TreeHouse Foods (THS) Q2 2024 earnings summary

Executive summary

• Q2 2024 net sales reached $788.5–$789 million, down 1.9% year-over-year but above guidance midpoint, with adjusted EBITDA of $70.6–$71 million exceeding expectations.

• Net loss from continuing operations was $16.7 million, compared to net income of $22.4 million in Q2 2023, impacted by a $19.3 million impairment from exiting the Ready-to-drink business and broth facility restoration costs.

• Supply chain initiatives and restored broth facility contributed to improved service levels, with private brands gaining share and positioning for H2 volume growth.

• Share repurchases totaled $44.8–$45 million in Q2, with $78 million remaining under authorization and $89 million year-to-date.

• Acquisition of pickle branded assets for $25.9 million completed in Q2.

Financial highlights

• Q2 net sales: $788.5–$789 million, down 1.9% year-over-year, with adjusted EBITDA of $70.6–$71 million and margin of 9.0%, down from 9.5% in Q2 2023.

• Adjusted diluted EPS for Q2 was $0.29, compared to $0.43 in Q2 2023.

• Operating loss for Q2 was $4.0 million, compared to operating income of $30.3 million in Q2 2023.

• Free cash flow from continuing operations for H1 2024 was $(122.9) million, compared to $(100.9) million in 2023.

• Cash and cash equivalents at June 30, 2024 were $105.8 million, down from $320.3 million at year-end 2023.

Outlook and guidance

• 2024 net sales guidance reiterated at $3.43–$3.5 billion (flat to 2% growth); adjusted EBITDA guidance narrowed to $360–$380 million.

• Q3 2024 net sales expected at $865–$895 million (flat to 4% YoY growth); adjusted EBITDA $98–$108 million.

• Free cash flow for 2024 expected at least $130 million; CapEx guidance unchanged at $145 million.

• H2 2024 sales and profit expected to benefit from seasonality, new business conversion, and incremental pricing to recover inflation.

• Management monitoring inflation and may implement further pricing actions if necessary.