TreeHouse's third-quarter net sales down from last year
Oak Brook, Ill.-based TreeHouse Foods, a manufacturer and distributor of private label packaged foods and beverages in North America, reported third-quarter net sales of $1.057 billion compared to $1.118 billion for the same period last year, a decrease of 5.4%.
TreeHouse also reported quarterly earnings of $0.55 per share compared to earnings of $0.57 per share a year ago.
“Third-quarter adjusted earnings per diluted share from continuing operations fell within the range of our guidance, and I'm encouraged by the progress we are making around volumes,” said Steve Oakland, CEO and president.
Oakland said the third-quarter results also reflect two challenges: an unanticipated reduction in September orders and some temporary operational disruption as the company aligned its manufacturing cost profile through workforce reductions.
“While these changes across our operations will contribute meaningfully to our future efficiency as we pivot the organization to volume growth, our near-term results were challenged,” Oakland said.
Net sales in the baked goods segment decreased $25.3 million, or 6.7%, in the third quarter compared to the third quarter of 2018 due to unfavorable volume/mix, mostly from lost distribution predominately in the in-store bakery bars and griddle categories, according to TreeHouse.
Net sales in the beverages segment decreased $1.9 million, or 0.8%, in the third quarter compared to the third quarter of 2018 due to unfavorable pricing attributable to competitive pressure in the single-serve beverages category, the company said.
Net sales in the meal solutions segment decreased $33.4 million, or 6.6%, in the third quarter compared to the third quarter of 2018 due to unfavorable volume/mix from lost distribution primarily in the pasta and pickles categories, foreign currency, and the efforts to simplify and rationalize low margin SKUs, TreeHouse said.
“Strengthening commercial relationships takes time, but our focus on delivering great customer service is paying off as our customer interface evolves from tactical execution toward more strategic, long-term discussions,” Oakland said. “We remain committed to our vision to be the supply chain for our customers' brands and to deliver upon our financial commitments of 1 to 2% revenue growth, greater than or equal to 10% earnings per share growth and at least $300 million in free cash flow in 2020 and beyond.”
In another matter, TreeHouse announced that William J. Kelley Jr., currently senior vice president of corporate and operations finance, was appointed interim chief financial officer, effective immediately. He replaces Matthew Foulston, who after a three-month transition period will be pursuing other career opportunities. TreeHouse has engaged an executive search firm to review candidates for a permanent chief financial officer.