On August 5, 2024, Treehouse Foods Inc (THS, Financial) released its 8-K filing reporting financial results for the second quarter of 2024. TreeHouse Foods is the largest pure-play private-label manufacturer in the US, producing and selling snacks, beverages, and select grocery products primarily through retail grocery stores.
Performance Overview
Treehouse Foods Inc (THS, Financial) reported net sales of $788.5 million for Q2 2024, slightly below the $803.5 million reported in the same period last year, representing a 1.9% decrease. Despite this, the net sales figure was above the mid-point of the company's guidance range of $770 to $800 million. The net loss from continuing operations was $(16.7) million, a significant drop from the net income of $22.4 million in Q2 2023. Adjusted EBITDA came in at $70.6 million, exceeding the company's guidance range of $55 to $65 million.
Key Financial Achievements
Treehouse Foods Inc (THS, Financial) reaffirmed its 2024 outlook for net sales of $3.43 to $3.50 billion and free cash flow of at least $130 million. The company also narrowed its adjusted EBITDA outlook to a range of $360 to $380 million. During the quarter, Treehouse Foods repurchased approximately $45 million of company shares, reflecting confidence in its long-term growth prospects.
Income Statement Highlights
| Metric | Q2 2024 | Q2 2023 |
|---|---|---|
| Net Sales | $788.5 million | $803.5 million |
| Gross Profit | $128.3 million | $133.2 million |
| Operating Expenses | $132.3 million | $102.9 million |
| Net (Loss) Income from Continuing Operations | $(16.7) million | $22.4 million |
| Adjusted EBITDA | $70.6 million | $76.3 million |
Challenges and Strategic Initiatives
The decrease in net sales was primarily due to targeted commodity-driven pricing adjustments and unfavorable volume/mix related to planned distribution exits in the coffee and in-store bakery categories. Additionally, the restoration of one of the broth facilities impacted sales. However, these were partially offset by volume/mix from the acquisition of the Coffee Roasting Capability and new business wins.
Gross profit as a percentage of net sales decreased slightly to 16.3% from 16.6% in Q2 2023, primarily due to costs incurred from the broth facility restoration. Adjusted gross profit, however, increased to 17.2% from 16.6%, driven by supply chain initiatives, particularly in procurement.
Balance Sheet and Cash Flow
Treehouse Foods Inc (THS, Financial) reported total assets of $3.91 billion as of June 30, 2024, down from $4.11 billion at the end of 2023. The company had $105.8 million in cash and cash equivalents, a significant decrease from $320.3 million at the end of 2023. Net cash used in operating activities from continuing operations was $71.8 million for the first six months of 2024, compared to $46.6 million in the same period last year.
Outlook
Treehouse Foods Inc (THS, Financial) reaffirmed its full-year 2024 guidance, expecting net sales in the range of $3.43 to $3.50 billion and free cash flow of at least $130 million. The company also narrowed its adjusted EBITDA outlook to $360 to $380 million, reflecting its first-half performance and assumptions for the second half of the year.
For the third quarter, Treehouse Foods expects net sales in the range of $865 to $895 million and adjusted EBITDA from continuing operations between $98 and $108 million.
"I'm pleased with our second quarter performance, which included sequentially improved net sales trends and profit that exceeded the upper-end of our guidance," said Steve Oakland, Chairman, Chief Executive Officer, and President. "Our teams made significant progress converting net sales opportunities and executing on our supply chain initiatives this quarter."
For more detailed financial information, please refer to the full 8-K filing.
Explore the complete 8-K earnings release (here) from Treehouse Foods Inc for further details.
