Consumer packaged goods company Post Holdings Inc. (NYSE:POST) will shut down two of its cereal production plants in an effort to cut costs and optimize operations, the company announced Wednesday. The company has some iconic brands like Raisin Bran, Weetabix and Honeycomb.
The impacted facilities, located in Cobourg, Ontario, and Sparks, Nevada, employ roughly 300 people combined and are expected to cease operations by the end of December 2025.
The decision stems from excess capacity in the company's cereal production network as consumer interest in ready-to-eat cereals continues to wane.
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Nicolas Catoggio, president and CEO, said, "The ready-to-eat cereal category continues to decline. To respond to this, we are reducing excess manufacturing capacity and optimizing our North American plant network to better utilize our production capacity."
Post acquired the Cobourg facility as part of its 2017 purchase of Weetabix, while the Sparks plant was added to its assets following the 2021 acquisition of Treehouse Foods' cereal business.
Production from both locations will be reallocated to other established sites within the Post Consumer Brands manufacturing network.
Post expects to incur pre-tax expenses between $63.5 million and $67.5 million, including both cash and non-cash costs, as a result of shutting down the facilities and moving production.
Post also plans to invest an additional $5 million to $7 million in capital expenditures on top of its earlier fiscal 2025 capex forecast of $380 million to $420 million to facilitate the transition process.
The company reported a 0.4% increase in first-quarter revenue to $1.974 billion and adjusted EPS of $1.73. Post also raised FY25 adjusted EBITDA guidance to $1.42 billion—$1.46 billion.
Post forecasts that the consolidation will lead to cost savings between $21 million and $23 million annually beginning in fiscal 2026, once the new setup becomes fully operational.
Price Action: POST shares traded higher by 3.55% at $115.88 at the last check on Wednesday.
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