Post Holdings Foodservice Volumes Rise 4.5%: Sign of More Upside Ahead

Core Insights - Post Holdings, Inc.'s Foodservice division has shown significant resilience, with Q3 2025 net sales increasing by 18.6% to $698.5 million, driven by a 4.5% volume increase excluding the PPI acquisition [1][8] - The segment's adjusted EBITDA rose 32% to $159 million, indicating strong operational momentum and its importance to overall company performance [1][4] Sales and Performance - The Foodservice segment's sales growth was supported by temporary avian influenza pricing, solid distribution growth in eggs and potatoes, and consistent contributions from protein shakes [1][2] - Management anticipates that avian influenza pricing will decline by the end of Q4, with egg supply expected to fully recover as the company enters fiscal 2026 [2] Future Outlook - Post Holdings expects the Foodservice segment to achieve a normalized adjusted EBITDA run rate of approximately $115 million per quarter after the pricing effects subside, indicating a robust cash-generating platform with potential for expansion [3][4] Market Position - The successful integration of strategic acquisitions, such as PPI, has strengthened the Foodservice segment's market position and diversified its product offerings [4] - The segment's growth is further supported by increased breakfast traffic and improved egg availability, contributing to sustained momentum in key product areas [2][4] Valuation - Post Holdings currently trades at a forward 12-month P/E ratio of 13.31, which is lower than the industry average of 15.92 and the sector average of 17.04, positioning the stock at a modest discount relative to peers [9]