How Is Inghams Managing Volume Declines While Boosting Prices in FY25?
Inghams Group Limited confirms its FY25 outlook with a slight decline in core poultry volumes offset by modest price increases and new business gains.
- Core poultry volumes down 2.2% in first nine months of FY25
- Net selling price per kilogram up 1.2% overall
- Australian volumes impacted by inventory management and Woolworths contract changes
- New Zealand volumes grow 5%, boosted by Bostock Brothers acquisition
- FY25 underlying EBITDA guidance maintained between $236 million and $250 million
Trading Update and Volume Trends
Inghams Group Limited has provided a trading update for the first nine months of its 2025 financial year, reaffirming its guidance despite ongoing challenges in core poultry volumes. The company reported a 2.2% decline in group core poultry volumes compared to the prior corresponding period, driven primarily by softness in Australian volumes. However, this was partially offset by a 5% increase in New Zealand volumes, supported by the contribution from its Bostock Brothers Limited acquisition.
Australian core poultry volumes fell 3.4%, a decline attributed to a deliberate reduction in bird processing to manage elevated inventory levels and the phased implementation of a new Woolworths supply agreement. Retail volumes in Australia showed modest growth, but declines in wholesale, export, and quick service restaurant (QSR) channels weighed on overall performance. Notably, the rate of decline in the QSR segment moderated in the third quarter.
Pricing and Cost Dynamics
Despite volume pressures, Inghams achieved a 1.2% increase in net selling price (NSP) per kilogram across the group, with Australian NSP rising 1.5%. This reflects the company’s disciplined pricing strategy and a shift in channel mix favoring higher-margin retail business. Wholesale pricing remains under pressure, down 8.6% year-on-year, due to increased supply in that channel.
Feed ingredient costs, a significant input for poultry producers, have eased during FY25 with wheat prices down approximately 9% and soymeal prices down around 13% compared to FY24. These cost reductions have stabilized in the third quarter, potentially providing some margin relief going forward.
Outlook and Strategic Positioning
Inghams has reaffirmed its FY25 guidance, expecting core poultry volume growth between -1% and -3%, and underlying EBITDA (pre-AASB 16) in the range of $236 million to $250 million. CEO Andrew Reeves highlighted the company’s focus on operational excellence and strategic priorities, noting that the new Woolworths supply agreement’s volume reduction is substantially covered by new business secured during the year.
Reeves emphasized the strength of the New Zealand business, driven by favorable market conditions and the reopening of export markets, alongside benefits from strategic brand investments. The company remains confident in its ability to return to growth, supported by a more diversified customer base and ongoing improvements in operational performance.
Investors will be watching closely for the full FY25 financial results, due on 22 August 2025, to assess how these volume and pricing dynamics translate into profitability and growth prospects.
Bottom Line?
Inghams navigates volume headwinds with pricing discipline and new contracts, setting the stage for a pivotal FY25 finish.
Questions in the middle?
- How will the phased Woolworths supply agreement impact volumes and margins in 2H25?
- Can feed cost reductions sustainably improve Inghams’ profitability?
- What growth opportunities exist beyond current retail and QSR channels?
