Contradictions Unveiled: Analyzing Post Holdings' Foodservice and Pet Strategy in Q3 2025

Strong Q3 Results Despite Market Challenges:
- Post Holdings reported adjusted EBITDA approaching $400 million for Q3 2025, with significant improvement in cold chain businesses.
- The performance was driven by diversification in business segments and successful integration of the pet business under Nico's leadership.

M&A and Share Repurchase Strategies:
- The company closed the acquisition of 8th Avenue, with plans to integrate in FY '26, and repurchased approximately 8% of the company's shares year-to-date.
- These actions were motivated by the attractive balance sheet, liquidity position, and the potential for larger transformative transactions in the M&A environment.

Foodservice and Refrigerated Retail Growth:
- Foodservice reported a 19% increase in net sales and a 32% increase in adjusted EBITDA, driven by temporary Avian Influenza pricing and volume growth.
- Refrigerated Retail experienced a 9% increase in net sales and a 94% increase in adjusted EBITDA, benefiting from Easter timing and Avian Influenza pricing.

Cereal and Pet Segment Challenges:
- Post Consumer Brands' net sales decreased 9%, with cereal volumes down 6% and pet volumes accelerating to a 13% decline.
- The challenges were due to pricing elasticity in Gravy Train, declining Nutrish volumes post-launch, and private label business losses.

Tax Law Changes and Cost Optimization:
- The company expects substantial financial benefits from bonus depreciation and interest deductibility changes, resulting in an estimated $300 million reduction in cash taxes over 5 years.
- Cost optimization efforts are ongoing in the grocery segment to offset pressured cereal volumes and improve operational efficiency.