If you aren't yet familiar with the term "K-shaped economy," it will become inescapable in 2026, according to a new report from Bank of America. A K-shaped economy is a situation in which, following a downturn, the economy recovers in an unequal manner. Specifically, higher-income employees and industries thrive due to rising asset prices, while lower-income employees and industries are burdened with inflation, debt, and weak growth. The K-shaped economy is the latest financial buzzword for a reason: Mu ...

Core Insights - Post Holdings, Inc. (POST) reported fiscal first-quarter 2026 results with both revenue and earnings exceeding expectations, showing year-over-year growth [1] Financial Performance - Adjusted earnings per share were $2.13, surpassing the Zacks Consensus Estimate of $1.66, and increased from $1.73 in the same quarter last year [2] - Net sales reached $2,174.6 million, a 10.1% increase year over year, including $224.6 million from acquisitions, slightly above the Zacks Consensus Estimate of $2,165 million [3] - Gross profit was $638.5 million, up 7.3% year over year, with a slight contraction in gross margin to 29.4% from 30.1% [4] - Operating profit increased by 11.3% to $238.4 million, and adjusted EBITDA rose 13.1% to $418.2 million from $369.9 million in the previous year [5] Segment Performance - **Post Consumer Brands**: Net sales were $1,103.8 million, up 14.5% year over year, but volumes declined 6.1% when excluding contributions from acquisitions [6] - **Foodservice**: Net sales grew 8.5% to $669.1 million, with a segment profit surge of 36.5% to $117.5 million [7] - **Refrigerated Retail**: Reported net sales of $266.6 million, unchanged from the prior year, with a segment profit increase of 25.6% to $30.4 million [8] - **Weetabix**: Net sales increased by 8.1% to $137.9 million, with a segment profit rise of 36.5% to $21.7 million [9] Future Outlook - Post Holdings raised its fiscal 2026 adjusted EBITDA guidance to $1.55-$1.58 billion, up from the previous range of $1.50-$1.54 billion [10][12] - Capital expenditures are expected to remain in the range of $350 million to $390 million, focusing on facility expansions [12] Shareholder Actions - The company ended the quarter with cash and cash equivalents of $279.3 million and long-term debt of $7,457.9 million [11] - In the first quarter, Post Holdings repurchased 3.7 million shares for $378.9 million, with an additional 1.8 million shares repurchased for $175.4 million after the quarter [11]

Financial Data and Key Metrics Changes - Fiscal 2026 started strong with Q1 adjusted EBITDA significantly above expectations, leading to an increase in guidance [4] - The company maintained net leverage flat despite aggressive share repurchases and the sale of the 8th Avenue pasta business [4] Business Line Data and Key Metrics Changes - The foodservice normalized run rate was updated positively, contributing to the strong operating performance [4] - The egg segment saw volume growth, particularly in higher value-added eggs, with expectations of a 3%-4% growth rate moving forward [24][46] Market Data and Key Metrics Changes - The cereal category has recently returned to a low single-digit growth rate after significant declines, attributed to changes in SNAP and a shift towards more affordable breakfast options [11][12] - The pet food segment, particularly dog food, has been softer compared to cat food, with expectations of gradual recovery as brands are relaunched [78] Company Strategy and Development Direction - The company continues to focus on opportunistic capital allocation, particularly in M&A, as market valuations change [10] - There is no significant change in strategy despite competitor investments in the cereal category; the company is adjusting promotional spending to enhance efficiency [29] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the normalized run rate for foodservice and the ability to grow off that base due to favorable supply and demand dynamics [46] - The company is monitoring the impact of dietary guidelines on its portfolio but believes it is well-positioned with its current offerings [74] Other Important Information - The company has successfully closed two cereal facilities, with cost savings expected to impact the P&L starting in Q3 [80] - Management is cautious about future actions to streamline the portfolio, indicating no obvious opportunities at this time [80] Q&A Session Summary Question: Market valuations and M&A activity - Management noted that changing multiples make M&A more interesting, but it is still a subjective assessment [10] Question: Cereal category trends - Management indicated that recent improvements in the cereal category are linked to SNAP changes and a shift in consumer behavior towards more affordable options [12] Question: Foodservice business expectations - Management stated that the balance of the portfolio remains in line with initial expectations, with no material changes anticipated [22] Question: RTD shakes ramp-up - Management acknowledged ongoing challenges with production efficiency but remains optimistic about the long-term potential of the RTD shakes business [39] Question: Pet food category trends - Management confirmed that the dog food segment remains softer, but improvements are expected as brands are relaunched [78] Question: Cost savings from facility closures - Management expects cost savings from closed facilities to start impacting the P&L in Q3, with no immediate plans for further streamlining [80]

Core Insights - Post Holdings, Inc. (POST) is scheduled to release its first-quarter fiscal 2026 earnings on February 5, with investors keen to see if the company can exceed market expectations [1] Revenue and Earnings Estimates - The Zacks Consensus Estimate for revenues is set at $2.2 billion, reflecting a 9.6% increase from the previous year [2] - The consensus estimate for earnings has decreased by 11 cents over the past month to $1.66 per share, indicating a 4.1% decline compared to the same period last year [2] - POST has achieved an average earnings surprise of 16.5% over the trailing four quarters [2] Performance Drivers - The quarterly performance is expected to benefit from strong momentum in core segments, particularly Foodservice and Refrigerated Retail, supported by favorable volume trends and improved supply conditions [3] - Foodservice trends are positive, with increased egg and potato volumes noted at the end of the previous quarter [4] - In Refrigerated Retail, volume growth in dinner sides is anticipated to provide a modest boost to the upcoming quarter's results [4] - The company is entering the year with a balanced egg supply, allowing for a more normalized operating environment and a focus on volume growth [4][5] Seasonal and Product Factors - First-quarter results are expected to gain from seasonal tailwinds in Refrigerated Retail, along with support from new private label products launched towards the end of fiscal 2025 [6] - Demand remains strong for higher value-added egg products, with supply recovering from previous disruptions [5] Profitability Outlook - However, normalization of HPAI (Highly Pathogenic Avian Influenza) is likely to exert pressure on first-quarter EBITDA, alongside typical seasonal declines in cereal performance in the U.S. and U.K. [7] - Near-term profitability may be moderated as the business transitions to a more normalized operating environment [7] Earnings Prediction Model - The current model does not predict a definitive earnings beat for POST, with an Earnings ESP of -2.82% and a Zacks Rank of 4 (Sell) [8][9]

General Mills - General Mills reported earnings of $1.10 per share on an adjusted basis, exceeding expectations, with revenue reaching $4.8 billion, slightly above the anticipated $4.7 billion [2] - Despite a year-over-year revenue decline, the gross margin for General Mills was over 34% [2] - The pet food category showed significant strength with an 11% growth, while international sales increased by 6%, although North American sales experienced weakness [3] - For 2026, General Mills projects EPS in the range of $3.58 to $3.79, with organic net sales expected to range from -1% to +1% [4] Tesla - Tesla has recently reached new highs, with predictions of Elon Musk potentially becoming the first trillionaire [5] - The company has faced challenges throughout the year, particularly due to political dynamics surrounding Musk's relationship with former President Trump [6][7] - Despite these challenges, Tesla's recent milestones, including a significant pay package tied to performance and advancements in its robo taxi service, have been viewed as positive developments [8][9] Fortinet - JP Morgan has downgraded Fortinet from neutral to underweight, reducing its price target from $85 to $75, citing growing headwinds into 2026 [10] - Concerns have been raised regarding Fortinet's reliance on hardware market share gains, which may limit its growth potential compared to larger cybersecurity platforms [11] - Fortinet's stock has underperformed year-to-date, down 14%, and is currently down 1.5% [12]

Core Insights - Post Holdings, Inc. reported fourth-quarter fiscal 2025 results with net sales in line with estimates and adjusted earnings exceeding expectations, both metrics showing year-over-year growth [1][2] Financial Performance - Adjusted earnings per share were $2.09, surpassing the Zacks Consensus Estimate of $1.92, and increased from $1.53 in the same quarter last year [2] - Net sales reached $2,247 million, an 11.8% increase year over year, including $249.4 million from acquisitions; excluding acquisitions, growth was offset by declines in Post Consumer Brands [3] - Gross profit was $602.1 million, a 4.6% year-over-year increase, while gross margin contracted to 26.8% from 28.6% [3] - SG&A expenses rose 2.5% to $350.1 million, representing 15.6% of net sales compared to 17% in the prior year; included $14.4 million in integration costs related to acquisitions [4] - Operating profit decreased 11.8% to $168.4 million, while adjusted EBITDA increased 22% to $425.4 million from $348.7 million in the previous year [4] Segment Performance - **Post Consumer Brands**: Net sales of $1,158.8 million, up 10.6% year over year, but missed estimates; volumes declined 11.5% excluding contributions from 8th Avenue [5] - **Weetabix**: Net sales of $145 million, up 3.6% year over year, exceeding estimates; volumes decreased 2.9% [6] - **Foodservice**: Net sales grew 20.4% to $718 million, beating estimates; segment profit surged 63.7% to $128.2 million [7] - **Refrigerated Retail**: Net sales of $228.2 million, up 0.8% year over year, but below estimates; segment profit rose 82.8% to $23.4 million [8] Future Outlook - For fiscal year 2026, Post Holdings expects adjusted EBITDA in the range of $1,500-$1,540 million, including contributions from 8th Avenue's pasta business; capital expenditures projected between $350 million and $390 million [9][12] - The company plans continued investment in cage-free egg facility expansion and completion of a precooked egg facility expansion in Norwalk, Iowa, totaling $80-$90 million [12] Share Repurchase Activity - In Q4, Post Holdings repurchased 2.5 million shares for $273.8 million; total repurchases for fiscal 2025 amounted to 6.4 million shares for $708.5 million [11]

Financial Data and Key Metrics Changes - Consolidated net sales for Q4 were $2.2 billion, with a 12% increase driven by the acquisition of Eighth Avenue; excluding this acquisition, net sales declined due to lower pet food and cereal volumes [12][13] - Adjusted EBITDA for Q4 was $425 million, with a 50% increase in foodservice adjusted EBITDA driven by avian influenza pricing and volume growth [12][13] - Free cash flow for the quarter was approximately $150 million, with full-year free cash flow nearing $500 million [15][16] Business Line Data and Key Metrics Changes - Post's consumer brands net sales, excluding Eighth Avenue, decreased by 13%, with cereal volumes down 8% and pet volumes down 13% [12][13] - Foodservice net sales increased by 20%, with an 11% volume increase; adjusted EBITDA increased by 50% [12][13] - Refrigerated retail net sales were flat, with volumes down 4% excluding PPI impact; adjusted EBITDA increased by 44% [12][14] Market Data and Key Metrics Changes - The cold chain business showed strong performance, particularly in egg and potato volumes, with higher margin egg products growing nearly 9% in Q4 [9][10] - The U.K. cereal category showed improvement, with Weetabix's net sales increasing by 4% [15] Company Strategy and Development Direction - The company aims to focus on cost reduction and profitable brand investments in retail while expecting volume growth in foodservice [6][8] - There is an ongoing review of M&A opportunities, with a balanced approach between acquisitions and share buybacks based on risk-return perspectives [20][21] - The company plans to make targeted investments in innovation across various categories, including protein and granola products in cereal [37] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating regulatory changes and consumer sentiment challenges, highlighting the resilience of their diversified portfolio [5][6] - For FY 2026, the company expects adjusted EBITDA to be in the range of $1.50 billion to $1.54 billion, reflecting a growth rate of approximately 1%-4% [16] Other Important Information - The company repurchased 2.6 million shares in Q4, totaling 6.4 million shares for FY 2025 [15][16] - Capital expenditure guidance for FY 2026 is set at $350 million to $390 million, significantly lower than FY 2025 [16] Q&A Session Summary Question: Industry volume challenges and capital allocation decisions - Management acknowledged the structural versus cyclical nature of current industry challenges and emphasized a more thoughtful approach to capital allocation, balancing M&A and share buybacks [19][20] Question: Cost optimization in cereal segment - Management indicated that while there are additional cost reduction opportunities, larger actions like plant closures have already been taken, focusing now on line optimization [22][23] Question: Normalized growth outlook for segments - Management expects the PCB legacy business to remain flat, while other segments are projected to align with growth algorithms [26][27] Question: Performance in refrigerated retail - Management noted that while pricing benefits inflated margins, they expect high teens margins to be reasonable, with a return to around 16% during slower periods [32] Question: Innovation investments in 2026 - Management plans to invest in brand innovation across categories, including new product lines in cereal and pet food [37] Question: Demand for value-added products in foodservice - Management expressed confidence in sustained demand for value-added products due to historical trends and operational efficiencies [39][40] Question: Key moving parts in pet segment - Management highlighted the impact of lost private label business and expected a return to flat or slight growth in the second half of FY 2026 [45] Question: Pricing rationality in cereal category - Management noted competitive pressure and promotional activities affecting pricing dynamics in the cereal category [47]

Core Viewpoint - Wall Street anticipates a year-over-year increase in earnings for Post Holdings, with a focus on how actual results compare to estimates, which could significantly impact stock price [1][2]. Earnings Expectations - Post Holdings is expected to report quarterly earnings of $1.92 per share, reflecting a year-over-year increase of +25.5% [3]. - Revenue is projected to be $2.25 billion, an increase of 11.8% from the same quarter last year [3]. Estimate Revisions - The consensus EPS estimate has been revised down by 5.1% over the last 30 days, indicating a bearish sentiment among analysts regarding the company's earnings prospects [4][12]. - The Most Accurate Estimate for Post Holdings is lower than the Zacks Consensus Estimate, resulting in an Earnings ESP of -3.00% [12]. Earnings Surprise Prediction - The Zacks Earnings ESP model suggests that a positive or negative reading indicates the likely deviation of actual earnings from the consensus estimate, with a strong predictive power for positive readings [9][10]. - A combination of a positive Earnings ESP and a strong Zacks Rank increases the likelihood of an earnings beat, but Post Holdings currently holds a Zacks Rank of 3, complicating predictions [10][12]. Historical Performance - In the last reported quarter, Post Holdings exceeded the expected earnings of $1.67 per share, achieving actual earnings of $2.03, resulting in a surprise of +21.56% [13]. - Over the past four quarters, the company has consistently beaten consensus EPS estimates [14]. Conclusion - Despite the potential for an earnings beat, various factors could influence stock movement, and Post Holdings does not currently appear to be a compelling candidate for an earnings surprise [15][17].

Strategy and Growth - General Mills aims to accelerate growth by driving remarkability in its offerings [7] - The company's strategy focuses on core markets, global platforms, and local gems, with a goal of organic net sales growth of +2% to 3% and adjusted operating profit growth in the mid-single digits [9] - Portfolio reshaping through acquisitions and divestitures has added approximately 1 percentage point to long-term growth exposure [23] - Nearly 30% of the net sales base has been turned over since fiscal year 2018 [25] Financial Performance and Outlook - General Mills reaffirms its fiscal year 2026 financial outlook, including organic net sales growth of -1% to +1%, adjusted operating profit growth of -15% to -10%, and adjusted diluted EPS growth of -15% to -10% [317] - The company anticipates approximately 5% headwinds from the net impact of divestitures and acquisitions and 3% from normalization of corporate incentive expense in fiscal year 2026 [317] - Holistic Margin Management (HMM) cost savings are projected to be 5% of COGS in fiscal year 2026, continuing a long-term trend [22] - General Mills returned nearly $14 billion to shareholders between fiscal years 2019 and 2025, including $9 billion in dividends and $5 billion in net share repurchases [340, 341, 343] Segment Performance - North America Retail segment is focused on building remarkable brands in food [46] - North America Foodservice segment reported $2.3 billion in net sales in fiscal year 2025 [158] - North America Pet segment is identified as the largest growth opportunity for the company, operating in a $56 billion U S category and a $142 billion global category [190, 189] - International segment reported $2.8 billion in net sales in fiscal year 2025, with global platforms expected to drive 75% of its growth over the next three years [268, 280]

Core Viewpoint - Post Holdings, Inc. (NYSE: POST) has underperformed in the market over the past year, showing flat trading and missing out on significant market rallies due to weaker-than-expected sales in its cereal division [1] Company Performance - The company's cereal division has reported sales that were weaker than anticipated, contributing to its overall disappointing performance [1] Market Context - Despite the challenges faced by Post Holdings, the broader market has experienced meaningful rallies that the company has not capitalized on [1]