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TreeHouse Foods (THS) Highlights Growth Targets for 2024-2027
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TreeHouse Foods, Inc. (THS - Free Report) has been undertaking solid efforts to operate as a more focused organization to fuel growth. The company stated that it intends to highlight its strategy for growth and value creation at its 2023 Investor Day.
TreeHouse Foods stated that it would declare its annual growth targets for 2024 through 2027 at the event. In this regard, the company expects net sales growth between 3% and 5%, adjusted EBITDA growth of 8-10% and free cash flow of more than $200 million.
Management intends to achieve these targets by undertaking strategies like fueling category leadership in high-appeal categories, extending strategic customer ties by offering private brand priorities, creating a robust supply chain, operating as a more focused organization and becoming a talent leader and undertaking strict capital allocation. For strengthening the supply chain, THS plans to generate cost savings of more than $250 million over the 2024-2027 period.
Management reiterated its previously issued guidance for the second quarter of fiscal 2023 while narrowing its adjusted EBITDA view for the fiscal.
Image Source: Zacks Investment Research
Q2 & FY23 Guidance
For the second quarter of 2023, revenues are projected in the range of $810-$840 million, indicating flat to 4% growth from the second quarter of 2022, driven by pricing. The company expects adjusted EBITDA in the band of $65-$80 million for the second quarter. The adjusted EBITDA margin is likely to be 7.9-9.4% in the quarter, calling for a 130-280 bps improvement.
In the first half of fiscal 2023, TreeHouse Foods anticipates revenues in the range of $1.705-$1.735 billion, suggesting 7.7-9.6% growth from the year-ago period.
For fiscal 2023, TreeHouse Foods expects net sales growth of 6-8% year over year to the $3.66-$3.73 billion band. Adjusted EBITDA is likely to be in the $355-$370 million range, up nearly 26% year over year at the midpoint. Adjusted EBITDA was earlier expected in the range of $345-$365 million, suggesting around 24% growth at the midpoint.
What’s More?
As a repositioned company, THS is a stronger and more focused entity, which is solidifying its position in the high-growth, high-margin categories. To this end, TreeHouse Foods has been focused on undertaking prudent acquisitions and divestitures.
On Jun 7, 2023, TreeHouse Foods inked a deal with Farmer Brothers Company to take over its Northlake, TX, coffee facility and the Farmer Brothers non-Direct Store Delivery coffee business (known as Direct Ship). This buyout will help the company enhance its coffee business capacity.
In April 2023, TreeHouse Foods added seasoned pretzel capabilities to its portfolio. In December 2020, the company acquired the majority of Riviana Foods’ U.S.-branded pasta portfolio.
Meanwhile, THS remains committed to exiting underperforming businesses and shifting its focus toward areas with high growth potential. On Oct 3, 2022, TreeHouse Foods concluded the sale of a significant portion of its Meal Preparation business, which included pasta, pourable and spoonable dressing, preserves, red sauces, syrup, dry blends and baking, dry dinners, pie filling, pita chips and other sauces. The divestiture places TreeHouse Foods well to capitalize on solid demand trends and fuel growth across its higher-margin private-label snacking and beverage categories.
Shares of this Zacks Rank #3 (Hold) company have rallied 11.8% in the past three months compared with the industry’s growth of 5.3%.
Solid Food Stocks
Some better-ranked food stocks are The Kraft Heinz Company (KHC - Free Report) , McCormick & Company, Incorporated (MKC - Free Report) and Conagra Brands (CAG - Free Report) .
The Zacks Consensus Estimate for The Kraft Heinz Company’s current fiscal-year sales and earnings suggests growth of 2.8% and 3.6%, respectively, from the year-ago reported figures.
McCormick, which operates as a manufacturer, marketer and distributor of spices, seasonings, specialty foods and flavors, currently carries a Zacks Rank #2. MKC has a trailing four-quarter negative earnings surprise of 3.7%, on average.
The Zacks Consensus Estimate for McCormick’s current fiscal-year sales and earnings suggests growth of 6.4% and 3.6%, respectively, from the year-ago reported numbers.
Conagra Brands, which operates as a consumer-packaged goods food company, currently carries a Zacks Rank #2. CAG has a trailing four-quarter earnings surprise of 13.2%, on average.
The Zacks Consensus Estimate for Conagra Brands’ current fiscal-year sales and earnings suggests growth of 7.1% and 16.5%, respectively, from the year-ago reported numbers.
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TreeHouse Foods (THS) Highlights Growth Targets for 2024-2027
TreeHouse Foods, Inc. (THS - Free Report) has been undertaking solid efforts to operate as a more focused organization to fuel growth. The company stated that it intends to highlight its strategy for growth and value creation at its 2023 Investor Day.
TreeHouse Foods stated that it would declare its annual growth targets for 2024 through 2027 at the event. In this regard, the company expects net sales growth between 3% and 5%, adjusted EBITDA growth of 8-10% and free cash flow of more than $200 million.
Management intends to achieve these targets by undertaking strategies like fueling category leadership in high-appeal categories, extending strategic customer ties by offering private brand priorities, creating a robust supply chain, operating as a more focused organization and becoming a talent leader and undertaking strict capital allocation. For strengthening the supply chain, THS plans to generate cost savings of more than $250 million over the 2024-2027 period.
Management reiterated its previously issued guidance for the second quarter of fiscal 2023 while narrowing its adjusted EBITDA view for the fiscal.
Image Source: Zacks Investment Research
Q2 & FY23 Guidance
For the second quarter of 2023, revenues are projected in the range of $810-$840 million, indicating flat to 4% growth from the second quarter of 2022, driven by pricing. The company expects adjusted EBITDA in the band of $65-$80 million for the second quarter. The adjusted EBITDA margin is likely to be 7.9-9.4% in the quarter, calling for a 130-280 bps improvement.
In the first half of fiscal 2023, TreeHouse Foods anticipates revenues in the range of $1.705-$1.735 billion, suggesting 7.7-9.6% growth from the year-ago period.
For fiscal 2023, TreeHouse Foods expects net sales growth of 6-8% year over year to the $3.66-$3.73 billion band. Adjusted EBITDA is likely to be in the $355-$370 million range, up nearly 26% year over year at the midpoint. Adjusted EBITDA was earlier expected in the range of $345-$365 million, suggesting around 24% growth at the midpoint.
What’s More?
As a repositioned company, THS is a stronger and more focused entity, which is solidifying its position in the high-growth, high-margin categories. To this end, TreeHouse Foods has been focused on undertaking prudent acquisitions and divestitures.
On Jun 7, 2023, TreeHouse Foods inked a deal with Farmer Brothers Company to take over its Northlake, TX, coffee facility and the Farmer Brothers non-Direct Store Delivery coffee business (known as Direct Ship). This buyout will help the company enhance its coffee business capacity.
In April 2023, TreeHouse Foods added seasoned pretzel capabilities to its portfolio. In December 2020, the company acquired the majority of Riviana Foods’ U.S.-branded pasta portfolio.
Meanwhile, THS remains committed to exiting underperforming businesses and shifting its focus toward areas with high growth potential. On Oct 3, 2022, TreeHouse Foods concluded the sale of a significant portion of its Meal Preparation business, which included pasta, pourable and spoonable dressing, preserves, red sauces, syrup, dry blends and baking, dry dinners, pie filling, pita chips and other sauces. The divestiture places TreeHouse Foods well to capitalize on solid demand trends and fuel growth across its higher-margin private-label snacking and beverage categories.
Shares of this Zacks Rank #3 (Hold) company have rallied 11.8% in the past three months compared with the industry’s growth of 5.3%.
Solid Food Stocks
Some better-ranked food stocks are The Kraft Heinz Company (KHC - Free Report) , McCormick & Company, Incorporated (MKC - Free Report) and Conagra Brands (CAG - Free Report) .
The Kraft Heinz Company, a food and beverage product company, currently carries a Zacks Rank #2 (Buy). KHC has a trailing four-quarter earnings surprise of 10.7%, on average. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for The Kraft Heinz Company’s current fiscal-year sales and earnings suggests growth of 2.8% and 3.6%, respectively, from the year-ago reported figures.
McCormick, which operates as a manufacturer, marketer and distributor of spices, seasonings, specialty foods and flavors, currently carries a Zacks Rank #2. MKC has a trailing four-quarter negative earnings surprise of 3.7%, on average.
The Zacks Consensus Estimate for McCormick’s current fiscal-year sales and earnings suggests growth of 6.4% and 3.6%, respectively, from the year-ago reported numbers.
Conagra Brands, which operates as a consumer-packaged goods food company, currently carries a Zacks Rank #2. CAG has a trailing four-quarter earnings surprise of 13.2%, on average.
The Zacks Consensus Estimate for Conagra Brands’ current fiscal-year sales and earnings suggests growth of 7.1% and 16.5%, respectively, from the year-ago reported numbers.