TreeHouse Foods, Inc. Reports Third Quarter 2024 Results

Core Insights - TreeHouse Foods reported mixed financial results for Q3 2024, with net sales of $839.1 million, a decrease of 2.8% year-over-year, primarily due to a voluntary product recall and unfavorable volume/mix performance [1][2] - The company updated its 2024 outlook, expecting adjusted net sales between $3.37 billion and $3.40 billion, reflecting a decline of approximately 2% to 1% year-over-year [3][4] - Adjusted EBITDA for Q3 2024 was $102.5 million, an increase from $89.9 million in Q3 2023, attributed to supply chain savings initiatives [2][4] Financial Performance - Net sales for Q3 2024 were $839.1 million, down from $863.3 million in Q3 2023, with a decrease of $24.2 million or 2.8% [2] - Gross profit margin decreased to 15.6% in Q3 2024 from 15.9% in Q3 2023, impacted by the product recall [2] - Adjusted gross profit margin improved to 18.9% in Q3 2024 from 17.3% in Q3 2023, driven by supply chain initiatives [2] Operating Expenses and Other Financial Metrics - Total operating expenses decreased to $99.4 million in Q3 2024 from $103.9 million in Q3 2023, due to lower freight costs and reduced employee incentive compensation [2] - Total other expenses increased to $36.1 million in Q3 2024 from $20.1 million in Q3 2023, primarily due to unfavorable changes in non-cash mark-to-market impacts from hedging activities [2] - The effective tax rate for Q3 2024 was 20.9%, down from 27.4% in Q3 2023, influenced by changes in executive compensation and tax credits [2] Cash Flow and Capital Expenditures - Net cash used in operating activities from continuing operations was $30.4 million in the first nine months of 2024, compared to net cash provided of $11.0 million in the same period of 2023 [2] - The company expects capital expenditures of approximately $145 million and free cash flow of at least $120 million for 2024 [5][6] Outlook - The company anticipates fourth quarter adjusted net sales in the range of $900 million to $930 million, representing approximately -1% to 2% growth year-over-year [5] - Adjusted EBITDA for Q4 2024 is expected to be between $116 million and $126 million, reflecting ongoing challenges in consumption trends [6]