Post Holdings, Inc.

Please stand by, your meeting is about to begin. Welcome to the Post Holdings First Quarter 2026 Earnings Conference Call and Webcast. At this time, all participants have been placed on a listen-only mode and the floor will be open for your questions following the presentation. If you would like to ask a question at that time, please press star 1 on your telephone keypad. If at any point your question has been answered, you may remove yourself from the queue by pressing star 2. so that others can hear your questions clearly, we ask that you pick up your handset for best sound quality. Lastly, if you should require operator assistance, please press star zero. I'd now like to turn the call over to Daniel O'Rourke, Investor Relations for Post. Please go ahead.

Good morning. Thank you for joining us today for Post's first quarter fiscal 2026 earnings question and answer session. This call is being recorded and an audio replay will be available on our website at postholdings.com. During today's call, we may make forward-looking statements which are subject to risks and uncertainties that should be carefully considered by investors as actual results could differ materially from these statements. These forward-looking statements are current as of the date of this call and management undertakes no obligation to update these statements. The press release that supports today's call is posted on both the quarterly results and the SEC filing section of our website under the investor section and is available on the SEC's website. This call will discuss certain non-GAAP measures. For reconciliation of these non-GAAP measures to the nearest GAAP measure, see our press release issued yesterday and posted on our website. I'm joined this morning by Rob Vitale, our President and CEO, Nico Cattoggio, our COO, and Matt Maynor, our CFO and Treasurer. We're doing things a little differently this quarter as we posted management remarks last night in the investor section of our website. Our rationale for this change is to give you additional time to digest our commentary in advance of this call. In addition, given our M&A activity, our convertible debt structure, and the magnitude of recent share repurchases, we wanted to bridge our enterprise value calculation, which is furnished as an appendix to our posted remarks. I hope you've had a chance to review this document. The key highlights are that fiscal 26 is off to a great start as we delivered Q1 adjusted EBITDA well above expectations. This operating performance coupled with an update to our food service normalized run rate allowed us to significantly increase our guidance. We have continued aggressive share repurchases so far this year, And our strong operating performance, along with our Q1 sale of the 8th Avenue pasta business, has allowed us to hold net leverage flat. And from this position, we continue to maintain significant flexibility for opportunistic capital allocation. With that, I'll turn the call back over to the operator to open up Q&A.

The floor is now open for your questions. At this time, if you have a question or comment, please press star 1 on your telephone keypad. If at any point your question has been answered, you may remove yourself from the queue by pressing star 2. Again, we ask that you pick up your handset when posting your question to provide optimal sound quality. Thank you. Our first question will come from Andrew Lazard with Barclays. Please go ahead.

Howdy. Great. Thanks so much. Good morning, everybody.

Can I just... Can I just, before you jump in, say welcome, Nico, to the service.

Yep, and welcome, Nico, and congratulations on the COO role. And good morning, everybody, and thanks for putting out the preparator marks last night. That's really helpful. Maybe, Rob, to start off, obviously Post has been aggressively buying back stock for some time now, as that's where obviously the company sees the best way to deploy free cash flow at the moment. But obviously we've seen market valuations for, you know, a bunch of small-cap growthier food companies drop pretty meaningfully over the past year, yet there really still hasn't been much in the way of M&A activity, including for one that Post obviously has great familiarity with. I guess are market valuations still not yet attractive enough for some of these maybe smaller public entities to warrant thinking a bit differently about capital allocation, I guess is my first question.

Well, I think that that is certainly changing as the multiples change. Whether it's exactly where it needs to be yet or no, I think is in the eye of the . But I think as that multiples come down, MA becomes a much more interesting measure.

Great. Well, thank you for that. And then maybe just as a second one, I was curious to maybe explore the comments and the prepared remarks about the cereal category recently returning to, you know, it's more historical down low single-digit pace from what had been more significant declines. Is it simply that it's, you know, a more affordable breakfast option at a time when we see more value-seeking behavior, or do you think there's maybe a little bit something more enduring to it?

Well, now we see it as that. I mean, if you see, it is very recent. So, there's a significant change in trajectory that happened in November, December, and that coincides with SNAP. So, we see it as an outcome of changes in SNAP and trade-on from other calories to cereal. Not only cereal. Remember, we now have a significant presence in peanut butter. Peanut butter also improved in the same period. So, for now, we see it as trade-on. We need to see what happens in the next few months to actually have the confidence that it's a change in that habit. Great. Okay. I'll pass it on. Thank you.

We'll turn now to Matt Smith with Stiefel. Please go ahead. Your line is open.

Hi. Good morning, all. Matt, thanks for taking my question. Good morning. The guidance raised after this first strong first quarter includes the higher unique benefit and higher normalized earnings for food service business. But can you talk about your expectations for the rest of the business through the rest of the year relative to your initial expectations? Have you factored in some, you know, perhaps lower EBITDA contribution from PCB? Is that investment related or are things pretty similar to your initial expectations?

Yeah, Matt, I'd say the balance of the portfolio is pretty similar to our initial outlook. Obviously, we make adjustments and tweaks here and there when we think about the totality of the portfolio and our guidance, but there's nothing material I'd call out.

Thanks for that. And as a follow-up, on the stronger normalized food service earnings base, you saw some nice volume growth both in overall eggs and highest value-added eggs. Can you talk about some of the timing benefits in the quarter and how you expect volumes to progress from here, especially in that higher value-added egg segment? Thank you.

Sure. So definitely, obviously, some favorability when you think about year over year relative to some impacts from avian influenza last fiscal year. And also in the current year, as we talked about and started in Q4, we were getting customer inventories reloaded, got that completed this quarter. So a couple transitory benefits that fall away as we think about sequential changes. movement into Q2, I think we see the balance of the year more in line with both from a mixed standpoint and just overall egg growth more in line with historical and how we think about the business, which is a 3% to 4% growth rate with a mixed benefit, you know, getting us to our algorithm.

That's great, Matt. Thank you. I'll pass it on.

Hey, David. Thank you.

We'll turn now to David Palmer with Evercore ISI. Please go ahead.

Hey, good morning, guys. Yeah, question on the serial category. I wonder, you know, how are you seeing the category today, you know, competitor behavior and strategies, and maybe reflect on your own spending. We obviously made a new hire with Greg, who will be coming on, and maybe he'll have some impressions and thoughts about this. But a major competitor of posts has been investing heavily. Some combination of price promotion, marketing innovation, and those investments may be hurting. It seems like it's hurting private label more than anything lately. You guys have done a good job of protecting profitability. And, you know, arguably, we'll just have to see if the other guys spending is worth it, so to speak in the long term. But, you know, how do you reflect on this and what's going on, and how does that maybe shape your strategy going forward in cereal?

I would say it hasn't changed our strategy. I think what you saw in the quarter, in the first quarter, was it changed. Reaction in our promotional spend because we are adjusting our assortment in channels that are more promotional driven to increase our efficiency. And as we... adjusted the assortment on shelf, we decided to promote less, just to avoid the fractions. Longer term, we don't see a change in our strategy. I think we will continuously assess opportunities to invest, and if we see a return, we will go for it, but I don't see a material change in our strategy.

Are you, I mean, one follow-up here is, you know, that competitor in addition to price, which may or may not make sense for the category long term, if it seems like the premium brands are the ones that are winning. You know, that competitor is also doing some stuff in protein, granola. You know, does even that sort of angle or is that an opportunity for you and even something that might shape your M&A aspirations in the category? And I'll pass it on.

I think we are also investing in the same. We are all doing that. I mean, protein, fiber, granola. So you will see a lot more of that from us, for sure. And some of that is actually coming to the market now, as you speak. But M&A, I think, is always the same.

I would say that it hasn't really changed our M&A strategy. We continue to be opportunistic when we have the opportunity to be so. So, you know, we are not looking at a particular category or a, you know, map in a particular segment of our businesses. Thank you.

Now we'll hear from Tom Palmer with J.P. Morgan. Please go ahead.

Good morning, and thanks for the question. I wanted to start off just asking on clarity on the cadence for the year with EBITDA. It was mentioned kind of being more stable as we think about 3Q or 2Q, 3Q, and 4Q, but there also was a call-out about some I think inventory timing benefits to think about in the second quarter for food service. So what's kind of the offset we should be thinking about in 2Q, maybe within other segments that might make it more balanced for us having that kind of one item providing a bit of strength?

Sure. I think, so there's, when you think about refrigerated retail, Q1 is by far their highest quarter given the amount of holiday benefit we have there. We still have Easter, which is in early April, so that full benefit will lie in Q2, but there's definitely a step down just from seasonality in that business. That's probably the biggest offset. And then we typically, across the portfolio, food service is an exception given how hard we are running our plants. We usually have some holiday shutdown that'll put a little negative pressure on Q2 just across the portfolio as we have the deleveraging impact is realized. But I'd say those are the two things that really offset that benefit, and we're not expecting a massive benefit for food service when you think about selling through that inventory, but it will be elevated relative to what we think in Q3 and Q4. Okay.

Thank you for that. And then... Just on the RTD shakes plan, does your kind of key customers, slower growth, have any bearing on your plans to ramp it? And maybe an update on kind of how that ramp is going.

Thank you. Starting with the ramp, we continue to make progress on the actual volume output. I think we still admittedly have challenges around the cost and the efficiency of that production. So, Still not at our run rate, so I think continue to work on that. I think we're trying to balance, obviously, as we talk about food service. It's a $500 million business that's showing really nice strength and growth and don't want to overemphasize the shake business, so we're putting the right amount of attention there and trying to balance that, but we'll see how that plays out. I don't think there's really, when we think about the category and the longer-term opportunity, I don't see any concerns there. It's more trying to get where we want to be in terms of a run rate and profitability, and then we'll think about expansion after that. Great. Thank you.

We'll turn now to Michael Avery with Piper Sandler. Please go ahead.

Thank you. Good morning. Good morning. Back to food service and some of how to think about the normalized run rate, we've seen it drifting higher, of course, and times that you could beat it quite easily. But maybe just help us understand some of what makes the increase sticky now. Is it primarily mixed? Maybe how much conservatism would the 125 or so a quarter have and what drove the upside in one queue?

Yeah, so, again, I think it's – I mean, we're back to the value proposition of the business. I think we feel good about that run rate and the stickiness of it. And as we think, you know, that's a run rate for this year that's got some level of embedded growth in it. But as you think to next year, I think we feel good about our ability to grow off of that just because of the same dynamics of the business and what we're seeing in terms of our value proposition, helping operators take labor out of their system. those are all, you know, in the right spot and make economic sense for operators. And there's still a nice runway when you think about converting folks from shell eggs over into value-added eggs. So really the same dynamics we've seen for quite a few years. We're just back to a more normalized supply and demand dynamic. That's helpful.

And just on PCB, price mix was down a little bit more than it has been. Can you just point to what some of the key drivers are there and how to think about what the consumer dynamics are related to that?

Same. We mentioned in the remarks, in serial, our volume was a bit behind the category driven by lower promotional costs. And that's, essentially, that's the gap. And some adjustments in assortment that take a bit of pounds out of our business. As we mentioned in the remarks, what we see as very positive is our dollar market share was flat year over year, and that's what we want. And then in pet, our volume was a bit behind the category, mostly driven by nutrition. And then the difference between consumption measured and our shipment was also a private-level business, overlapping some distribution losses in our private-level pet business.

So I may have said it wrong. I apologize. I thought the volume color was pretty clear, but I was curious a little bit on the pricing piece because it looks like that was about a two-point headwind. Was that pet-driven primarily or – Where was the?

Yes. Yeah. Okay. Thanks for the question. It is pet-driven. It is, we mentioned in the remarks, we tested price points mostly on nutrition in select retailers, and those are the price points that we will target in the relaunch. So that is a headwind in terms of price mix. It is all pets.

And if that was a more narrow – if that was a more narrow – Were you asking – Sorry, go ahead.

Were you talking about total and EBITDA margin, John? This is Michael.

No, I was talking about top line, the price mix. And just kind of – if that was a – price test on Nutrish that pushed it down a little bit in first quarter, and then that rolls out more broadly in the second half. Should we expect a bigger – should that price mix headwind likely grow over the rest of the back half especially?

We will – as we relaunch the grant, we will hit those price points with a change in price pack architecture. So the price per pound – Should improve. Okay. All right. Thanks a lot. Thank you.

We'll turn now to John Baumgartner with Mizuho Securities. Please go ahead.

Hey, good morning. Thanks for the question. Good morning. I wanted to ask Rob about refrigerated retail and specifically what you're seeing thus far from the new private label business, how that's evolving relative to plan here in the early days, and maybe your expectations to expand that book of business going forward.

Sure. So a good early start for private label. I'd say playing out as we expected. We've got that in two customers, really two offerings, mashed potatoes and mac and cheese. We continue to see a nice pipeline of opportunities to expand that business. But for this year, it's providing, you know, definitely some growth on our dinner sides and restaurants. I'd say adding two price points, similar to what we've seen at PCB. Having that alternative, especially in that category, we think will be really beneficial long-term and uses some of the excess capacity we have across the network, so there's a leverage benefit as well.

Thanks, Matt. And then related to that, you know, some of the past innovation for the side dishes product line has included vegetables and such. And, you know, given that we're now seeing some frozen entrees entering the market specifically for that GLP-1 crowd, I'm wondering how you think about any differently about how the side dishes portfolio can compete. I mean, you know, are there potentially new lines that can appeal to different demographics or incorporate more protein with sausage, eggs, other parts of your portfolio? Are you thinking any differently about how that line competes going forward given changes in the consumer environment?

Certainly we're focused on protein and options to add protein to our sides. And then also, you know, we've done some testing with Wunderlish, which is a different product for us a couple years ago. We're starting to see some success there, albeit small within the club channel. But, again, I think we are giving some thought to adding some protein as well to some of those dinner side dishes.

Great. Thank you. Thanks for your time.

We'll turn next to Scott Marks with Jefferies. Please go ahead.

Hey, good morning. Thanks for taking your questions. First thing I wanted to ask you about, in the prepared remarks, you noted that in food service, the avian influenza-driven pricing adders have ended. But given, I think, the magnitude of deflation we've seen in the egg market, how should we be thinking about pass-through of that within your food service segment or potentially the refrigerated retail segment as well?

Yep. So now that we've got inventory levels rebalanced, I would say going forward, our supply is matched up with demand. So we become agnostic to egg prices. And then it's, to your point, back to a pass-through model. So there is a pass-through that's basically on a 90-day lag. So there can be a little bit of timing, but we don't see over the course of a year any significant volatility from that model historically.

Appreciate it. And then second question, almost related to what John asked about in terms of the GLP-1 friendly options. Earlier this year, we saw the U.S. refresh its dietary guidelines, recommendations for what consumers should be eating. Wondering if that at all changes how you're thinking about the portfolio or any adjustments you think need to be made because of that. Thanks.

I think our portfolio is pretty well balanced with the guidelines. So, you know, we are obviously going to consider the nutrient, but also the price from an M&A perspective. So I would say once we get closer to where the values are, we'll have a position on how the pyramid implicates us.

Thanks. We'll pass it on.

We'll turn now to Mark Torrente with Wells Fargo Securities. Please go ahead.

Hi, good morning, and thank you for the question. Going back to pet, the category itself, particularly dog, has been softer. What do you think in terms of trends there, and what are your expectations for the category near term? And then your own pet volumes were a bit better sequentially, some put stakes in terms of private label losses versus integration lapse. But underlying is starting to stabilize a little more. How are you thinking about recovery there through the year in terms of volumes?

On the category, we don't see any major changes in the recent trends. The recent trends, as you said, have been softer compared to the CAT segment, and that is driven by some changes, whether it's urbanization and all those trends that are driving the CAT segment. So, we don't see material changes. In terms of our business, as you rightly said, it's sequentially getting better. A lot of that is, as we mentioned, nutrition and gravy train, improvements driven by price points that we tested, and our expectation is as we relaunch those runs, it should help the brands. That's our expectation. But as you said, it will give us confidence that the business is sequentially getting better, volume is sequentially getting better.

Okay, thank you. And then you called out the successful closure of two of your serial facilities in the quarter. How should we think about the cost savings benefits flow through from those actions? And then given some of the normalization of the consumption trends, are there still other actions that you're considering for the segments?

The thing we mentioned in prior quarters, the benefits from the plans that we shut down should mostly hit our P&L starting in Q3. So, Q3 and Q4 will see the benefits. And then, after that, we will have to be very careful selective in what we do. I mean, there are not obvious opportunities to streamline our portfolio. It could be a line here and there, but no plans. Okay.

Thank you very much.

Thank you. With no further questions in queue, this will conclude today's Post Holdings First Quarter 2026 Earnings Conference Call and Webcast. Please disconnect your line at this time and have a wonderful day.