Why TreeHouse Foods Shares Are Surging Today

TreeHouse Foods Inc THS reiterated its Q2 outlook and provided an update on 2023 guidance ahead of its investor day.

For 2023, the company continues to see sales growth of 6%-8% to $3.66 billion- $3.73 billion versus the consensus of $3.7 billion.

Meanwhile, it raised the adjusted EBITDA outlook to $355 million-$370 million (+26% Y/Y at the midpoint) from $345 million-$365 million expected previously.

For Q2 2023, THS reaffirmed guidance for revenue at $810 million-$840 million (consensus: $830.46 million), an adjusted EBITDA margin of 7.9%-9.4% (representing 130 to 280 basis points YoY), and adjusted EBITDA of $65 million-$80 million. 

At the investor day, THS will offer insights into the annual growth targets for 2024-2027, which includes revenue growth of 3%-5%, adjusted EBITDA growth of 8%-10%, and FCF of over 200 million.

THS expects to achieve cost savings of over $250 million from 2024 to 2027, led by investments related to supply chain optimization.

"Having repositioned the company, TreeHouse today is a stronger, more focused business, and we are building depth and leadership in high-growth, high-margin categories, while delivering improved execution and consistency. The significant progress our team is making represents our strategy in action, and we could not be more excited by the tremendous opportunity ahead. We are pleased with our start to 2023 and are confident in our ability to achieve our annual growth targets and create value for our shareholders," stated said Steve Oakland, Chairman, CEO, and President.

Last month, the company reported first-quarter sales growth of 15.8% year-over-year to $894.8 million, beating the consensus estimate of $850.84 million and adjusted EPS of $0.68, exceeding the consensus estimate of $0.40.

Price Action: THS shares are trading higher by 5.47% at $54.00 premarket on the last check Tuesday.