ST. LOUIS - Post Holdings , Inc. (NYSE:POST), a prominent consumer packaged goods holding company, announced today that avian influenza has affected third-party contracted egg-laying facilities in its supply network. Despite this development, the company reaffirmed its fiscal year 2024 Adjusted EBITDA guidance, reflecting confidence in its financial projections.
The avian influenza incidents occurred at Michael Foods' contracted farms in Minnesota and Iowa, impacting about 5.7 million hens, which constitutes roughly 14% of Post's controlled egg supply. This includes both owned and contracted egg-laying operations.
Post's management has maintained its Adjusted EBITDA outlook for fiscal year 2024 in the range of $1,335-$1,375 million. This forecast does not account for a significant spread of avian influenza within its network, the financial implications of which remain uncertain.
The company relies on the APHIS division of the USDA and individual states to monitor and report incidents of avian influenza. Post has stated it will not provide further updates on the situation unless subsequent incidents lead to an additional reduction exceeding 5% of its controlled supply.
In its press release, Post emphasized the use of Adjusted EBITDA, a non-GAAP financial measure, as a critical tool for evaluating company performance and making financial decisions. This measure excludes certain expenses and may not be directly comparable to similar measures used by other companies. It is important to note that Post's forward-looking financial information is speculative and subject to change, and should not be relied upon excessively.
Post Holdings' portfolio includes Post Consumer Brands, Weetabix, Michael Foods, and Bob Evans Farms, with operations spanning the center-of-the-store, refrigerated, foodservice, and food ingredient sectors. The company also has interests in private brand food through 8th Avenue Food & Provisions, Inc.
The information in this article is based on a press release statement from Post Holdings, Inc.
InvestingPro Insights
As Post Holdings, Inc. (NYSE:POST) navigates the challenges posed by the avian influenza outbreak, its financial health and market performance provide a broader context for investors. The company's market capitalization stands at a robust $6.29 billion, with a Price/Earnings (P/E) ratio of 18.45, indicating investor confidence in its earnings potential. The adjusted P/E ratio over the last twelve months as of Q2 2024 is slightly lower at 16.91, suggesting a more favorable valuation in the eyes of investors.
One of the InvestingPro Tips highlights that management has been aggressively buying back shares, which can often be interpreted as a sign of confidence in the company's future performance. Additionally, the company's valuation implies a strong free cash flow yield, which is an attractive feature for investors looking for companies with the potential to generate cash.
Despite the impact of avian influenza on its supply chain, Post Holdings has shown solid growth with revenue increasing by 23.52% over the last twelve months as of Q2 2024. This growth is consistent with the quarterly revenue growth of 23.4% for Q2 2024. Moreover, the gross profit margin stands at 28.38%, reflecting the company's ability to maintain profitability amidst market fluctuations.
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