TreeHouse Foods (THS, Financial) anticipates its second-quarter adjusted EBITDA to fall within $61 million to $71 million. For the same period, the company projects adjusted net sales between $785 million and $800 million, suggesting essentially stable growth compared to the previous year, at the mid-point of this range.
The company expects its organic volume and mix to decline by mid-single digits. This decrease is largely attributed to ongoing margin management strategies and the impact of a griddle product recall. However, pricing adjustments are forecasted to contribute an approximate 1% positive effect. Additionally, the anticipated EBITDA figures account for a $6 million shift in spending from the first to the second quarter.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 7 analysts, the average target price for Treehouse Foods Inc (THS, Financial) is $26.29 with a high estimate of $37.00 and a low estimate of $24.00. The average target implies an upside of 12.09% from the current price of $23.45. More detailed estimate data can be found on the Treehouse Foods Inc (THS) Forecast page.
Based on the consensus recommendation from 8 brokerage firms, Treehouse Foods Inc's (THS, Financial) average brokerage recommendation is currently 2.8, indicating "Hold" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Treehouse Foods Inc (THS, Financial) in one year is $43.77, suggesting a upside of 86.65% from the current price of $23.45. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Treehouse Foods Inc (THS) Summary page.
THS Key Business Developments
Release Date: February 14, 2025
- Fourth Quarter Adjusted Net Sales: $911.4 million.
- Fourth Quarter Adjusted EBITDA: $118.3 million.
- Fourth Quarter Adjusted EBITDA Margin: 13%.
- Fiscal Year 2024 Adjusted Net Sales: $3.38 billion.
- Fiscal Year 2024 Adjusted EBITDA: $337 million.
- Volume and Mix Growth (Q4): 3.8% increase.
- Procurement Savings (2024): $60 million in gross savings.
- Shareholder Returns (2024): $150 million through share repurchase program.
- 2025 Adjusted Net Sales Guidance: $3.34 billion to $3.4 billion.
- 2025 Adjusted EBITDA Guidance: $345 million to $375 million.
- 2025 Free Cash Flow Guidance: At least $130 million.
- 2025 Capital Expenditures Guidance: Approximately $125 million.
- First Quarter 2025 Adjusted Net Sales Guidance: $785 million to $800 million.
- First Quarter 2025 Adjusted EBITDA Guidance: $38 million to $46 million.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Treehouse Foods Inc (THS, Financial) completed the acquisition of Harris Tea, enhancing its competitive positioning in the private label tea category.
- Fourth-quarter adjusted net sales of $911.4 million and adjusted EBITDA of $118.3 million were in line with expectations, demonstrating effective cost management.
- The company achieved significant cost savings through procurement initiatives, contributing to improved adjusted gross margin performance.
- Treehouse Foods Inc (THS) is focusing on optimizing costs across its supply chain to drive improved profitability and has visibility to delivering $250 million of gross supply chain savings through 2027.
- The company is strategically positioned to benefit from the long-term growth trends in private brand groceries and consumer snacking preferences.
Negative Points
- Treehouse Foods Inc (THS) experienced a voluntary recall of frozen griddle products, impacting supply chain operations and financial contributions in the first quarter.
- Private brand unit sales saw a sharp deceleration during the fourth quarter due to macroeconomic pressures affecting the broader food and beverage market.
- The company anticipates a challenging macro food environment and slowing category growth in 2025, with expected flat adjusted net sales.
- Volume and mix are expected to decline approximately 1% year-over-year in 2025, influenced by the frozen griddle product recall and other margin management actions.
- Treehouse Foods Inc (THS) is facing low to mid-single-digit inflation in commodities such as coffee and cocoa, which could impact profitability.
