TreeHouse Foods Revenue Grows In Q3
Third quarter net sales at TreeHouse Foods were up more than 3% as pricing along with volume and mix related to acquisitions helped offset losses from a product recall and foreign currency rates.
For the quarter ended September 2023, net sales were $863.3 million, an increase of 3.6% from net sales of $832.9 million in the comparable quarter the previous year., an increase of $30.4 million, or 3.6%.
According to the company, the increase in sales was primarily driven by the acquisition of the coffee roasting capability, favorable pricing to recover commodity inflation, and an increase in retail volume. This was partially offset by declines in co-manufacturing and food-away-from-home volume, which is in line with broader macroeconomic consumption trends. Additionally, supply chain disruptions, including a voluntary product recall, impacted select categories.
Net income from continuing operations for the third quarter of 2023 was $9.8 million, compared to net loss from continuing operations of $12 million for the same period of the previous year. Adjusted EBITDA from continuing operations was $89.9 million in the third quarter of 2023, compared to $79.6 million in the third quarter of 2022, an increase of $10.3 million. The increase is primarily due to the company's pricing actions to recover commodity inflation. This was partially offset by lower fixed cost absorption and category mix.
"We delivered year-over-year net sales and volume growth in the quarter and outperformed the broader private brand market in the retail channel, particularly in categories where we have depth," said Steve Oakland, chairman, chief executive officer, and president of TreeHouse.
He noted the company is “pleased” with its 1% unit growth in its core retail business, despite facing several challenges including a product recall, a supply chain disruption late in the quarter, weaker food-away-from-home revenues, and lower than anticipated consumption in select categories.
For the remainder of the year, TreeHouse is forecasting net sales of between $3.435 billion and $3.465 billion. The revised range reflects the divestiture of the snack bars business, the impact of a voluntary product recall and a discrete supply chain disruption, and a continuation of current consumer demand trends.
"Looking ahead, we're excited at the opportunity to capitalize on the increasing consumer pivot to private brands,” Odland said. “We believe the actions our team has taken to strengthen our portfolio and enhance our capabilities, coupled with the reinvestment opportunities for the Seller Note proceeds, position us well to continue creating long-term value for our shareholders."
