Decline in MOM Brand sales impacts Post Q1 ready-to-eat cereal performance

By Vince Bamford contact

- Last updated on GMT

Decline in MOM Brand sales impacts Post ready-to-eat cereals results

Related tags: Mom brands, Brand, Brand management, Milk

Overall sales of Post ready-to-eat cereals were impacted by a decline in the performance of the MOM brands acquired last year, the company has reported in its results for Q1 2016.

While the acquisition of MOM Brands more than doubled total sales of the Post Consumer Brands division from $194.1m in the first quarter of 2015 to $411.6m this year, comparable figures show a net sales decline of 0.9% - or $3.8m – on flat volumes.

Volume and value growth in Pebbles, Honey Bunches of Oats and co-manufacturers was offset by declines for MOM branded products compared with the previous year, said Post, when they had benefited from heavy promotional activity.

Similarly, although consolidated sales for Post Holdings were up 16.3% year on year to $1,248.8m, this increase was primarily a result of the acquisition of MOM Brands. On a comparable basis, net sales fell 4.2% year on year, which Post attributed to anticipated declines within the Michael Foods Group and Active Nutrition segments.

Increase in EBITDA 

Adjusted EBITDA for Post Holdings was $235.6m for the first quarter, a year-on-year increase of $108m primarily driven by organic Adjusted EBITDA growth in each of Post’s segments and the acquisition of MOM Brands.

Post management has raised its fiscal 2016 Adjusted EBITDA guidance from $780m-$820m to between $810m-$840m, which it said included an anticipated increase in expenses aimed at brand building and driving incremental synergies.

Division performance

The performance of the Michael Foods Group, which includes foodservice and food ingredient businesses, was impacted by factors including a 7.5% drop in egg sales after last year’s avian influenza outbreak hit Post’s egg supply. Meanwhile, sales of cheese and other dairy products fell 10.6% as a result of reduced pricing related to lower cheese and dairy input costs.

In the Active Nutrition division, strong growth for Premier Protein shakes was offset by anticipated declines at Dymatize and PowerBar, said Post, resulting in in an 11.2% drop in net sales to $115.8m.

On a comparable basis, sales in Post’s Private Brands business - including nut butters, dried fruit & nuts, and granola -  declined 3.3%, with granola and cereal sales down 7.1% by value and 8.4% by volume.

Related topics: Cereal & Cereal Bars, Manufacturers

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