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Treehouse Foods (THS)
NYSE:THS
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TreeHouse Foods
(NYSE:THS)
57Neutral
Positive Factors
Earnings Performance
EBITDA grew by 25% as a result of product mix, pricing, and productivity.
Operational Improvements
The company's operational improvements include reducing layers of management and consolidating operating divisions to adjust their cost structure effectively.
Valuation
Valuation considered attractive with enterprise value at 7.3 times.
Negative Factors
Guidance Shortfall
Guidance fell short for Q1 revenue and adjusted EBITDA, reflecting weak macroeconomics, recall impacts, and lagging inflation pricing.
Organic Growth
Organic growth declined by -7.5%, influenced by a significant drop in volume/mix and product recalls, only partially offset by pricing.
Volume Decline
The volume/mix decline of -8.3% was highly disappointing and perplexing for investors expecting private label food suppliers to capitalize on strong consumer demand.
TreeHouse Foods (THS) vs. S&P 500 (SPY)
Market Cap
$1.11B
Dividend YieldN/A
Average Volume (3M)745.14K
Price to Earnings (P/E)170.6
Beta (1Y)0.39
Revenue Growth-3.37%
EPS Growth-65.26%
CountryUS
Employees7,400
SectorConsumer Defensive
Sector Strength79
IndustryPackaged Foods
Share Statistics
EPS (TTM)0.03
Shares Outstanding50,203,510
10 Day Avg. Volume780,414
30 Day Avg. Volume745,143
Financial Highlights & Ratios
PEG Ratio0.20
Price to Book (P/B)0.74
Price to Sales (P/S)0.00
P/FCF Ratio9.05
Enterprise Value/Market Cap2.18
Enterprise Value/Revenue0.18
Enterprise Value/Gross Profit4.41
Enterprise Value/Ebitda2.62
Forecast
1Y Price Target
$25.13Price Target Upside11.19% Upside
Rating ConsensusHold
Number of Analyst Covering9
TreeHouse Foods Business Overview & Revenue Model
Company DescriptionTreeHouse Foods, Inc. manufactures and distributes private label foods and beverages in the United States and internationally. It operates through two segments, Meal Preparation, and Snacking & Beverages. The Meal Preparation segment provides aseptic cheese and pudding products; baking and mix powders; hot cereals; jams, preserves, and jellies; liquid and powdered non-dairy creamers; macaroni and cheese; mayonnaise; Mexican, barbeque, and other sauces; pastas; pickles and related products; powdered soups and gravies; refrigerated and shelf stable dressings and sauces; refrigerated dough; single serve hot beverages; skillet dinners; and table and flavored syrups. The Snacking & Beverages segment offers bars, broths, candies, cookies, crackers, in-store bakery products, pita chips, powdered drinks, pretzels, ready-to-drink coffee, retail griddle waffles, pancakes, French toasts, specialty teas, and sweeteners. The company sells its products through various distribution channels, including retailers, foodservice distributors, and co-manufacturers, as well as industrial and export, which includes food manufacturers and repackagers of foodservice products. TreeHouse Foods, Inc. was founded in 1862 and is based in Oak Brook, Illinois.
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 shows revenue volatility with signs of operational improvements. The balance sheet indicates better leverage management, but profitability remains a concern. Cash flow performance shows recovery potential, yet 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 |
| 243.60M | 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 |
| 1.57B | 1.60B | 1.55B | 2.05B | 2.39B | Net Debt |
| 1.28B | 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
22.60
Price Trends
25.55
Negative
29.63
Negative
34.11
Negative
Market Momentum
-0.85
Negative
43.42
Neutral
43.30
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 22.6 is below the 20-day moving average (MA) of 22.61, below the 50-day MA of 25.55, and below the 200-day MA of 34.11, indicating a bearish trend. The MACD of -0.85 indicates Negative momentum. The RSI at 43.42 is Neutral, neither overbought nor oversold. The STOCH value of 43.30 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 (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | $5.94B | 10.34 | 21.60% | 2.59% | 5.85% | ― | |
71 Outperform | $611.55M | 16.13 | 6.35% | ― | 4.01% | 22.46% | |
68 Neutral | $11.02B | 33.79 | 3.67% | 6.06% | -3.15% | -65.38% | |
64 Neutral | $8.78B | 14.76 | 5.05% | 174.28% | 3.62% | 3.48% | |
59 Neutral | $1.47B | 26.38 | 17.70% | 3.79% | -3.13% | -51.40% | |
57 Neutral | $1.11B | 170.63 | 0.43% | ― | -3.37% | -65.26% | |
53 Neutral | $1.71B | 36.38 | 3.93% | 1.92% | -1.29% | ― |
* Consumer Defensive Sector Average
Performance Comparison
THS
TreeHouse Foods
22.60
-12.36
-35.35%
BRFS
BRF SA
3.38
-0.08
-2.31%
CAG
Conagra Brands
23.09
-6.30
-21.44%
SENEA
Seneca Foods
88.50
28.94
48.59%
UTZ
UTZ Brands
12.47
-5.59
-30.95%
KLG
WK Kellogg Co
17.01
-4.13
-19.54%
TreeHouse Foods Earnings Call Summary
Earnings Call Date:May 06, 2025
(Q1-2025)
| % Change Since: -3.62%|
Next Earnings Date:Aug 11, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted positive progress in operational efficiency and cost structure improvements, with strong adjusted EBITDA growth. However, these were tempered by declines in net sales and challenges from a griddle recall. The sentiment is balanced by both positive outcomes and ongoing challenges.Q1-2025 Updates
Positive Updates
Adjusted EBITDA Exceeds Guidance
Adjusted EBITDA came in above the upper end of TreeHouse Foods' guidance range, reflecting positive returns on margin improvement plans and operational efficiency.
Operational Progress at Brantford Facility
The frozen griddle facility in Brantford, Ontario is fully operational, expected to positively impact the latter half of the year.
Supply Chain and Cost Structure Improvements
TreeHouse Foods achieved significant progress in supply chain and cost structure, with a visible $250 million gross supply chain savings target by 2027.
Strong Adjusted EBITDA Growth
Adjusted EBITDA was $57.5 million, up 25% year-over-year, with a margin of 7.2%, an increase of 160 basis points compared to last year.
Negative Updates
Decline in Adjusted Net Sales
Adjusted net sales decreased approximately 3% year-over-year, primarily due to planned margin management actions and slower consumer demand.
Private Brand Unit Sales Decline
Private brand unit sales were slightly negative due to consumer pressure and a shift in the Easter holiday.
Impact of Griddle Recall
Net sales were negatively impacted by direct griddle recall-related returns, contributing to a sales decline of approximately 1%.
Company Guidance
During TreeHouse Foods' Q1 2025 earnings call, the company provided guidance and insights into its financial and operational performance. The adjusted net sales for the quarter were within the guidance range, while adjusted EBITDA surpassed the upper end, partly due to a $6 million shift in planned expenses to Q2. The adjusted EBITDA margin increased by 160 basis points to 7.2% year-over-year. Looking ahead, TreeHouse reiterated its full-year guidance with adjusted net sales expected to range from a 1% decline to a 1% increase, and adjusted EBITDA between $345 million and $375 million. The company also highlighted a focus on margin management and supply chain efficiencies, targeting $250 million in gross savings by 2027. In terms of capital allocation, TreeHouse plans to maintain a strong balance sheet, aiming to move its net debt to adjusted EBITDA ratio closer to its desired range of 3 to 3.5 times.TreeHouse Foods Corporate Events
Executive/Board ChangesBusiness Operations and Strategy
TreeHouse Foods Announces Major Restructuring Plan
Neutral
Apr 10, 2025
On April 10, 2025, TreeHouse Foods announced a restructuring plan that includes eliminating the role of Executive Vice President, Business President, and Chief Commercial Officer, held by Scott Tassani, who will remain until May 30, 2025. The company aims to enhance operational efficiency, cost savings, and profitability, impacting approximately 150 roles, while reaffirming its 2025 financial guidance with anticipated cost savings and improved competitiveness.
Spark’s Take on THS Stock
According to Spark, TipRanks’ AI Analyst, THS is a Neutral.
TreeHouse Foods faces challenges with profitability and bearish technical indicators, contributing to a moderate overall score. The company’s high P/E ratio suggests overvaluation, while the recent acquisition in the tea sector provides a potential growth avenue. Operational improvements and cost savings are positive, but macroeconomic pressures and internal challenges remain significant.
To see Spark’s full report on THS stock, click here.
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.