TreeHouse Foods Q2 Earnings Highlights: Earnings Beat, 4% Sales Growth, Margin Expansion & More

Treehouse Foods, Inc. THS reported second-quarter sales growth of 4.1% year-over-year to $843.60 million, beating the consensus of $829.85 million. Adjusted EPS improved to 42 cents, beating the consensus estimate of 40 cents.

The growth was driven by favorable pricing to recover commodity inflation.

The gross margin for the quarter expanded 200 basis points compared to 2Q22 to 15.7%.

Total operating expenses were $103.3 million in the second quarter of 2023 compared to $136.7 million in the second quarter of 2022.

Also Read: Treehouse Foods Closes Buyout Of Farmer Brothers' Certain Assets

Adjusted EBITDA from continuing operations was $76.4 million Q2, up 43.9% Y/Y, primarily due to the company's pricing actions to recover commodity and freight inflation experienced in prior periods and lower freight costs.

The company held $16.9 million in cash and equivalents as of June 30, 2023.

Q3 Outlook: TreeHouse expects third-quarter revenue of $950 million-$970 million, representing approximately 10% year-over-year growth at the midpoint. The analyst consensus stands at a $930.12 million estimate.

FY23 Outlook: Net sales growth is now expected to be 7.5%-9.5% year-over-year, representing a range of $3.71 billion-$3.78 billion versus a $3.7 billion estimate (Prior View: $3.66 billion-$3.73 billion)

The company narrowed its adjusted EBITDA range to $360 million-$370 million, up approximately 27% year-over-year at the midpoint.

Price Action: THS shares closed higher by 0.13% to $52.03 on Friday.