ST. LOUIS — Consistent with industry trends, the coronavirus pandemic led to a surge in retail demand and a dramatic decrease in foodservice demand for Post Holdings, Inc. during the three months ended March 31.
Net loss attributable to common shareholders of Post Holdings in the second quarter was $191.4 million, which compared with net income of $43 million in the year-ago period. The net loss included loss on extinguishment of debt, expense on swaps and equity method losses. Adjusted net earnings were $45.5 million, which compared with adjusted net earnings of $98.4 million the year before.
Net sales totaled $1.49 billion, up 7.7% from $1.39 billion.
“We believe we are well positioned to benefit from this experience,” Robert V. Vitale, president and chief executive officer of Post Holdings, said during a May 8 earnings call. “As a general statement, compared to our competitors, our business includes a greater number of brands with lower household penetration. I would include in this category, MOM brand bag cereal, Bob Evans brand side dishes and Premier Protein brand shakes. This experience accelerated household penetration, and we expect the benefit to be long-lasting.”
Mr. Vitale described a “reengagement” within the ready-to-eat cereal category in the United States and the United Kingdom driven by “consumers who had not experienced the category in a number of years experiencing it and enjoying it and coming back to it.”
Post Consumer Brands segment profit increased 11% to $92.4 million on net sales of $507.9 million, up 11% from the year-ago period. An increase in volumes benefited from consumer pantry loading and increased at-home consumption as a result of the pandemic, as well as new product introductions, private label distribution gains and promotional and merchandising support.
Weetabix segment profit rose 19% to $28 million in the quarter as net sales increased 8.9% to $113.4 million, reflecting improved average net pricing and higher volumes due to pantry loading, which partially was offset by an unfavorable foreign exchange rate headwind.
In the Foodservice segment, which includes egg and potato products, segment profit declined 50% to $23.8 million as net sales eased 2.7% to $378.4 million. Volume declines were driven by lower demand as restaurants and other foodservice outlets closed or significantly reduced operations. Prior to the pandemic, the segment saw strong volumes in January and February for eggs and potatoes.
“Within foodservice, we have channels directly affected by COVID response and those less affected,” Mr. Vitale said. “Directly affected channels include full-service restaurants, quick-service restaurants, education and travel and lodging. These channels represent approximately 50% of segment sales. Less affected channels would include food ingredient, health care, government and other smaller channels.”
Post Holdings withdrew its full-year guidance as a result of the volatility and uncertainty within the foodservice market.
“We expect full recovery to take through fiscal '21 as channels like travel and lodging will take longer to heal,” Mr. Vitale said.
Refrigerated Retail segment profit climbed 14% to $30.2 million while net sales increased 8.2% to $237.6 million. Side dish net sales increased 23% behind improved pricing and a volume increase driven by pantry loading and increased at-home consumption. Egg product net sales declined 19% reflecting losses in branded egg product volume and lower average net selling prices.
Segment profit for BellRing Brands, which includes protein shakes, powders and nutrition bars, declined 20% to $35.1 million, reflecting higher marketing expenses and incremental public company costs. Net sales increased 19% to $257.5 million, benefiting from consumer pantry loading and distribution gains for ready-to-drink protein shakes.
For the six-month period, Post Holdings had a loss of $92.2 million, which compared with net income of $166.6 million in the first two quarters of the previous year. Net sales increased to $2.95 billion from $2.8 billion.
Shares of Post Holdings trading on the New York Stock Exchange gained $3.33 on May 8, closing at $89.64, up 3.9% from the previous close of $86.31.