Treehouse Foods (THS) Tops Q1 EPS by 5c, Revenues Beat; Reaffirms FY20 Revenues Guidance Above Consensus

Treehouse Foods (NYSE: THS) reported Q1 EPS of $0.37, $0.05 better than the analyst estimate of $0.32. Revenue for the quarter came in at $1.08 billion versus the consensus estimate of $1.05 billion.

"We want to thank all of our employees for working tirelessly - in our manufacturing plants, as we have ramped up production; in our warehouses, as we have been working diligently to fulfill orders; and throughout our customer-facing organization, as we have partnered with our customers to service the heightened order flow. I'm very proud of the way the entire TreeHouse organization has come together in the midst of the COVID-19 crisis to deliver solid operational, commercial and financial results," said Steve Oakland, Chief Executive Officer and President. "First quarter adjusted EPS of $0.37 and revenue of $1.08 billion came in above our expectations, as our hard work over the last three years to transform the business and our reorganization from three to two divisions have enabled us to quickly and successfully escalate production to meet the significantly higher demand for food and beverages during this pandemic."

"I'm very pleased with our performance in the first quarter. Our retail business responded well to the unprecedented demand in March related to pantry stocking and higher at-home consumption, and more than offset the declines in our food-away-from-home business," said Bill Kelley, EVP and Chief Financial Officer. "Organic net sales1 rose 2.6% versus last year, and exceeded our original expectations for a year-over-year decline, driven by the anticipated carryover of prior year lost distribution and pricing adjustments. Our first quarter adjusted EBITDA1 of $98.7 million was in line with our guidance range for the first quarter, despite incurring additional costs to add production shifts and ensure labor availability throughout our network of manufacturing and distribution facilities across the country."

GUIDANCE:

Treehouse Foods sees Q2 2020 EPS of $0.40-$0.50, versus the consensus of $0.47. Treehouse Foods sees Q2 2020 revenue of $1.05-1.09 billion, versus the consensus of $1.02 billion.

Treehouse Foods sees FY2020 EPS of $2.40-$2.65, versus the consensus of $2.60. Treehouse Foods sees FY2020 revenue of $4.1-4.4 billion, versus the consensus of $4.32 billion.

TreeHouse reaffirmed its full year 2020 guidance for adjusted earnings from continuing operations of $2.40 to $2.65 per diluted share, net sales of $4.10 to $4.40 billion, and free cash flow of $250 to $300 million. The Company continues to focus on financial flexibility and anticipates current cash balances, cash flows from operations, and available sources of liquidity will be sufficient to meet cash needs.

In regard to the outlook for the balance of the year, Mr. Oakland said, "While we are very encouraged by the performance of our operations during this unprecedented period, we believe it is too early to fully appreciate how the balance of the year may unfold, given the uncertainty around the duration and potentially longer-lasting impact of the nation's stay-at-home practices in response to COVID-19. We have taken into account a number of factors and contemplated a wide range of potential outcomes - including, but not limited to, varying levels of demand in retail grocery, increased expenses to meet that demand, and declines in the food-away-from-home market. As such, we believe it is prudent to maintain our original guidance for 2020."

In regard to the outlook for the second quarter, TreeHouse anticipates the following:

• Adjusted earnings per diluted share from continuing operations of $0.40 to $0.50, up approximately 13% year-over-year at the midpoint
• Net sales between $1.05 to $1.09 billion, up approximately 4% year-over-year at the midpoint
• Adjusted EBITDA from continuing operations of $105 to $120 million, up approximately 7% year-over-year at the midpoint

For earnings history and earnings-related data on Treehouse Foods (THS) click here.

You May Also Be Interested In

• Nanometrics (NANO) Issues Business Update, Reports FY23 Results
• Plexus Corp (PLXS) Tops Q2 EPS by 7c
• Celestica (CLS) Tops Q1 EPS by 14c