TreeHouse Foods Q3 Earnings Top Estimates

  • TreeHouse Foods Inc THS reported third-quarter FY22 sales growth of 18% year-on-year to $1.299 billion, beating the consensus of $1.29 billion.
  • The revenue increase was primarily driven by favorable pricing to partially recover commodity inflation.
  • On a continuing operations basis, net sales increased 16.4% to $875.0 million. The gross profit for the quarter contracted 190 basis points Y/Y to 14.8%.
  • The company reported an operating loss of $(9.5) million versus a $9 million profit last year. The operating expenses rose 18.7% Y/Y to $138.8 million.
  • Adjusted EPS of $0.18 beat the analyst consensus of $0.16.
  • Adjusted EBITDA from continuing operations totaled $76.6 million, and the margin was 8.8%.
  • The company held $74.7 million in cash and equivalents as of September 30, 2022.
  • "The successful divestiture of a significant portion of our Meal Preparation assets positions us well to execute on our strategy: to capitalize on strong consumer demand trends in order to accelerate growth across our higher-margin private label snacking and beverage categories while driving long-term shareholder value," said CEO Steve Oakland.
  • Outlook: TreeHouse sees Q4 sales growth of 22% - 24%. The company expects Q4 adjusted EBITDA margin from continuing operations of 10.5% - 12%.
  • The company said FY23 net sales growth is expected to be strong due to the wraparound impact of its pricing actions to recover inflation in 2022.
  • Price Action: THS shares are trading lower by 6.68% at $45.33 on the last check Monday.
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