Post Holdings, parent company of egg products company Michael Foods, reported a significant drop in sales volume for its egg products during the third quarter of fiscal year 2020.
The quarter ended on June 30.
Foodservice segment
Post Holdings’ Foodservice segment, which primarily involves egg and potato products, saw its net sales of $242.3 million represented a decrease of 41.3% when compared to the third quarter of 2019. Volumes for the third quarter saw a year-over-year decrease of 41.8%, with egg volumes declining 39.3% and potato volumes declining 53.1%.
Those losses, according to the company, were driven by lower away-from-home demand in reaction to the COVID-19 pandemic in various channels, including full service restaurants, quick service restaurants, education and travel and lodging.
However, Post Holdings noted that when compared to the prior year, the rate of volume declines improved throughout the third quarter.
The Foodservice segment’s loss was $40.3 million, a decrease of 168.9%, or $98.8 million, compared to the prior year period.
Refrigerated Retail segment
Post Holdings’ Refrigerated Retail segment, which involves side dishes and egg, cheese and sausage products, saw net sales of $250.3 million for the third quarter, which was an increase of 20.9%, or $43.2 million, compared to the prior year period.
Volumes increased 5.1%, benefiting from increased at-home consumption in reaction to the COVID-19 pandemic, with growth in cheese, sausage and side dishes partially offset by declines in egg products.
Net sales also benefited from improved average net pricing across all products. Egg product net sales decreased 13.8% driven by an 18.8% volume decline and for low-margin discontinued and exited business. Segment profit was $42.3 million, an increase of 167.7%, or $26.5 million, compared to the prior year period.
Michael Foods, according to the Egg Industry Top Companies survey, is the sixth largest egg company in the United States, with 13.3 million hens. Earlier this summer, Michael Foods acquired Henningsen Foods, a manufacturer of value-added egg, meat and poultry products with three production facilities in Nebraska. The integration of that business is expected to be completed by the end of 2020.
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