Saputo Inc

SAP: XTSE (CAN)

Morningstar Rating for Stocks	Fair Value	Economic Moat	Capital Allocation
	CAD 67.60	Ymb	Vbcgrqfxn

Saputo Earnings: Poor Results on Commodity and Currency Headwinds Emphasize Fragility to Macro Woes

Erin Lash , Grace Na

Feb 9, 2024

The volatile commodity environment has been plaguing no-moat Saputo’s results in recent quarters, and the third quarter was no exception—net sales fell 7% to CAD 4.3 billion (including an unfavorable foreign exchange impact of CAD 280 million), and the EBITDA margin declined 100 basis points to 8.7%. In addition, Saputo recorded a CAD 265 million noncash impairment charge in its Australia division due to challenging market conditions. This corroborates our view that the dairy processor’s fate largely hinges on market factors beyond its control, supporting its lack of pricing power in the commoditized dairy aisle.

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