Good morning. Thank you for joining us today for Post's third quarter fiscal 2024 earnings call. I'm joined this morning by Rob Vitale, our President and CEO; Jeff Zadoks, our COO; and Matt Mainer, our CFO and Treasurer. Rob, Jeff and Matt will make prepared remarks, and afterwards, we'll answer your questions. The press release that supports these remarks is posted on both the investors and the SEC filings section of our website and is also available on the SEC's website. As a reminder, this call is being recorded. An audio replay will be available on our website at postholdings.com. Before we continue, I would like to remind you that this call will contain forward-looking statements, which are subject to written 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. We'll discuss certain non-GAAP measures. For a reconciliation of these non-GAAP measures to the nearest GAAP measure, see our press release issued yesterday and posted on our website. With that, I will turn the call over to Rob.

Thank you, Daniel. In Q3, we delivered another solid performance that enabled us to increase our full-year guidance. While we are never fully satisfied, we are quite pleased with the business performance, including recent acquisitions. I'm certain you noticed we have been aggressive in purchasing our own shares. This solid performance is against a challenging and transitioning consumer environment. Inflation is cooling, but we still face pressures in our labor markets. Meanwhile, the rapid changes in pricing over the last couple of years have impacted consumer behavior across channels. We expect to work through this price phenomenon in both retail and foodservice channels over the next year. Key highlights of the quarter include strong consumption of both our branded and big cereal products, ongoing outperformance in our pet business compared to our underwriting case, and significant mix improvement in value-added eggs. We expect these highlights to be sustained in FY '25. However, our refrigerated retail segment underperformed as trade investments didn't yield sufficient incremental lift. We are addressing the appropriate level of trade spending. Looking ahead to '25, we expect a more stable consumer environment, which, along with lapping '24, will support more favorable volume trends. The capital and M&A markets support further strategic action. Our leverage is at historically low levels, and we will be reactive with capital allocation. Our business model and diversification enable us to adapt to changing conditions, and we remain clear-eyed as we consider the allocation of your capital. Now Jeff will provide more context on the quarter.

Thanks, Rob, and good morning, everyone. Starting with PCB, both our grocery and pet food products contributed to another strong quarter of profit performance. Within grocery, cereal volumes were challenged, although we performed better than the category as we slightly increased branded share in both dollars and pounds. Carryover pricing combined with excellent operating and supply chain performance continued to be the main profit drivers within grocery. Zero category volume finished the quarter down 4.1%. Despite not seeing an immediate recovery as we lap Snap this quarter, we continue to expect category volumes will normalize to the historical CAGR of down approximately 1% to 2%. For the pet food business, our category share remained fairly flat in total and across our brands. Recall that in the last half of the prior fiscal year, our pet food sales revenues and volumes benefited from a one-time replenishment of customer inventories as we improved customer fill rates from the low 70s to the low 90s. Strong manufacturing performance continued to drive our results. The closure of our Lancaster, Ohio plant and our pet integration continue to remain on track with a planned exit from the Smucker's TSA in the first half of fiscal year 2025. Moving to Foodservice, we had a good quarter with a very strong product mix. We also benefited from the final runout of avian influenza pricing related to the November 2023 outbreak, as well as elevated customer promotions in the quarter. Overall egg volumes were flat despite slowing restaurant foot traffic. However, our mix improved with 15% volume growth in our highest-margin precooked egg products. Lastly, we continue to encounter some delays in achieving our full RTD shake manufacturing right. The ramp-up has been slower than anticipated, but we made significant progress during the quarter. Recognizing that it is hard to track the impact of avian influenza quarter-to-quarter, we will share that our expectation for Foodservice adjusted EBITDA in the fourth quarter is approximately $100 million. Our refrigerated retail business had a significant pullback in profitability. While we were encouraged to see dinner and breakfast side volumes up 4% and 6%, respectively, this growth came with significantly higher than expected trade costs. We are recalibrating these investments and anticipate sequential segment profit improvement in the fourth quarter. From a commodity standpoint, sale prices were a significant headwind versus prior year, pressuring Q3 adjusted EBITDA for the segment. On the positive side, we continue to see strong manufacturing and cost management performance across the network. Turning to Weetabix, U.K. category volumes moderated to a decline of 1%, and we saw flat volumes within our branded and private label biscuits. Continued improvement with supply chain and service levels, combined with incremental pricing on some private label products drove sequential margin improvement from Q2. In addition, the business successfully completed Phase one of its ERP conversion and is on track for the second larger Phase two in the fall. With that, I'll turn the call over to Matt.

Thanks, Jeff, and good morning. Third quarter consolidated net sales were $1.9 billion, and adjusted EBITDA was $350 million. Net sales increased 5% driven by recent acquisitions. Excluding acquisitions, sales declined 5% due to lower overall volumes in our retail businesses and the impact of foodservice pricing from our pricing pass-through model. Supply chain performance and fill rates remained strong, while commodity inflation on balance was neutral. Finally, SG&A increased as we continued targeted marketing investments in our retail businesses. Excluding the benefit of pet food acquisitions from both the current and prior year quarters, post-consumer brands net sales decreased 3% and volumes decreased 6%. Average net pricing, excluding pet food, increased 3%. The decline in volumes was primarily in nonretail and branded cereal. Segment adjusted EBITDA increased 28% versus the prior year as we benefited from the strong contribution of pet food and improved grocery performance. Weetabix net sales increased 1% year-over-year, benefiting from the DSI acquisition and a nominal foreign currency tailwind of 80 basis points from a stronger British pound. On a currency and acquisition neutral basis, net sales decreased 5%, and volumes decreased 6%, driven by a decline in non-biscuit products. Segment adjusted EBITDA increased 24% versus the prior year led by easing commodity pressures and improved manufacturing leverage as we built inventory in the quarter ahead of our ERP go-live. Foodservice net sales decreased 5%, while volumes increased 2%. Revenue reflects the pass-through of lower grain costs and a net reduction in pricing due to the winding down of avian influenza price increases from last year. Volumes reflected increases in both Ag products and potato products. Adjusted EBITDA decreased 17% as we lapped the benefit of Ag market imbalances and elevated avian influenza price effects in the prior year. These headwinds were partially offset by a favorable mix shift to higher margin pre-cooked cakes. Refrigerated retail net sales decreased 7%, while volumes were flat. Average net prices declined as a result of increased trade spending primarily for dinner sides. Favorable side dish volumes were offset by distribution losses in Ag products. Segment adjusted EBITDA decreased 37%, reflecting lower net pricing and significantly higher sales costs compared to the prior year. Turning to cash flow, in the third quarter, we generated $272 million from operations driven by strong profit performance and sequential improvements to working capital. Capital expenditures in the quarter were approximately $110 million, driven by continued investments in pet food capacity and the expansion of our Norwalk, Iowa pre-cooked Ag facility. For the last 12 months, cash flow from operations was $966 million, and capital expenditures were $391 million, netting $575 million of free cash flow. Given the strong cash flow, we maintained our net leverage at 4.3x while repurchasing two million shares at an average price of approximately $104 per share. In July, we repurchased an additional 300,000 shares at an average price of approximately $105 per share. In addition, our Board approved a new $500 million share repurchase authorization that begins next week. Finally, given the strong performance in the quarter, we again raised our guidance to a new range of $13.70 to $13.90. With that, I will turn the call over to the operator for Q&A.

Thank you. And our first question will come from Andrew Lazar with Barclays. Please go ahead.

Morning everybody. On Foodservice, I'm curious, you spoke to the ongoing run rate in EBITDA in that segment, I think last quarter of around $95 million. But sort of acknowledge that it has been running above that but didn't change it at that point. I'm curious where you see the ongoing run rate for Foodservice EBITDA now? And partly, I ask that because as we think ahead to fiscal '25, trying to get a sense of whether that could be a year-over-year headwind, right, lapping what was a strong year in Foodservice next year? Or if you think the ongoing run rate is somewhat higher or more consistent with what we've seen this year?

Sure. Andrew, we think the run rate is around $105 million. And again, the difference between that and the $100 million is pressure we're going to see in Q4 related to avian influenza costs we're going to incur ahead of pricing kicking in.

Yes. Got it. And then in measured channel data for pet, which certainly does not tell the whole story, it looked like consumption decelerated pretty meaningfully on a sequential basis in the quarter. And I guess I'm trying to get a sense of whether something sort of changed in terms of maybe not seeing as much trade down to mainstream in pet as you had been seeing. And if the planned reinvestment has sort of started to take shape yet or if that's still to come?

Andrew, really two drivers there. One, there's actually seasonality in the pet food category. So, you do see a pullback between Q2 and Q3 year-over-year. The other piece for us, though, specifically was we had new distribution gains in Q2. So, there was a pipeline fill in particular for NineLives. So those are the two components of the sequential decline. Other than that, we're in line with where we'd expect to be.

Got it. And lastly, just last quarter, I think, Rob, you mentioned having seen a meaningful increase in sort of the M&A pipeline. You mentioned private equity-owned assets have sort of aged and such. And trying to get a sense, obviously, your leverage is now lower than it's been in a while and you've been taking advantage of that around share repurchase. But any change to sort of that M&A landscape one way or the other that you've seen since last quarter?

If anything, it's accelerated in terms of the amount of opportunities we've been considering. Obviously, we take our time in considering those, and the pipeline may take a long time to mature to a deal, but the market feels very active right now.

Thanks so much.

Our next question will come from David Palmer with Evercore ISI, please go ahead.

Thanks, and good morning. I want to continue the discussion about your outlook for fiscal '25. How are you feeling about pet synergies, productivity, and visibility? Are there any factors that provide you with the flexibility to stabilize volume, especially considering the 6% decline in post-consumer brand volume? I assume you might want to increase promotional spending to address this, so any insights you have on the dynamics for '25 would be appreciated. Thank you.

Yes. On the cereal side, we are on track with the Lancaster closing, which should contribute positively. This is helping to adjust some of our current overcapacity. Regarding post-consumer brands, our cereal volumes were consistent with the category despite a decline of 6%. We did have some SKU reductions in Canada, and we've noticed a general decrease in government bid business. These are the main exceptions to our overall category performance. However, I believe that Lancaster will help mitigate some of the potential volume challenges you mentioned.

Do you want to provide an estimate of what that could mean for EBITDA and the timing in fiscal '25?

We've talked about Lancaster as being a $25 million contribution for the full year, and we're on track to be there. So again, to your point, there's volume pressures that could be promotional, although we're pretty rational in terms of our promotional outlook.

Our next question will come from Ken Goldman with JPMorgan. Please go ahead.

Hi, two quick ones to start, if I may. One, I didn't quite hear you on the TSA timing. Is that shifting the exit into 2025 now? I think it was previously scheduled for the fourth quarter of this year. Please correct me if that's not right. And then I was hoping for an update on the timing of the Michael plant. I wasn't sure if we had heard that.

So the TSA with Smucker, there's no change in the timing. There's a part of the co-pack arrangement that lingers into the first part of fiscal '25. But we're on target to exit the back-office TSA at the end of our fiscal year. And then the question about foodservice, could you say that again?

I just didn't understand if there was any change in the guidance on the timing of the Michael plant opening?

No, we didn't comment on that in our prepared remarks, but the timing of Norwalk, if that's what you're talking about, the expansion of market protein shakes.

I'm not saying clearly, but yes. Thank you.

Yes. No, the plant is open. It's just our ramp-up has been slower than we expected. So, I guess the way to put it is, yes, the profitability from that or expected profitability has been delayed beyond what we had previously communicated.

Thank you. And then one more, if I can, just on SG&A. Broadly, over the last 12 months, your SG&A has grown much more rapidly than your sales. And I know you've talked about increasing marketing. But it brings now your SG&A as a percentage of sales over the last 12 months, back up to kind of the range it was for many years around that kind of mid-18% until it did the last couple of years. I'm just curious, is it fair to think about this percentage as a good number to model ahead, understanding it will never stay exactly there? Are there reasons to think that SG&A dollars will continue to rise at a meaningfully faster pace than revenue?

Yes. I think a couple of things. You mentioned A&C. We definitely have some targeted additional investments there that we may recalibrate. Also, given the overperformance in the portfolio, there's definitely some elevated stipends or bonuses within some of our segments as well that would reset next year.

Our next question will come from Matt Smith with Stifel. Please go ahead.

Hi, good morning. I wanted to go back to the Foodservice business. You have the expanded capacity coming online at Norwalk. Could you remind us when that capacity comes online and your visibility in the pipeline of filling that capacity and what it could mean for further distribution opportunities?

Yes. We still have another year of construction or so on Norwalk. So that would really be fiscal '26 when that would come online, and then there will be a ramp period that could be as long as 12 months in terms of filling that plant.

Thank you for that. Now, regarding the Refrigerated Retail business, you initiated some promotional activities to encourage consumers to return or try your brands again. Could you explain why the increase wasn't as strong as you expected and what your plans are moving forward to enhance your volume growth?

Sure. As we mentioned, we're recalibrating that. Honestly, we overestimated the lift in Q2 and Q3 in terms of the amount we spent on promotions. For example, this quarter had a 4% increase in sides. I think to support that level of spending, we would have expected something north of 10%. Instead, we subsidized some base sales that were on promotion, which deteriorated profitability.

And you mentioned a longer look-back period for those promotional events. Are you able to recalibrate that fairly quickly? Or does that take a couple of quarters to pull planned promotions out of the market?

Yes, we are. I think with the knowledge of that. As a reminder, cereal is a very mature category with a lot of promotional activities. We haven't been able to promote refrigerated retail for a much different category than cereal. We just don't have that history. So, we underestimated the level of promotional activity that happened. But we have recalibrated the accrual and our expectations in the quarter. So, we feel like we have a good handle on it.

Thank you, Matt. I'll pass it on.

Our next question comes from Michael Lavery with Piper Sandler. Please go ahead.

Thank you. Good morning. You mentioned that branded cereal is doing better than private label, but we're hearing a lot about how consumers are financially strained. How do you explain the cereal market dynamics? Additionally, I believe you mentioned that you anticipate some stability in consumer behavior for fiscal '25. Can you provide insights on what the cereal market indicates about the current state of the consumer?

Let me start with the initial comment. Private label outperformed branded in the quarter. The comment regarding consumer behavior going forward is more about the acceptance of the pricing environment that has changed rapidly, and consumers are now adjusting. So, I think that it feels like we are transitioning from a super-hot labor market to a cooling labor market, which should be generally constructive for volumes as we adjust past the reference price changes. We think the consumer environment will be more constructive next year on balance, but there are certainly challenges.

And would you characterize that as likely across categories? Or do you have some where you would call out as more likely to see extended pressure?

Certainly, in cereal, given its maturity, we continue to believe within the Bob Evans brand there are opportunities to do considerably better. Again, as Matt mentioned, we let our trade skills get rusty having been through a period where we didn't try to create demand. Value-added eggs continue to outperform the overall volume trends broadly across food, both away from home and in-home. So, these comments would be most applicable to cereal with varying degrees of application to the other categories.

That's helpful. And just on pet, can you give an update on the spending trajectory and how to think about just timing and where that's directed in terms of which brands and how that's playing out?

When you say spending trajectory, you mean incremental investment in things like advertising?

Exactly, yes.

It's mostly around our more premium brands that are larger. I don't want to get into details around particular cadence and spend, but you can look at the portfolio and see where we would choose to invest.

Our next question comes from John Baumgartner with Mizuho Securities. Please go ahead.

Good morning. Thanks for the questions. Maybe first off, coming back to refrigerated retail and the trade promo, just to clarify, if I remember correctly last quarter, I think there were some customer-funded promotions that seemed promising in terms of consumer response. You mentioned the dust is still settling in Q3, but were there any material changes in terms of the outlet type of program or even geography relative to customer-funded approaches in Q2?

No. The comment on customers was really around Q1, and that was during the holiday season. So, the different dynamic is that was during peak season, and we were seeing really good volumes during that time, then a little bit of seasonality in Q2, and there was no seasonality benefit in Q3. I would say that's really the difference, which is Q1 is a very strong quarter.

Okay, thanks for that. And then, Rob, why don't I come back to foodservice and the volume growth there. Are there certain segments within Away from Home where your distribution growth is skewing in particular? And for your existing business, the exposure to breakfast, are you seeing any shifts in that daypart where pre-cooked eggs are particularly resilient or more trading down to less expensive items? You mentioned eggs are outperforming, but I'm not sure if that's just due to a smaller base effect relative to other offerings that are out there. Maybe it's too granular, but just curious if you have any observations on sell-through more broadly at retail. Thank you.

Yes. The pre-cooked business, which is our highest value-added and highest-margin business, continues to perform very well, in fact, grew 50% volumetrically over the quarter. We are seeing changes in some of the foot traffic patterns across restaurants and QSRs, which I'm sure you've seen reported by some of the larger ones in the last couple of weeks. So, there is some offsets in terms of where that business could be going. But the value proposition of that product is such that it's an effective way to reduce labor in back-of-house operations, and we think it will continue a long-term trend irrespective of the short-term fluctuations in foot traffic issues.

Our next question comes from Rob Dickerson with Jefferies. Please go ahead.

Great. Thanks so much, Rob. Just around the commodity complex as you think through next year, are there any potential offsetting benefits in some of the grain-based categories in which you operate that could help support profitability despite some volume pressure that works to correct immediately on top of, let's say, from the rightsizing of capacity?

As we look at it right now, there's a fairly balanced mix of benefits from grains, with some offsetting inflationary items such as packaging and sugar as examples. I don't think we see it as a huge benefit or detriment. So, it's fairly balanced as we head into the next fiscal year.

All right, cool. And then just quickly on Weetabix. You called out in the release and comments just a margin uptick off of pricing. It sounds like part of that portfolio, the margin uptick was impressive, right, on a sequential and year-over-year basis. As we think through Q4 next year, is that step up somewhat sustained? Is that more of a new margin base for that business, or could there be some other flow-through impacts that would bring that back down?

A couple of things. As Matt said in his prepared remarks, there is a benefit this quarter because of inventory build. We have an ERP conversion hitting at the beginning of next fiscal year. In preparation for that, we're building inventory to manage through any bumps in the road that might occur. Because of that, we had an absorption benefit in the third quarter that you wouldn't expect on an ongoing basis. With that said, we expect that Q2 and Q1 of this year were more of the trough and that our expectation is we'll begin migrating towards a more historical margin profile for that business. But to be fair, Q3 was a step up that was more than we'd expect on the trajectory toward what we will eventually achieve. So, simply put, expect a little bit of a step down, but still a better trend line than where it was at the beginning of this fiscal year.

Okay. Very helpful. Thank you.

Our next question comes from Marc Torrente with Wells Fargo Securities. Please go ahead.

Hey, good morning. Thank you for the questions. First on pet, you talked through some of the drivers of the sequential slowdown in sales from Q2. Simple math implies some further expansion on margins even as you're stepping up advertising around the premium brands. So maybe just a little more color on the margin progress there.

I think a lot of our margin progress has been more around the flow-through of the manufacturing efficiencies that we've achieved; stabilization regarding that is one of the bigger drivers. We've taken some of those dollars and reinvested behind the brands and ramped advertising and promotions, but manufacturing performance and cost management are really the keys for the margin improvement.

Okay, thanks. And then CapEx stepped up this year with investments in pet as well as the Shake ramp. How much of these projects carry into next year? You spoke to the Ag facility timing; just any context there and how we should think about CapEx levels for '25, I guess thinking through free cash flow conversion ahead.

Yes. These are definitely multiyear projects, certainly Norwalk and Bloomfield. We expect '25 to be very similar to '24 in terms of the capital range we have and spend.

And Mr. Torrente, did this answer your questions?

Thank you. And we will take our final question from Carla Casella with JP Morgan. Please go ahead.

Great. Thank you. A couple of follow-ups. You talked about the environment, both in foodservice and retail, but is your expectation that we should see trade spending pick up as we go into the back half of this year, and is it consistent across categories? Are you seeing more need for trade spending in one versus another? And then I have one question on M&A.

I think we will likely see a little uptick in trade spend, but it will be targeted and not necessarily reactive. The best example is the way we spent in our Bob Evans brand; we need to ensure we get the lift that is intended with the trade spend. I'm sorry, what was your other question?

Is it more targeted in one category versus one category more exposed?

No, we'll execute where we see pricing opportunities across the portfolio. The primary focus is on potatoes and side dishes.

Okay. And then the other question was on the M&A environment. If you could just talk to the deal flow and whether the opportunities are getting more interesting or fairer than in the past, considering irrational seller expectations.

We've seen a period with lower-than-average PE exits, leading to more opportunities from PE owners of consumer assets. We always believe corporate owners should prune their portfolios, so there are opportunities in that area. The quantum of opportunities has increased significantly year-over-year and even sequentially. That doesn't mean anything will happen because we want to be very disciplined with respect to capital allocation. As long as we're trading below average multiples on a post-synergy basis, we'll stay the course and allocate capital into our shares. So, it’s a plentiful environment from an opportunity perspective, but it’s too early to say if anything will convert.

Okay, great. Thank you.

And we have now reached the conclusion of the question-and-answer session. This will conclude today's Post Holdings third quarter 2024 earnings conference call and webcast. Please disconnect your line at this time, and have a wonderful day.