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Here's How Post Holdings (POST) is Placed Before Q3 Earnings

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Post Holdings, Inc. (POST - Free Report) is likely to register a year-over-year increase in its top and the bottom line when it releases third-quarter fiscal 2021 results on Aug 5, after the closing bell. The Zacks Consensus Estimate of $1,502 million for quarterly revenues indicates growth of more than 12% from the year-ago quarter’s reported number.

The consensus estimate for the quarterly earnings has been stable in the past 30 days at 94 cents, suggesting an increase of 25.3% from the year-earlier quarter’s tally. We note that Post Holdings has a trailing four-quarter negative earnings surprise of 11.1%, on average.

Key Factors to Note

Post Holdings’ performance in the fiscal third quarter is most likely to have been driven by the contributions from acquisitions of Henningsen, Peter Pan and Almark. The company has also been experiencing strength across its BellRing Brands and Refrigerated Retail segments for a while now.

While the BellRing Brands unit is gaining from strategic investments; higher promotional activity; favorable product and customer mix, the Refrigerated Retail unit is benefiting from a favorable mix and an increased average net pricing in side dish products.

Post Holdings’ cost-reduction and innovation efforts are also on track. Management remains encouraged about innovation across protein and snacking categories. The company’s branded products are performing impressively. All the aforesaid factors might have bolstered the company’s performance in the to-be-reported quarter.

On the flip side, softness across the Food service unit is a perennial concern for Post Holdings. This is due to weak away-from-home demand, resulting from the adverse impacts of the pandemic on various foodservice channels like full-service restaurants, quick-service restaurants, lodging, education and travel. The company has been witnessing input cost inflation and higher selling, general and administrative expenses for a while. On the company’s earnings call for the fiscal second quarter, management stated that inflation is likely to remain a hurdle in the near term.

It further said that due to a severe labor shortage at its key manufacturing locations, the company is not being able to cater to burgeoning demand. This crisis is likely to linger through September at least.

Such downsides might have depressed the company’s margins during the quarter under review. On the last earnings conference call, management projected adjusted EBITDA to be $590-$620 million for the second half of fiscal 2021.

What the Zacks Model Unveils

Our proven model doesn’t conclusively 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. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Although Post Holdings’ Earnings ESP is +3.98%, it has a Zacks Rank #5 (Strong Sell), a combination that leaves surprise prediction inconclusive.

Stocks Poised to Beat Estimates

Here are some companies you may want to consider as our model shows that these have the right combination of elements to beat on earnings this season.

Medifast (MED - Free Report) currently has an Earnings ESP of +7.27% and a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Chewy (CHWY - Free Report) has an Earnings ESP of +20.00% and a Zacks Rank #2 at present.

Tyson Foods (TSN - Free Report) currently has an Earnings ESP of +11.17% and a Zacks Rank #3.


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