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Treehouse Foods Hits 52-Week High on Strong Q1 Results
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Shares of Treehouse Foods Inc. (THS - Free Report) reached a 52-week high of $99.49 on Jun 28 and eventually closed at $98.64. Shares have been gaining momentum since the company reported strong first quarter 2016 results on May 5.
What Led to the Rise?
Estimates have been increasing over the past 60 days since the food manufacturer posted better-than-expected first quarter 2016 results. This Illinois-based food company posted earnings per share of 48 cents per share in the first quarter of 2016. Though earnings declined 18.6% from the year-ago level due to lower gross margin and currency headwinds, it beat the Zacks Consensus Estimate of 40 cents by 20% and were way ahead of the company’s guided range of 38 - 43 cents.
Net sales of $1.270 billion beat the Zacks Consensus Estimate of $1.248 billion by 1.8%. Sales also grew significantly by 62.2% year over year due to the inclusion of business from the Private Brands acquisition, partially offset by lower volume/mix, primarily in the Industrial and Export segment, and currency headwinds.
All the segments posted strong growth on a year-over-year basis. North American Retail Grocery segment sales increased 72.1%. Sales from the Food Away From Home segment grew 27.5%; and sales from the Industrial and Export segment increased 35%.
Adjusted EBITDA increased 48.2% to $125.2 million driven by the inclusion of operating income from the acquisition of the private brands operations of ConAgra Foods, Inc. (CAG - Free Report) , operating efficiencies, and favorable commodity costs, partially offset by currency headwinds and lower legacy volumes.
Looking Ahead
In 2016, the company anticipates weakness in the overall food industry. However, TreeHouse is optimistic about its acquisitions and plans to focus on integrating its recently closed acquisition of the Private Brands Business.
TreeHouse net sales are expected to double in 2016 to approximately $6.3-$6.5 billion, driven by the addition of the Private Brands Business, despite its lower margin structure than the legacy TreeHouse business.
TreeHouse carries a Zacks Rank #3 (Hold).
Stocks to Consider
Some better-ranked stocks in the food industry include Post Holdings, Inc. (POST - Free Report) and United Natural Foods Inc. (UNFI - Free Report) . Both of them sport a Zacks Rank #1 (Strong Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.Click to get this free report >>
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Treehouse Foods Hits 52-Week High on Strong Q1 Results
Shares of Treehouse Foods Inc. (THS - Free Report) reached a 52-week high of $99.49 on Jun 28 and eventually closed at $98.64. Shares have been gaining momentum since the company reported strong first quarter 2016 results on May 5.
What Led to the Rise?
Estimates have been increasing over the past 60 days since the food manufacturer posted better-than-expected first quarter 2016 results. This Illinois-based food company posted earnings per share of 48 cents per share in the first quarter of 2016. Though earnings declined 18.6% from the year-ago level due to lower gross margin and currency headwinds, it beat the Zacks Consensus Estimate of 40 cents by 20% and were way ahead of the company’s guided range of 38 - 43 cents.
TREEHOUSE FOODS Price
TREEHOUSE FOODS Price | TREEHOUSE FOODS Quote
Net sales of $1.270 billion beat the Zacks Consensus Estimate of $1.248 billion by 1.8%. Sales also grew significantly by 62.2% year over year due to the inclusion of business from the Private Brands acquisition, partially offset by lower volume/mix, primarily in the Industrial and Export segment, and currency headwinds.
All the segments posted strong growth on a year-over-year basis. North American Retail Grocery segment sales increased 72.1%. Sales from the Food Away From Home segment grew 27.5%; and sales from the Industrial and Export segment increased 35%.
Adjusted EBITDA increased 48.2% to $125.2 million driven by the inclusion of operating income from the acquisition of the private brands operations of ConAgra Foods, Inc. (CAG - Free Report) , operating efficiencies, and favorable commodity costs, partially offset by currency headwinds and lower legacy volumes.
Looking Ahead
In 2016, the company anticipates weakness in the overall food industry. However, TreeHouse is optimistic about its acquisitions and plans to focus on integrating its recently closed acquisition of the Private Brands Business.
TreeHouse net sales are expected to double in 2016 to approximately $6.3-$6.5 billion, driven by the addition of the Private Brands Business, despite its lower margin structure than the legacy TreeHouse business.
TreeHouse carries a Zacks Rank #3 (Hold).
Stocks to Consider
Some better-ranked stocks in the food industry include Post Holdings, Inc. (POST - Free Report) and United Natural Foods Inc. (UNFI - Free Report) . Both of them sport a Zacks Rank #1 (Strong Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.Click to get this free report >>