US: Profits down at cereal maker Post
Higher raw material costs and lower sales hit Post's first-quarter earnings
US cereal maker Post Holdings has reported a fall in profits in its first quarterly report since its spin off from private-label manufacturer Ralcorp Holdings.
Higher raw material costs and lower sales hit Post's first-quarter earnings, the Grape Nuts owner said yesterday (8 March).
Net earnings reached US$12.8m in the three months to the end of December, down from $23.4m a year earlier. Operating profit fell 36.1% to $31.3m.
Gross margins fell 360 basis points due to higher raw material costs and "unfavourable fixed cost absorption" due to lower production volumes.
Sales slid 2% to $219.3m due to a 3% fall in volumes. Citing data from Nielsen, Post said its share of the US ready-to-eat cereal category was 11.1% in the 13 weeks to 31 December, against 11.5% a year earlier. However, Post said its share increased versus the 13 weeks to 1 October, when it was 10.3%.
The US ready-to-eat cereal sector has seen sales come under pressure in recent months. Data from Nielsen showed industry revenues were up 1% in 13 weeks to 31 December, although volumes fell 6%.
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