Oak Brook / IL. (thf) TreeHouse Foods Inc. reported second quarter GAAP loss per diluted share of USD (3.05) compared to a GAAP loss of USD (0.35) reported for the second quarter of 2018. The Company reported adjusted earnings per diluted share1 of USD 0.36 in the second quarter of 2019 compared to adjusted earnings per share of USD 0.38 for the second quarter of 2018. Highlights:
- Second quarter 2019 loss per diluted share was USD (3.05) compared to a loss per diluted share of USD (0.35) for the same period in 2018.
- Second quarter 2019 adjusted earnings per diluted share was USD 0.36, USD 0.01 above the top end of the Company’s guidance range and USD (0.02) below second quarter 2018.
- TreeHouse issued full year 2019 guidance for adjusted earnings per diluted share from continuing operations of USD 2.33 to USD 2.63 and Q3 adjusted earnings per diluted share from continuing operations of USD 0.52 to USD 0.62.
- TreeHouse accomplishes the majority of Portfolio Optimization efforts originally announced at December 2018 Investor Day, following today’s expected closing of the sale of the Snack Nuts and Trail Mix business to Atlas Holdings and the pending Ready-to-eat (RTE) Cereal business sale transaction to Post Holdings Inc.
«I’m pleased that our second quarter adjusted earnings per share of USD 0.36 came in slightly above the upper end of our guidance range, although revenue of USD 1.25 billion was slightly short of our expectations,» said Steve Oakland, Chief Executive Officer and President. «The TreeHouse organization continues to embrace our four-point enterprise strategy and drive good progress. Our Operational Excellence initiatives are resulting in sequential margin improvement and supply chain savings. We believe that the launch of our new customer-centric Commercial Excellence organization will begin to bear fruit in 2020 as we provide strategic thought leadership, network scale advantage and support our customers’ strategic growth plans. We’ve engaged our People and Talent by introducing our new values. Lastly, we brought resolution around the majority of our Portfolio Optimization initiatives – the sale of our snack nuts and trail mix business to Atlas Holdings and the sale of the RTE Cereal business to Post Holdings. We believe these divestitures will greatly sharpen our focus on our core categories and enhance the long-term profitability and margin profile of our company.»
«Our second quarter results continued to show improvement,» said Matthew Foulston, EVP and Chief Financial Officer. «Adjusted Ebit margin2 in the second quarter was 4.3 percent representing a 50 basis point improvement versus the prior year and 170 basis points sequentially, a direct result of our operational excellence efforts. While top line improvement is slower than anticipated due to volume loss across Baked Goods, Beverages and Meal Solutions, we are moving the organization forward with our service levels now consistently above 98 percent across the entire organization.
TreeHouse issued full year 2019 adjusted earnings from continuing operations guidance of USD 2.33 – USD 2.63 per diluted share. Both the Snacks business and the RTE Cereal business qualify for discontinued operations treatment beginning in the third quarter of 2019 and going forward results for these businesses will be removed from continuing operations of each quarter and the comparable prior year period. The guidance assumes that the full year 2019 impact on adjusted EPS related to the Snacks divestiture and the RTE divestiture will total approximately USD 0.19 and additional adjustments will total approximately USD (0.06).
In regard to the outlook for the third quarter, TreeHouse anticipates adjusted earnings per diluted share from continuing operations in the USD 0.52 to USD 0.62 range and net sales between USD 1.04 to USD 1.14 billion. The year-over-year decline in the third quarter of 2019 is expected to be driven by weaker sales in Baked Goods and Meal Solutions, partially offset by revenue growth within the Beverages division.
Oakland said, «I’m so proud of the strides our teams are making across each of the four key tenets of our customer-centric enterprise strategy as we strive to be the supply chain for our customers’ brands. We have some work to do around accelerating our revenue growth, but we are moving forward and I continue to expect that we will pivot the top line to slight positive growth in the fourth quarter of this year.»
«Beyond 2019, we continue to expect that we can deliver 1-2 percent revenue growth, greater than or equal to 10 percent earnings per share growth and at least USD 300 million in free cash flow on an annual basis,» Oakland concluded.
For additional information please read Treehouse Food’s PDF file below (391 KB):