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Shares of Treehouse Foods
THS are down nearly 13% after the company reported poor sales volumes.
The company announced that lower-than-anticipated December sales volumes will result in fourth quarter adjusted earnings to be between $0.84 to $0.87 per fully diluted share, representing a 7% increase compared to $0.80 per fully diluted shares for the 2010 fourth quarter.
The Company's fourth quarter retail channel volumes decreased 4%, mainly due to an 8% decline in December volumes, well below historical levels. As a result, the Company's 2011 full year adjusted earnings are now expected to be between $2.70 and $2.73 per fully diluted share compared to the Company's previously-issued guidance of $2.90 to $3.00 per fully diluted share.
The Company believes the volume decline was driven by three main factors: 1) Reduction in consumer food purchases, 2) Sales shift away from traditional grocery customers toward alternate channel retailers, 3) Negative effect of warm weather in the Midwest and Northeast on seasonal sales.
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