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Treehouse Foods (THS)
NYSE:THS
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TreeHouse Foods
(NYSE:THS)54Neutral
Positive Factors
Market Share Gains
Q4 vol/mix outperformed (+3.8%), including benefits from broth supply restoration, and a smaller base for growth for THS (and private label) in snacking along with new business wins; these tip the potential in THS's favor to sustain market share gains.
Operational Focus
Management’s pivot to focus on operational execution, profitability, and cash flow is favored given the challenging food industry backdrop.
Negative Factors
Earnings Guidance
Guidance fell short for Q1 revenue and adjusted EBITDA, reflecting weak macroeconomics, recall impacts, and lagging inflation pricing.
Profitability Challenges
Gross margin lighter at 19.3% than the Street's 20.1%, indicating weaker profitability than anticipated.
Recall Impact
Current environment may be the leanest for some time looking forward due to broth recall impacts and weak industry volumes.
TreeHouse Foods (THS) vs. S&P 500 (SPY)
Market Cap
$1.52B
Dividend YieldN/A
Average Volume (3M)749.22K
Price to Earnings (P/E)56.4
Beta (1Y)0.56
Revenue Growth-4.59%
EPS Growth-42.81%
CountryUS
Employees7,400
SectorConsumer Defensive
Sector Strength73
IndustryConsumer Products - Foods
Share Statistics
EPS (TTM)0.54
Shares Outstanding50,203,510
10 Day Avg. Volume783,533
30 Day Avg. Volume749,218
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.45
Price to Cash Flow (P/CF)1.30
P/FCF Ratio1.50
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$33.83Price Target Upside7.02% Upside
Rating ConsensusHold
Number of Analyst Covering8
TreeHouse Foods Business Overview & Revenue Model
Company DescriptionTreeHouse Foods, Inc. (THS) is a leading manufacturer and distributor of private label packaged foods and beverages in North America. The company specializes in producing a wide range of products including snacks, beverages, meal solutions, and condiments, serving retail grocery, foodservice, and industrial customers. TreeHouse Foods is known for its commitment to providing high-quality, affordable private label products to its clients while focusing on operational excellence and customer satisfaction.
How the Company Makes MoneyTreeHouse Foods generates revenue primarily through the manufacturing and sale of private label packaged foods and beverages to retail grocery chains, foodservice distributors, and industrial customers. The company's key revenue streams include sales of snacks, beverages, and meal solutions, which are distributed under both private label and regional brands. TreeHouse Foods benefits from economies of scale due to its large production capacity and extensive distribution network, allowing it to offer competitive pricing. Additionally, the company may engage in strategic partnerships with retailers to expand its market reach and enhance product offerings, further contributing to its earnings.
TreeHouse Foods Financial Statement Overview
Summary
TreeHouse Foods is navigating through a period of revenue volatility with signs of operational improvements. Balance sheet metrics indicate better leverage management, but profitability remains a concern. Cash flow performance shows recovery potential, but sustainability requires attention.Income Statement
TreeHouse Foods has experienced fluctuating revenue with a decline from 2022 but a slight improvement in gross profit margins. The net profit margin is low due to increased operating expenses, impacting overall profitability. EBIT and EBITDA margins show some recovery, indicating potential operational improvements.65
Positive
Balance Sheet
The company's debt-to-equity ratio has improved over the years, reflecting better leverage management. However, the return on equity remains modest, suggesting limited profitability relative to equity. The equity ratio indicates a stable but slightly weakened financial structure.70
Positive
Cash Flow
Cash flow from operations shows a recovery trend, but free cash flow remains inconsistent due to high capital expenditures. The operating cash flow to net income ratio suggests operating efficiency, but free cash flow to net income is less stable.60
Neutral
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 3.35B | 3.43B | 3.45B | 4.33B | 4.35B | Gross Profit |
| 548.40M | 576.10M | 514.90M | 698.10M | 802.20M | EBIT |
| 103.10M | 146.90M | 68.30M | 72.20M | 149.10M | EBITDA |
| 103.10M | 300.10M | 213.70M | 93.90M | 306.70M | Net Income Common Stockholders |
| 26.90M | 53.10M | -16.10M | -27.10M | 49.20M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 289.60M | 320.30M | 43.00M | 308.60M | 364.60M | Total Assets |
| 3.98B | 4.11B | 4.25B | 5.21B | 5.49B | Total Debt |
| 1.53B | 1.60B | 1.55B | 2.05B | 2.39B | Net Debt |
| 1.24B | 1.28B | 1.51B | 1.74B | 2.03B | Total Liabilities |
| 2.43B | 2.44B | 2.57B | 3.36B | 3.62B | Stockholders Equity |
| 1.55B | 1.66B | 1.69B | 1.85B | 1.86B |
| Cash Flow | Free Cash Flow | |||
| 126.10M | 16.50M | -245.50M | 209.00M | 311.00M | Operating Cash Flow |
| 265.80M | 157.30M | -150.70M | 324.90M | 416.70M | Investing Cash Flow |
| -138.30M | 226.70M | 412.00M | -16.80M | -332.40M | Financing Cash Flow |
| -159.30M | -107.50M | -522.70M | -362.30M | 74.00M |
TreeHouse Foods Technical Analysis
Negative
31.61
Price Trends
33.39
Negative
34.68
Negative
36.70
Negative
Market Momentum
-0.75
Negative
46.34
Neutral
38.66
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For THS, the sentiment is Negative. The current price of 31.61 is below the 20-day moving average (MA) of 31.69, below the 50-day MA of 33.39, and below the 200-day MA of 36.70, indicating a bearish trend. The MACD of -0.75 indicates Negative momentum. The RSI at 46.34 is Neutral, neither overbought nor oversold. The STOCH value of 38.66 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for THS.
TreeHouse Foods Risk Analysis
TreeHouse Foods disclosed 26 risk factors in its most recent earnings report. TreeHouse Foods reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
TreeHouse Foods Peers Comparison
Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $6.42B | 19.23 | 10.01% | ― | 7.32% | 34.44% | |
65 Neutral | $11.86B | 22.92 | 13.43% | 3.77% | 6.34% | -30.58% | |
64 Neutral | $15.95B | 21.05 | 9.54% | 3.92% | -1.84% | -5.14% | |
63 Neutral | $20.85B | 13.27 | -10.88% | 7.48% | 1.13% | 11.50% | |
62 Neutral | $11.86B | 22.22 | -3.55% | 3.86% | 7.07% | -181.54% | |
60 Neutral | $546.05M | ― | -36.94% | 11.01% | -6.30% | -258.92% | |
54 Neutral | $1.52B | 56.36 | 1.67% | ― | -4.59% | -42.81% |
* Consumer Defensive Sector Average
Performance Comparison
THS
TreeHouse Foods
31.61
-5.64
-15.14%
BGS
B&G Foods
7.65
-2.80
-26.79%
CPB
Campbell Soup
41.81
0.22
0.53%
HRL
Hormel Foods
29.94
-3.04
-9.22%
SJM
JM Smucker
117.38
0.40
0.34%
POST
Post Holdings
116.92
13.91
13.50%
TreeHouse Foods Earnings Call Summary
Earnings Call Date: Feb 14, 2025 | % Change Since: -4.96% | Next Earnings Date: May 12, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed view with notable achievements such as the acquisition of Harris Tea and cost savings, but was overshadowed by challenges including the frozen griddle recall and deceleration in private brand sales. The company is focused on improving supply chain efficiency and cost management amidst a challenging macro environment.Highlights
Acquisition of Harris Tea
TreeHouse Foods completed the purchase of Harris Tea in January, strengthening its position in the private label tea category and adding unique blending and sourcing capabilities.
Improvement in Volume and Mix
Fourth quarter adjusted net sales of $911.4 million and adjusted EBITDA of $118.3 million were in line with expectations, with almost 4% growth driven by improved volume and mix.
Cost Savings Achieved
Significant cost savings were achieved through procurement initiatives, securing $60 million in gross savings for 2024.
Positive Share Trends
Private brands maintained share despite weaker consumption, with healthy price gaps and gradual increases in promotions.
Lowlights
Frozen Griddle Product Recall
A voluntary recall of frozen griddle products impacted supply chain operations, with no significant financial contribution expected from Griddle in the first quarter.
Supply Chain Challenges
Supply chain disruptions due to the frozen griddle recall and broth facility issues continued to impact operations.
Deceleration in Private Brand Sales
Private brand unit sales experienced a sharp deceleration during the fourth quarter due to macroeconomic pressures.
Flat Volume and Mix for Fiscal Year 2024
Despite achieving cost savings, TreeHouse Foods delivered flattish volume and mix for the year, indicating ongoing operational challenges.
Company Guidance
During TreeHouse Foods' fourth quarter 2024 conference call, the company provided detailed guidance for its 2025 outlook. They anticipate adjusted net sales to range between $3.34 billion to $3.4 billion, with an adjusted EBITDA of $345 to $375 million, reflecting a focus on cost optimization and margin management amidst challenging macroeconomic conditions. The company expects free cash flow of at least $130 million and capital expenditures around $125 million, lower than previous years as they conclude major projects. TreeHouse highlighted an expected 1% decline in organic volume and mix due to strategic exits and the impact of a frozen griddle recall, while projecting a 1% benefit from commodity-related pricing adjustments. The first quarter of 2025 is guided to see adjusted net sales between $785 million to $800 million, with an adjusted EBITDA range of $38 million to $46 million. The company also outlined its strategy to achieve $250 million in gross supply chain savings by 2027, reinforcing its commitment to improving profitability and operational efficiency.TreeHouse Foods Corporate Events
M&A TransactionsBusiness Operations and Strategy
TreeHouse Foods Acquires Harris Freeman’s Tea Business
Positive
Dec 2, 2024
TreeHouse Foods, Inc. has announced a significant acquisition deal, purchasing the private brand tea business of Harris Freeman & Co for approximately $205 million. This move enhances TreeHouse’s position in the growing tea sector, adding unique capabilities and strengthening its market position. The acquisition includes facilities in New Jersey and Georgia and is expected to boost TreeHouse’s growth and margins. The transaction is anticipated to close in early 2025 and aligns with TreeHouse’s strategy to expand in higher-growth, higher-margin categories.
Stock BuybackBusiness Operations and Strategy
TreeHouse Foods Announces $400 Million Share Buyback Plan
Positive
Nov 13, 2024
TreeHouse Foods, Inc. has announced a renewed $400 million share repurchase authorization, highlighting confidence in its financial strength and future cash generation. The company plans to repurchase shares opportunistically, maintaining an annual cap of $150 million, and will hold these as treasury stock. This move underscores TreeHouse’s commitment to delivering shareholder value and reflects a strategic approach to capital allocation.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.