TreeHouse Foods Q1 Results Down, But Exceed Forecast

First quarter net sales at TreeHouse Foods was down nearly 4% but results exceeded the company’s guidance.

Net sales for the three months ended March 31 were $820.7 million, down from net sales of $854 million in the comparable quarter the previous year. Sales were above the company’s guidance of between $780 million and $810 million.

The company said the 3.9% decrease was primarily driven by unfavorable volume/mix due to planned distribution exits primarily in its coffee and in-store bakery categories, as well as the restart of one of TreeHouse’s broth facilities, which contributed to approximately half of the volume decline. 

Additionally, pricing was modestly unfavorable as a result of targeted commodity-driven pricing adjustments. These items were partially offset by volume/mix from the acquisition of the Coffee Roasting Capability.

Net loss from continuing operations for the first quarter of 2024 was $11.7 million, compared to net income from continuing operations of $20.4 million for the same period of the previous year. The decrease is primarily due to the restart of one of the company’s broth facilities, unfavorable fixed cost absorption due to lower volume, increased costs for labor investment, and unfavorable category mix. This was partially offset by lower freight costs.

"We're encouraged by our solid start to fiscal 2024, delivering net sales results above our expectations. We are building momentum with our commercial pipeline, the largest in recent history, with good progress closing opportunities,” said Steve Oakland, chairman, chief executive officer, and president of TreeHouse Foods. “I believe this puts TreeHouse in a strong position to deliver our annual net sales commitment.”

Oakland said the downtime at the company’s broth facility impacted first quarter profitability, and restart of that facility coupled with its supply chain savings initiatives position TreeHouse to expand margin through the rest of the year. 

“I am pleased with the focus throughout the company and continue to see a long runway for growth as we invest in opportunities to strengthen capabilities and depth in our higher growth, higher margin snacking and beverage categories,” he added. 

Looking ahead at its full fiscal year, company officials are forecasting net sales in the range of $3.43 to $3.50 billion, which represents growth of approximately 0% to 2% year-over-year. Organic volume and mix are expected to be slightly positive for the year, offset by modest, targeted deflationary pricing. The company expects a slight volume and mix benefit from the acquisitions completed in the last year.