US – American consumer packaged goods demand Post Holdings and Arkansas-based multinational meat processing company Tyson Foods have reported double digit growth in net sales for quarter three buoyed by elevated demand in the food service channel.
Q3 net sales for Post Holdings were US$1.6bn, an increase of 19% (or US$253.4 million including US$78.5m in net sales from acquisitions made in the past two years) compared to US$1.3bn in the prior-year period.
During the quarter, Post saw its foodservice business rebound, growing by 80% year on year, primarily driven by out-of-home demand for its egg and potato products.
Also experiencing strong double-digit growth for the quarter was the company’s ready-to-drink protein shakes business which includes the Premier Protein brand, which experienced a 68% lift in net sales to US$342.6m compared to the prior year.
Post’s two major retail segments – Post Consumer Holdings and Refrigerated Retail business – however, declined by double digits vs. one year ago as consumer shift to premium products and labor shortages affected trade volumes.
“Post Consumer Brands had a soft volume quarter, largely attributable to what we believe is a temporary consumer shift toward premium purchasing,” said Post Holdings president and CEO Robert V. Vitale.
Vitale added: “While demand remained strong, most notably on Bob Evans dinner sides and sausage, manufacturing constraints, resulting primarily from labor availability, have reduced internal capacity and as a result, the manufacturing network was not able to service the full customer demand in Q3 and will further pressure Q4 in the holiday season.”
Expecting continual challenges to the business for the rest of the 2021 fiscal year, Vitale noted that 2022 will be a transitional period for the company as it deals with the lingering effects of inflation.
Tyson’s impressive Q3 performance
Meanwhile, the world’s second-largest meat processor Tyson Foods has recorded a 42% increase in earnings in Q3 mainly driven by a strong performance in the retail market.
The company’s Net income in the third quarter ended July 3 totaled US$749 million, equal to $2.05 per share on the common stock, up from US$526 million, or $1.44 per share, in the same period a year ago.
Total sales for the period were US$12.48 billion, up 25% from US$10.02 billion recorded in the same period a year ago.
On a segment basis, Tyson’s Beef business reported higher sales volume due to strong global demand and reduced production inefficiencies associated with COVID-19.
Higher demand in the foodservice channel and reduced production inefficiencies, on the other hand, lifted sales volume in the company’s Chicken business during the third quarter.
Its Pork business however, saw operating income decline in the third quarter and first nine months of fiscal 2021 mainly due to lower hog supplies relative to industry capacity.
Despite the headwinds experienced in its pork business side, Tyson is upbeat about its performance in the remainder of the year and has thus raised its guidance for full-year revenues to between US$46 billion to US$47 billion.
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