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11/22/2021

Post private label up in Q4

Post Holdings' private label ready-to-eat cereal business and its 8th Avenue private brand subsidiary saw solid sales increases for the quarter.
Dan Ochwat
Executive Editor
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The private brand supplier 8th Avenue Food & Provisions saw a slight bump in sales for the fourth quarter.

Post Holdings, which owns a 60.5% common equity interest in the company, a manufacturer of private brand peanut and other nut butters, pasta, granola, dried fruit and nut products, reported the division saw net sales increase 3.2% or $7.3 million for the period. Total net sales reached $236.3 million for the quarter ending Sept. 30.

The company did register a net loss of $16.1 million, a decrease of 631.8%, or $13.9 million, compared to the prior year period. Adjusted EBITDA was $14.8 million, a decrease of 34.5%, or $7.8 million, compared to the prior year period. For fiscal year 2021, net sales were $900.8 million, a decrease of 2.5%, or $23.4 million, compared to the prior year. Net loss was $24.3 million, a decrease of 279.7%, or $17.9 million, compared to the prior year. Adjusted EBITDA was $75.2 million, a decrease of 20.2%, or $19.0 million, compared to the prior year.

For the Post Consumer Brands division, which includes the acquisition of the TreeHouse ready-to-eat cereal business, net sales in the fourth quarter were $521.7 million, an increase of 10.6%, or $49.8 million, compared to the prior year period, and included $66 million in combined net sales from the private label ready-to-eat cereal business and the Peter Pan brand acquisitions. Volumes increased 7.4% (including a 1,270 basis point benefit from the private label ready-to-eat cereal and Peter Pan). 

Another division of St. Louis-based Post Holdings is its Weetabix U.K. ready-to-eat cereal business and the Muesli brand, which saw Q4 2021 net sales reach $127.2 million, an increase of 11.9%, or $13.5 million, compared to the prior year period, and reflected a favorable foreign currency exchange rate tailwind of approximately 710 basis points. Volumes were flat as growth in new product introductions, private label and drink products was offset by declines in all other products. These declines were driven by lapping increased purchases in the prior year period, per the Post financial report, resulting from increased at-home consumption in reaction to the COVID-19 pandemic.

Post Holdings as an entirety reported net sales for Q4 at $1.7 billion, up 20.1% or $284.3 million vs. the same period a year ago. Gross profit was $428.5 million, or 25.3% of net sales, a decrease of 2.7%, or $11.8 million, compared to $440.3 million, or 31.2% of net sales, in the prior year period. Results for the fourth quarter of 2021 reflect the ongoing volume demand recovery of the Foodservice segment, strong growth at BellRing Brands and pricing actions, which were more than offset by input and freight inflation and higher manufacturing costs. Labor shortages and supply chain disruptions drove manufacturing inefficiencies during the fourth quarter of 2021, resulting in missed sales, declines in throughput and higher per unit product costs.