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THS posted Q2 adjusted EPS of $0.17, beating estimates but falling from $0.29 a year ago.
Net sales rose 1.2% to $798M, driven by pricing gains and the Harris Tea acquisition.
The gross margin rose 1.1 percentage points to 17.4%, aided by insurance recoveries and supply-chain savings.
TreeHouse Foods, Inc. (THS - Free Report) reported second-quarter 2025 results, wherein both top and bottom lines beat the Zacks Consensus Estimate. While net sales increased, earnings decreased from the year-ago period.
TreeHouse Foods posted adjusted earnings of 17 cents per share, beating the Zacks Consensus Estimate, which was pegged at 10 cents. The adjusted earnings decreased from 29 cents per share reported in the year-ago quarter.
Net sales of $798 million rose 1.2% year over year, driven primarily by the acquisition of the private brand tea business, favorable pricing to offset commodity inflation and distribution gains. These benefits were partially offset by volume/mix declines stemming from planned margin management actions, broader macroeconomic consumption trends, service disruptions related to the voluntary recall of frozen griddle products and the exit from the ready-to-drink (“RTD”) business. Adjusted net sales were $801.4 million, up 1.4% from the prior year and ahead of the consensus estimate of $787 million.
In the second quarter, the volume/mix had a negative impact of 6.2%, partially offset by a 4.5% contribution from a recent business acquisition. Pricing actions added 4.2%, while the business exit resulted in a 1% decline and product recall returns and unfavorable foreign currency contributed an additional decrease of 0.2% and 0.1%, respectively, to net sales.
TreeHouse Foods, Inc. Price, Consensus and EPS Surprise
TreeHouse Foods’ gross profit as a percentage of net sales rose 1.1 percentage points to 17.4% in the second quarter of 2025. This improvement was primarily driven by $13.1 million in insurance recoveries related to voluntary product recalls, supply-chain cost-saving initiatives and favorable margins from the Harris Tea acquisition. These gains were partially offset by commodity-cost inflation and unfavorable fixed-cost absorption resulting from softer consumption trends.
Total operating expenses reached $111.9 million, down from $132.3 million in the second quarter of 2024, a decrease of $20.4 million. The year-over-year decline was primarily due to a $19.3 million non-cash impairment charge recorded in the second quarter of 2024 related to the RTD beverages asset group, as well as ongoing cost-reduction initiatives in 2025.
Adjusted EBITDA rose to $73.3 million, up from $70.6 million in the same period of 2024. The improvement was driven by supply-chain cost-saving measures, accretive contributions from the Harris Tea acquisition and continued cost-reduction efforts. These gains were partially offset by commodity cost inflation and unfavorable fixed-cost absorption resulting from weaker consumption trends.
TreeHouse Foods’ Financial Health Snapshot
This Zacks Rank #3 (Hold) company concluded the quarter with cash and cash equivalents of $17.1 million, long-term debt of $1,496.7 million, and total shareholders’ equity of $1,525.1 million. In the six months ended June 30, 2025, the company’s net cash used in operating activities was $100.7 million.
Sneak Peek Into THS’s 2025 Outlook
TreeHouse Foods now expects adjusted net sales in the range of $3.360 billion to $3.415 billion, indicating a year-over-year change between a 0.5% decline and 1% growth for 2025. Earlier, the metric was expected in the $3.34 billion to $3.40 billion range, implying a 1% decline to 1% growth.
This projection is influenced by an anticipated 1% decline in volume/mix due to organic volume declines, the Harris Tea volume benefit being offset by the previously announced exit from the Ready-to-Drink business, other margin management actions and the one-time impact of the frozen griddle product recall. Pricing is now expected to contribute a low-single-digit benefit, driven by commodity-related pricing actions.
Adjusted EBITDA from continuing operations is still forecasted to be between $345 million and $375 million. Capital expenditures are expected to be nearly $125 million, while free cash flow is anticipated to be at least $130 million.
What to Expect From THS in Q3
TreeHouse Foods’ adjusted net sales are estimated to be between $840 million and $870 million, flat year over year at the midpoint in the third quarter. Organic volume and mix are expected to decline in the high single digits, primarily due to ongoing margin management strategies. However, pricing actions are anticipated to contribute an approximate 4% gain.
Adjusted EBITDA for the third quarter is forecasted to be between $90 million and $110 million.
THS stock has slumped 19% in the past three months compared with the industry’s 0.9% decline.
The consensus estimate for Post Holdings’ current fiscal-year sales and earnings indicates growth of 2.7% and 7.3%, respectively, from the prior-year levels. POST delivered a trailing four-quarter earnings surprise of 22.9%, on average.
The Chefs' Warehouse, Inc. (CHEF - Free Report) distributes specialty food and center-of-the-plate products in the United States, the Middle East and Canada. The company presently carries a Zacks Rank of 2 (Buy). CHEF delivered a trailing four-quarter earnings surprise of 11.3%, on average.
The Zacks Consensus Estimate for The Chefs' Warehouse’s current fiscal-year sales and earnings indicates growth of 6% and 12.2%, respectively, from the prior-year levels.
Nomad Foods (NOMD - Free Report) , which manufactures frozen foods, has a Zacks Rank # 2 at present. NOMD delivered a trailing four-quarter earnings surprise of 3.2%, on average.
The Zacks Consensus Estimate for Nomad Foods’ current financial-year sales and earnings implies growth of 8.6% and 10.4%, respectively, from the year-ago number.
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TreeHouse Foods Q2 Earnings Beat Estimates, Sales Rise Y/Y
Key Takeaways
TreeHouse Foods, Inc. (THS - Free Report) reported second-quarter 2025 results, wherein both top and bottom lines beat the Zacks Consensus Estimate. While net sales increased, earnings decreased from the year-ago period.
TreeHouse Foods’ Quarterly Performance: Key Insights
TreeHouse Foods posted adjusted earnings of 17 cents per share, beating the Zacks Consensus Estimate, which was pegged at 10 cents. The adjusted earnings decreased from 29 cents per share reported in the year-ago quarter.
Net sales of $798 million rose 1.2% year over year, driven primarily by the acquisition of the private brand tea business, favorable pricing to offset commodity inflation and distribution gains. These benefits were partially offset by volume/mix declines stemming from planned margin management actions, broader macroeconomic consumption trends, service disruptions related to the voluntary recall of frozen griddle products and the exit from the ready-to-drink (“RTD”) business. Adjusted net sales were $801.4 million, up 1.4% from the prior year and ahead of the consensus estimate of $787 million.
In the second quarter, the volume/mix had a negative impact of 6.2%, partially offset by a 4.5% contribution from a recent business acquisition. Pricing actions added 4.2%, while the business exit resulted in a 1% decline and product recall returns and unfavorable foreign currency contributed an additional decrease of 0.2% and 0.1%, respectively, to net sales.
TreeHouse Foods, Inc. Price, Consensus and EPS Surprise
TreeHouse Foods, Inc. price-consensus-eps-surprise-chart | TreeHouse Foods, Inc. Quote
THS’s Margin & Cost Details
TreeHouse Foods’ gross profit as a percentage of net sales rose 1.1 percentage points to 17.4% in the second quarter of 2025. This improvement was primarily driven by $13.1 million in insurance recoveries related to voluntary product recalls, supply-chain cost-saving initiatives and favorable margins from the Harris Tea acquisition. These gains were partially offset by commodity-cost inflation and unfavorable fixed-cost absorption resulting from softer consumption trends.
Total operating expenses reached $111.9 million, down from $132.3 million in the second quarter of 2024, a decrease of $20.4 million. The year-over-year decline was primarily due to a $19.3 million non-cash impairment charge recorded in the second quarter of 2024 related to the RTD beverages asset group, as well as ongoing cost-reduction initiatives in 2025.
Adjusted EBITDA rose to $73.3 million, up from $70.6 million in the same period of 2024. The improvement was driven by supply-chain cost-saving measures, accretive contributions from the Harris Tea acquisition and continued cost-reduction efforts. These gains were partially offset by commodity cost inflation and unfavorable fixed-cost absorption resulting from weaker consumption trends.
TreeHouse Foods’ Financial Health Snapshot
This Zacks Rank #3 (Hold) company concluded the quarter with cash and cash equivalents of $17.1 million, long-term debt of $1,496.7 million, and total shareholders’ equity of $1,525.1 million. In the six months ended June 30, 2025, the company’s net cash used in operating activities was $100.7 million.
Sneak Peek Into THS’s 2025 Outlook
TreeHouse Foods now expects adjusted net sales in the range of $3.360 billion to $3.415 billion, indicating a year-over-year change between a 0.5% decline and 1% growth for 2025. Earlier, the metric was expected in the $3.34 billion to $3.40 billion range, implying a 1% decline to 1% growth.
This projection is influenced by an anticipated 1% decline in volume/mix due to organic volume declines, the Harris Tea volume benefit being offset by the previously announced exit from the Ready-to-Drink business, other margin management actions and the one-time impact of the frozen griddle product recall. Pricing is now expected to contribute a low-single-digit benefit, driven by commodity-related pricing actions.
Adjusted EBITDA from continuing operations is still forecasted to be between $345 million and $375 million. Capital expenditures are expected to be nearly $125 million, while free cash flow is anticipated to be at least $130 million.
What to Expect From THS in Q3
TreeHouse Foods’ adjusted net sales are estimated to be between $840 million and $870 million, flat year over year at the midpoint in the third quarter. Organic volume and mix are expected to decline in the high single digits, primarily due to ongoing margin management strategies. However, pricing actions are anticipated to contribute an approximate 4% gain.
Adjusted EBITDA for the third quarter is forecasted to be between $90 million and $110 million.
THS stock has slumped 19% in the past three months compared with the industry’s 0.9% decline.
Image Source: Zacks Investment Research
Better-Ranked Stocks
Post Holdings, Inc. (POST - Free Report) operates as a consumer-packaged goods holding company in the United States and internationally. It currently sports a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus estimate for Post Holdings’ current fiscal-year sales and earnings indicates growth of 2.7% and 7.3%, respectively, from the prior-year levels. POST delivered a trailing four-quarter earnings surprise of 22.9%, on average.
The Chefs' Warehouse, Inc. (CHEF - Free Report) distributes specialty food and center-of-the-plate products in the United States, the Middle East and Canada. The company presently carries a Zacks Rank of 2 (Buy). CHEF delivered a trailing four-quarter earnings surprise of 11.3%, on average.
The Zacks Consensus Estimate for The Chefs' Warehouse’s current fiscal-year sales and earnings indicates growth of 6% and 12.2%, respectively, from the prior-year levels.
Nomad Foods (NOMD - Free Report) , which manufactures frozen foods, has a Zacks Rank # 2 at present. NOMD delivered a trailing four-quarter earnings surprise of 3.2%, on average.
The Zacks Consensus Estimate for Nomad Foods’ current financial-year sales and earnings implies growth of 8.6% and 10.4%, respectively, from the year-ago number.