TreeHouse Foods, Inc. THS shares are trading lower after the company reported mixed fourth-quarter results and issued FY24 outlook below estimates.
The company reported fourth-quarter adjusted EPS of 77 cents, beating the analyst consensus of 73 cents. However, quarterly net sales of $910.8 million missed the consensus of $925.44 million.
The net sales decreased by 4.8%, mostly due to volume/mix in the retail business, which was impacted by supply chain disruption at one of the broth facilities and in its pretzels and cookies categories.
Adjusted EBITDA from continuing operations was $108.4 million in the fourth quarter of 2023, compared to $118.5 million in the year-ago period.
Gross profit as a percentage of net sales was 16.7% in the quarter under review, a decrease from 18.3% in the year-ago period. The decline was primarily due to supply chain disruption, along with increased labor and manufacturing plant maintenance costs.
During the fourth quarter of 2023, the company repurchased approximately 1.2 million shares of common stock for a total of $50.0 million, excluding excise tax.
Outlook: TreeHouse Foods expects FY24 revenues to be $3.43 billion-$3.50 billion versus the $3.56 billion estimate. The company anticipates first-quarter net sales of $780 million-$810 million, below the $887.38 million estimate.
The company estimates that ongoing efforts to restart one of the broth facilities will have a net sales and adjusted EBITDA impact of roughly $60 million and $20 million, respectively, in FY24.
Price Action: THS shares are trading lower by 9.9% to $38.50 premarket on the last check Friday.