Core Viewpoint - TreeHouse Foods (THS) is expected to report a year-over-year decline in earnings due to lower revenues, with a consensus estimate indicating a quarterly loss of $0.21 per share, representing a -600% change from the previous year [1][3]. Earnings Expectations - The upcoming earnings report is anticipated to be released on May 6, and the stock may rise if actual results exceed expectations, while a miss could lead to a decline [2]. - Revenues for the quarter are projected to be $789.6 million, down 3.8% from the same quarter last year [3]. Estimate Revisions - The consensus EPS estimate has been revised 11.01% lower in the last 30 days, reflecting a reassessment by analysts [4]. - The Most Accurate Estimate for TreeHouse is higher than the Zacks Consensus Estimate, resulting in a positive Earnings ESP of +63.42%, indicating a bullish outlook from analysts [10][11]. Earnings Surprise Prediction - The Zacks Earnings ESP model suggests that a positive reading is a strong predictor of an earnings beat, especially when combined with a Zacks Rank of 1, 2, or 3 [8]. - TreeHouse currently holds a Zacks Rank of 3, suggesting a likelihood of beating the consensus EPS estimate [11]. Historical Performance - In the last reported quarter, TreeHouse was expected to post earnings of $0.97 per share but delivered $0.95, resulting in a surprise of -2.06% [12]. - Over the past four quarters, the company has only beaten consensus EPS estimates once [13]. Industry Comparison - BellRing Brands (BRBR), another player in the food industry, is expected to report earnings per share of $0.52 for the same quarter, reflecting a year-over-year increase of +15.6% [17]. - BellRing's revenues are projected to be $575.94 million, up 16.5% from the previous year, with a positive Earnings ESP of 2.95% and a Zacks Rank of 2, indicating a strong likelihood of beating the consensus EPS estimate [18].

Core Viewpoint - TreeHouse Foods, Inc. is implementing internal restructuring actions to enhance operational efficiency while reaffirming its financial outlook for fiscal 2025, projecting adjusted net sales between $3.34 billion and $3.40 billion, and adjusted EBITDA from continuing operations ranging from $345 million to $375 million [1][2]. Financial Projections - The company expects adjusted net sales for the first quarter of fiscal 2025 to reach at least $792 million, with adjusted EBITDA projected at a minimum of $52 million [2]. - The financial guidance for fiscal 2025 includes a partial-year benefit from recent cost-saving measures, with full impact expected to be realized gradually through fiscal years 2025 and 2026 [2]. Organizational Changes - TreeHouse Foods is reorganizing its internal operations, eliminating about 150 corporate roles and removing a key leadership position to streamline operations [5][6]. - The exit of Executive Vice President Scott Tassani by the end of May will not be followed by refilling his position, aiming to reduce overhead costs and accelerate decision-making processes [5][6]. Market Conditions - The company is monitoring global trade conditions and tariff uncertainties, which could impact its business, noting that approximately 5% of its net sales in 2024 came from international markets, primarily Canada [3][6]. - Almost all finished goods currently comply with USMCA, indicating a focus on regulatory compliance in trade [3]. Performance Context - TreeHouse Foods' shares have decreased by 35.2% over the past three months, contrasting with the industry's growth of 3% [8].

Core Viewpoint - TreeHouse Foods, Inc. is implementing operational efficiency measures to enhance profitability and cash flow, while reaffirming its financial guidance for 2025 [1][3]. Financial Performance - The company expects preliminary first quarter 2025 Adjusted net sales of at least $792 million and Adjusted EBITDA of at least $52 million [1][3]. - TreeHouse Foods reaffirmed its 2025 financial guidance, projecting adjusted annual net sales between $3.34 billion and $3.40 billion, and adjusted EBITDA from continuing operations between $345 million and $375 million [3]. Organizational Changes - The company is streamlining its organizational structure, which includes the departure of Scott Tassani, Executive Vice President, and the elimination of approximately 150 roles [2][3]. - The reorganization aims to support faster decision-making and increased efficiencies within the company [3]. Strategic Focus - The company is focusing on improving execution and consistency to better serve customers and drive profitability [2]. - TreeHouse Foods is centralizing and reorganizing its corporate support functions as part of its operational enhancement actions [2][3]. Market Position - In 2024, approximately 5% of TreeHouse Foods' net sales came from customers outside the United States, primarily in Canada [4]. - The company is ensuring compliance with USMCA for nearly all finished goods [4].

Core Insights - TreeHouse Foods, Inc. reported mixed fourth-quarter fiscal 2024 results, with adjusted earnings of 95 cents per share, which missed the Zacks Consensus Estimate of 97 cents, but improved from 77 cents per share in the prior year [3][11] - Net sales of $905.7 million declined by 0.6% year over year but exceeded the consensus estimate of $905 million, with strong performance in categories like pretzels and cookies [3][4] - The company is focused on profitability through strategic margin management, efficiency improvements, and reduced capital expenditures [2] Financial Performance - Adjusted net sales increased slightly by 0.2% year over year to $911.4 million, despite challenges from a product recall and pricing adjustments [4][6] - Gross margin improved by 2.8 percentage points to 19.5%, driven by supply-chain savings initiatives and reduced commodity costs [6] - Total operating expenses decreased to $96.4 million from $109.7 million in the previous year, mainly due to lower employee compensation and reduced severance costs [7] Future Outlook - For fiscal year 2025, TreeHouse Foods expects adjusted net sales to range between $3.34 billion and $3.40 billion, reflecting a year-over-year change of a 1% decline to 1% growth [11][12] - Adjusted EBITDA from continuing operations is forecasted to be between $345 million and $375 million, with capital expenditures expected around $125 million [13] - In Q1, adjusted net sales are anticipated to be between $785 million and $800 million, representing a year-over-year decline of approximately 3.5% [14]

Acquisitions and Divestitures - TreeHouse Foods completed the acquisition of Harris Tea, a leading private brand tea manufacturer, on January 2, 2025, aligning with its strategy to enhance capabilities in higher-growth categories [19]. - TreeHouse acquired pickle branded assets from The J.M. Smucker Co. on January 2, 2024, expanding its presence in the Pickles category into Canada [21]. - The company completed the acquisition of the Direct Ship coffee business from Farmer Brothers Company on June 30, 2023, enhancing its coffee product offerings [23]. - The Snack Bars business was sold on September 29, 2023, as part of a strategic review process, which also included the divestiture of a significant portion of the Meal Preparation business in 2022 [22][25]. - The company completed the acquisition of pickle branded assets for $25.9 million on January 2, 2024, expanding its presence in the Pickles category in Canada [140]. - The company completed the sale of its Snack Bars business for approximately $58.7 million in cash on September 29, 2023, resulting in a gain on disposal of $1.1 million [189]. - The company recognized an impairment of $19.3 million related to the RTD beverages asset group due to forecasted cash flow losses [186]. Financial Performance - Net sales for the year ended December 31, 2024, totaled $3,354.0 million, a decrease of $77.6 million or 2.3% compared to $3,431.6 million in 2023 [150]. - Gross profit as a percentage of net sales was 16.4% for 2024, down from 16.8% in 2023, primarily due to a voluntary recall impacting gross profit by 1.1 percentage points [152]. - Total operating expenses increased to $445.3 million in 2024 from $429.2 million in 2023, an increase of $16.1 million [153]. - Total other expense rose to $70.0 million in 2024, up from $63.5 million in 2023, primarily due to a decrease in interest income and unfavorable currency exchange impacts [154]. - Net income from continuing operations was $26.9 million in 2024, a decrease of $32.1 million or 54.4% compared to $59.0 million in 2023 [150]. - Adjusted EBITDA from continuing operations was $337.4 million in 2024, down from $365.9 million in 2023, a decrease of $28.5 million or 7.8% [149]. - The Company reported net sales of $3,354.0 million for the year ended December 31, 2024, with an adjusted net sales figure of $3,377.3 million [214]. - The gross profit as reported was $548.4 million, representing 16.4% of net sales, while the adjusted gross profit was $593.4 million, or 17.6% of adjusted net sales [214]. - The diluted earnings per share from continuing operations was $0.51, while the adjusted diluted earnings per share was $1.91 [214]. Customer Concentration - TreeHouse's ten largest customers accounted for approximately 57.1% of consolidated net sales in 2024, with Walmart Inc. representing 23.9% of those sales [30]. - For the year ended December 31, 2024, the company's ten largest customers accounted for approximately 57.1% of consolidated net sales, with Walmart Inc. and its affiliates representing about 23.9% [57]. Supply Chain and Operational Efficiency - The company is focused on building a world-class supply chain and investing in innovation pipelines to drive growth and category leadership [29]. - Recent macroeconomic challenges have softened private brands consumption, but the company aims to enhance supply chain efficiency to maximize profitable growth [32]. - The company has made considerable progress toward its long-term supply chain cost savings initiative goals, resulting in margin improvement [143]. - Industry-wide supply chain disruptions have improved, allowing the company to enhance service levels and capture demand for private brand food and beverage [143]. - The company continues to monitor elevated ingredient and packaging input costs, implementing pricing actions to recover inflationary costs as necessary [144]. Employee Relations and Development - As of December 31, 2024, the company employed approximately 7,400 full-time employees, with 6,000 in the United States and 1,400 in Canada [44]. - The company emphasizes a strong focus on employee learning and development, offering over 10,000 courses through its internal platform, DevelopU [48]. - The company has not experienced material interruptions in operations due to employee disputes and considers employee relations satisfactory [44]. - The company is committed to competitive pay and benefits, including a 401(k) retirement plan with matching contributions for U.S. employees [49]. - The company faces risks from labor shortages and increased labor costs, which have negatively impacted profitability [56]. Risks and Challenges - The company is dependent on third-party suppliers for manufacturing and packaging, which poses risks to operating results if not managed effectively [53]. - The company is subject to various risks, including supply chain disruptions and product liability claims, which could materially affect its financial condition [51]. - The company may face increased contributions to multiemployer pension plans due to a shrinking contribution base, which could adversely affect financial results [68]. - The company’s ability to service its debt may be limited by its financial condition and operating performance, which are subject to various external factors [81]. - The company faces significant competition in the food industry, which may require price reductions or increased marketing expenditures, adversely affecting margins and profitability [70]. - Input costs, including ingredients and packaging materials, have seen significant inflation, which could adversely affect earnings and operating margins [73]. - The company is exposed to fluctuations in foreign currency exchange rates, particularly with its Canadian subsidiaries, which may negatively impact earnings due to transaction gains and losses [87]. - The company’s operations are subject to risks associated with acquisitions and divestitures, which could impact financial results and business reputation [98]. - The company’s supply chain may be adversely affected by climate change, leading to increased costs for raw materials and potential disruptions in production [90]. Shareholder Activities - The company has experienced shareholder activism, which could result in significant costs and impact stock price [94]. - The company has authorized a $400 million stock repurchase program, replacing the previous authorization of $400 million from 2017, with $393.5 million remaining available for repurchases [119]. - The company repurchased 4.1 million shares of common stock for a total of $149.7 million during the year ended December 31, 2024 [119]. - The company repurchased approximately 1.7 million shares of common stock for a total of $61.0 million during the quarter ended December 31, 2024, at a weighted average price of $36.39 per share [120]. - The Company had 1,530 shareholders of record as of January 31, 2025, and does not anticipate paying cash dividends in the foreseeable future [117]. Environmental and Regulatory Commitments - The company has established a culture of Environmental, Health, and Safety (EHS) excellence, integrating safety into its management operating system [46]. - The company may face increased compliance costs and capital expenditures due to new regulations related to greenhouse gas emissions and water conservation [91]. - The company has made public commitments to reduce carbon emissions, which may require significant resources and could increase operational costs [93]. Debt and Financial Obligations - The company had $1,409.1 million of outstanding indebtedness as of December 31, 2024, including a $588.6 million term loan maturing on March 26, 2026, and $500.0 million of 4.0% notes due September 1, 2028 [81]. - The Company had $316.4 million outstanding under Term Loan A and $588.6 million under Term Loan A-1 as of December 31, 2024 [171]. - Estimated future interest payments on the Company's debt are expected to be $180.3 million, with $73.8 million due in 2025 [181]. - Long-term debt outstanding increased to $1,409.1 million as of December 31, 2024, from $1,405.6 million in 2023, driven by a $3.5 million rise in finance lease obligations [170]. - Capital expenditures for 2025 are estimated at approximately $125 million, following $139.7 million in 2024 [181].

Financial Data and Key Metrics Changes - For Q4 2024, adjusted net sales were $911.4 million and adjusted EBITDA was $118.3 million, both in line with expectations, reflecting almost 4% growth in the period [11][12] - For the full fiscal year 2024, adjusted net sales were $3.38 billion and adjusted EBITDA was $337 million, also meeting updated expectations [12][33] - Adjusted EBITDA margin rose to 13% in Q4 2024, driven by procurement savings [24] Business Line Data and Key Metrics Changes - Adjusted net sales increased by 0.2% year-over-year, primarily driven by a 3.8% increase in volume and mix, particularly in pretzels, in-store bakery, cookies, and broth [26] - The frozen griddle facility restoration negatively impacted sales by 2% [26] - Pricing adjustments due to commodity costs had a headwind of about 70 basis points [26] Market Data and Key Metrics Changes - Private brand unit sales experienced a sharp deceleration in Q4 2024, attributed to macroeconomic pressures affecting the broader food and beverage market [13] - Despite weaker consumption, private brands maintained market share, with promotional activity expected to increase due to industry volume softness [15][16] Company Strategy and Development Direction - The acquisition of Harris Tea strengthens the company's position in the private label tea category and enhances blending and sourcing capabilities [10] - The company plans to focus on supply chain performance and cost structure management to improve profitability and competitiveness [18][20] - A commitment to achieving $250 million in gross supply chain savings through 2027 is emphasized [19] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the challenging macro food environment and anticipates a flat top-line outlook for 2025, with adjusted net sales guidance of $3.34 billion to $3.4 billion [31][32] - The company expects a decline in organic volume mix of approximately 1% due to various factors, including the impact of the frozen griddle product recall [32] - Management remains optimistic about long-term growth opportunities in private brands and snacking categories [16][18] Other Important Information - The company achieved $60 million in gross savings from supply chain cost-saving initiatives in 2024 [28][77] - Capital expenditures are expected to moderate moving forward as the company completes carryover projects from the previous year [30][79] Q&A Session Summary Question: What would you attribute the sequential slowdown in underlying volume to? - Management noted that the ramp-up of the broth facility and category deceleration contributed to the slowdown [43][44] Question: How does the company view the current industry challenges? - Management believes the current challenges are temporary and sees an opportunity to reset and rethink business operations [49][50] Question: Can you elaborate on margin management actions and their impact on volume? - Management indicated that margin management may lead to a slight volume drag but will improve cost efficiency [60][62] Question: What is the expected cadence of supply chain cost-saving programs in 2025? - Management expects a slightly lower contribution from procurement savings in 2025 but anticipates ongoing improvements in manufacturing and logistics [77][78] Question: How does the company plan to handle promotional activity in a low-volume environment? - Management expects promotional activity to increase as brands seek to drive volume, but believes the value proposition for private label remains strong [108][109] Question: What is the outlook for commodity inflation in 2025? - Management anticipates low to mid-single-digit inflation for commodities, particularly in coffee and cocoa [132][133]

Q4 2024 Results and 2025 Outlook February 14, 2025 © 2025 TreeHouse Foods, Inc. 1 Forward Looking Statement From time to time, we and our representatives may provide information, whether orally or in writing, which are deemed to be "forward-looking" within the meaning of the Private Securities Litigation Reform Act of 1995 (the "Litigation Reform Act"). These forward-looking statements and other information are based on our beliefs as well as assumptions made by us using information currently available. The ...

Group 1 - TreeHouse Foods reported quarterly earnings of $0.95 per share, missing the Zacks Consensus Estimate of $0.97 per share, but showing an increase from $0.77 per share a year ago, resulting in an earnings surprise of -2.06% [1] - The company posted revenues of $905.7 million for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 0.09%, although this represents a decline from year-ago revenues of $910.8 million [2] - Over the last four quarters, TreeHouse has surpassed consensus revenue estimates three times, but has only exceeded consensus EPS estimates once [2] Group 2 - TreeHouse shares have underperformed the market, losing about 5.3% since the beginning of the year, while the S&P 500 has gained 4% [3] - The company's earnings outlook is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters and any recent changes to these expectations [4] - The current consensus EPS estimate for the coming quarter is $0.16 on revenues of $829.15 million, and for the current fiscal year, it is $2.45 on revenues of $3.4 billion [7] Group 3 - The Zacks Industry Rank indicates that the Food - Miscellaneous sector is currently in the bottom 29% of over 250 Zacks industries, which may negatively impact stock performance [8] - The estimate revisions trend for TreeHouse is currently favorable, leading to a Zacks Rank 2 (Buy) for the stock, suggesting it is expected to outperform the market in the near future [6]

Mr. Oakland continued, "As a result the board and management are executing a plan to drive more profitable business through the organization, including making strategic decisions on margin management on new and existing business with a goal of prioritizing gross profit dollars. We are also focused on additional efficiency opportunities across the organization that, along with declining levels of capex as we complete growth-related investments, can drive improved profitability and cash flow. We believe these ...

Fourth Quarter Net Sales and Adjusted EBITDA Met Guidance TreeHouse delivered fiscal year 2024 results: Net sales were $3,354.0 million Net income from continuing operations of $26.9 million Adjusted EBITDA1 was $337.4 million Fourth quarter results included: Net sales of $905.7 million Net income from continuing operations of $58.7 million Adjusted EBITDA1 of $118.3 million Issued initial fiscal year 2025 outlook for adjusted net sales in a range of $3.340 billion to $3.400 billion, adjusted EBITDA2 in ...