TreeHouse Foods Manages Sales Beat In Q2 Amid Challenges, Reaffirms 2024 Topline Outlook

TreeHouse Foods Inc THS reported a second-quarter 2024 sales decline of 1.9% year-over-year to $788.5 million, beating the consensus of $783.649 million.

The sales decrease was due to commodity pricing adjustments and planned distribution exits in coffee and in-store bakery categories, partially offset by new business wins and the Coffee Roasting Capability acquisition.

Gross margin for the quarter contracted 30 basis points year over year to 16.3%. Adjusted EBITDA from continuing operations was $70.6 million, compared to $76.3 million a year ago, and the margin was 9%, down 50 bps.

The company reported an operating loss of $4 million, compared to an operating income of $30.3 million last year. Operating expenses climbed 28.6% year over year to $132.3 million.

Adjusted EPS was $0.29, beating the analyst consensus of $0.13.

“Our teams made significant progress converting net sales opportunities and executing on our supply chain initiatives this quarter. The combination of these efforts, along with our work to restore one of our Broth facilities, contributed to the improvement of our overall business performance and the building of momentum at TreeHouse,” commented Steve Oakland, Chairman, Chief Executive Officer, and President.

TreeHouse repurchased ~1.3 million shares of common stock for $44.8 million in the second quarter. The company held $105.8 million in cash and equivalents as of June-end.

Q3 Outlook: TreeHouse anticipates net sales of $865 million – $895 million versus the consensus of $887.08 million. Adjusted EBITDA from continuing operations is expected to be $98 million – $108 million.

2024 Outlook: TreeHouse continues to expect sales of $3.43 billion – $3.50 billion against an estimate of $3.455 billion. The company now expects FY24 adjusted EBITDA of $360 million – $380 million and capital expenditure of $145 million.

THS continues to expect a free cash flow of at least $130 million in 2024.

Price Action: THS shares traded higher by 2.05% at $40.11 at the last check Monday.