Third-quarter profits at Post Holdings as the US cereal firm’s product mix moved to lower-margin products and it upped trade spending.
The Grape Nuts owner also trimmed its forecast for annual adjusted EBITDA.
However, Post said its share of the US ready-to-eat cereal market, where sales are in decline, increased during the quarter.
Post booked net earnings of US$1.1m for the three months to 30 June, compared to $15.8m a year before.
Higher interest costs played a part in hitting the Post bottom line but the company also reported lower gross and operating profits.
Post reported charges linked to the closure of a plant in California. Earnings from acquired businesses helped profits but, excluding these items, gross profit was still lower thanks to the changes in the company’s product mix and higher trade spending.
Sales, however, increased 6.4% to $257.3m.
Looking ahead, Post forecast adjusted EBITDA of $214-220m, compared to an earlier estimate of $216-225m.
Click here for Post’s full statement.