TreeHouse Foods Posts Mixed Q4 Earnings; Warns On Inflationary Macro Environment

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  • TreeHouse Foods Inc THS reported fourth-quarter FY22 sales growth of 22% year-on-year to $996.20 million, missing the consensus of $1.02 billion.
  • The revenue increase was primarily driven by favorable pricing to recover commodity inflation.
  • Gross margin for the quarter expanded 280 basis points Y/Y to 17.7%.
  • The company reported an operating income of $70 million with an operating margin of 7%.
  • The operating expenses fell 28.4% Y/Y to $105.9 million.
  • Adjusted EPS of $0.98 beat the analyst consensus of $0.92.
  • Adjusted EBITDA from continuing operations totaled $120 million, and the margin was 12%.
  • The company held $43 million in cash and equivalents as of Dec. 31, 2022.
  • Outlook: TreeHouse sees FY23 sales growth of 6% - 8%. The company expects FY23 adjusted EBITDA of $345 million - $365 million and capital expenditure of $130 million.
  • TreeHouse anticipates Q1 net sales growth of 9% - 12% driven by pricing actions to recover inflation and a 300 - 450 basis point year-over-year improvement in adjusted EBITDA margin from continuing operations.
  • In addition, TreeHouse introduced the following annual growth targets expected over 3+ years beginning in 2024, with net sales growth of 3% - 5%.
  • Price Action: THS shares are trading lower by 7.23% at $44.83 on the last check Monday.
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