TreeHouse Foods Q3 Earnings Meet, View Cut on Weak Consumption Trends

In This Article:

TreeHouse Foods, Inc. THS reported mixed third-quarter fiscal 2024 results. The bottom line improved year over year and matched the Zacks Consensus Estimate, while the top line declined and missed the same. Management lowered its 2024 adjusted net sales and adjusted EBITDA guidance, indicating softer consumer demand and a voluntary recall of frozen griddle products.

TreeHouse Foods identified potential contamination during routine product testing and initiated a voluntary recall of the frozen griddle products, demonstrating the company’s commitment to food safety and the well-being of its customers and consumers. Despite these challenges, THS achieved supply-chain savings, resulting in margin improvements and profits within the guided range.

TreeHouse Foods’ Quarterly Performance: Key Insights

TreeHouse Foods posted adjusted earnings of 74 cents per share, which was in line with the Zacks Consensus Estimate. The bottom line increased from 57 cents in the year-ago quarter.

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

TreeHouse Foods, Inc. Price, Consensus and EPS Surprise

 

TreeHouse Foods, Inc. Price, Consensus and EPS Surprise
TreeHouse Foods, Inc. Price, Consensus and EPS Surprise

TreeHouse Foods, Inc. price-consensus-eps-surprise-chart | TreeHouse Foods, Inc. Quote

Net sales of $839.1 million dropped 2.8% year over year due to a voluntary recall of frozen griddle products. Apart from this, the sales decline was due to unfavorable volume/mix performance, negatively impacted by nearly $5-$10 million due to Hurricane Helene, which disrupted distribution in the Southeastern region of the United States. This downside was also due to the targeted commodity-driven pricing adjustments in selected categories. Adjusted net sales of $854.4 million declined 1.4% year over year. The top line missed the Zacks Consensus Estimate of $879.9 million.

Organic sales decreased 2.7% year over year. The volume/mix contributed to a decline of 0.8% in the reported period. The pricing and product recall returns further led to declines of 0.5% and 1.4%, respectively. The facility restoration impact remained flat for the third quarter.

The gross margin of 15.6% contracted by 0.3 percentage points from the year-ago quarter mainly due to a voluntary recall of frozen griddle products, which impacted the gross profit by 3.2 percentage points. However, the adjusted gross margin improved 18.9%, indicating an increase of 1.6 percentage points from the year-ago quarter, due to the implementation of supply chain initiatives.

Total operating expenses were $99.4 million, down from $103.9 million in the year-ago quarter. This decrease was caused by lower freight costs, reduced expenses for growth, reinvestment restructuring programs and decreased employee incentive compensation, though partially offset by the lapping of TSA income.

Adjusted EBITDA from continuing operations totaled $102.5 million, up from $89.9 million in the third quarter of 2023. This increase was driven by supply-chain savings initiatives.

Waiting for permission
Allow microphone access to enable voice search

Try again.