company's Consumer Brand segment, which includes grocery and pet food, is performing robustly. The grocery segment, including cereals, is benefiting from a stable market share and improving margins. Concurrently, the pet food segment is experiencing increased market share and sales volume due to targeted investments and operational improvements.
The Zacks Consensus Estimate for net sales from the Consumer Brand segment suggests a year-over-year increase of 20.7% for the fiscal third quarter. Moreover, revenues from the Weetabix segment indicate an increase of 7% from the year-ago period.
The integration of recent acquisitions, such as that of Perfection Pet, has strengthened Post Holdings’ market presence and operational capabilities. Improvements in operational efficiency, including better supply chain management and manufacturing processes, have enabled Post Holdings to optimize its production and distribution. These enhancements help the company to meet consumer demand more effectively.
However, Post Holdings has been facing declining volumes, a trend that might have continued into the fiscal third quarter. Specifically, volumes in non-retail cereal and peanut butter decreased in the last reported quarter, and overall grocery volumes have been impacted by the reduction in SNAP benefits.
Also, softness in Post Holdings' Foodservice segment remains a concern. The segment experienced a decline in net sales and volumes in the last reported quarter, primarily due to lower egg volumes from reduced restaurant foot traffic and inventory reductions at certain customers. Although the company sees growth in higher-margin pre-cooked egg products, the overall decline in volumes and revenues, combined with the removal of avian influenza price adders from the previous year, presents challenges. The Zacks Consensus Estimate for net sales from the Foodservice segment suggests a year-over-year decline of 5.3% for the quarter under discussion.
POST is grappling with inflationary pressures, particularly in sugar and labor costs. While there have been some offsets from better freight and grain costs, persistent inflation could erode profit margins. The ongoing increase in SG&A expenses, driven by targeted marketing investments, is likely to have added to cost pressures, potentially impacting profitability in the fiscal third quarter.
Earnings Whispers
Our proven model does not predict an earnings beat for Post Holdings this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. However, that’s not the case here.
Post Holdings currently carries a Zacks Rank #3 but has an Earnings ESP of -3.47%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks With the Favorable Combination
Here are three companies worth considering, as our model shows that these have the correct combination to beat on earnings this time:
Ollie's Bargain Outlet Holdings, Inc. OLLI currently has an Earnings ESP of +2.38% and sports a Zacks Rank of 1. The company is likely to register top and bottom-line increases when it reports second-quarter fiscal 2024 numbers. The Zacks Consensus Estimate for Ollie's Bargain’s quarterly revenues is pegged at $562.4 million, which indicates growth of 9.3% from the figure reported in the prior-year quarter. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Ollie's Bargain’s quarterly earnings of 78 cents suggests a rise of 16.4% from the year-ago quarter’s levels. OLLI has a trailing four-quarter earnings surprise of 10.4%, on average.
International Flavors & Fragrances Inc. IFF currently has an Earnings ESP of +21.04% and a Zacks Rank of 2. The company is likely to register a decline in the top line and an increase in the bottom line when it reports second-quarter 2024 numbers. The Zacks Consensus Estimate for International Flavors’ quarterly revenues is pegged at $2.8 billion, which indicates a decrease of 3.6% from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for International Flavors’ quarterly earnings of 91 cents suggests an increase of 5.8% from the year-ago quarter’s levels. IFF has a trailing four-quarter earnings surprise of 6.45%, on average.
Coty COTY currently has an Earnings ESP of +22.73% and a Zacks Rank #3. The company is expected to register top-line growth when it reports fourth-quarter fiscal 2024 numbers. The Zacks Consensus Estimate for COTY’s quarterly revenues is pegged at $1.38 billion, which suggests an increase of 1.8% from the prior-year quarter’s reported figure.
The Zacks Consensus Estimate for Coty’s quarterly earnings of 5 cents suggests an increase of 400% from the year-ago quarter’s levels. COTY has a trailing four-quarter negative earnings surprise of 22.1%, on average.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
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