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Treehouse Foods (THS)
NYSE:THS
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TreeHouse Foods
(NYSE:THS)
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Rating:61Neutral
Price Target:
$19.50
▲(12.20% Upside)
TreeHouse Foods' overall score is driven by a solid earnings call performance, highlighting successful margin improvement and strategic initiatives. However, financial performance is hindered by low profitability and high leverage, while technical indicators suggest bearish momentum. The high P/E ratio indicates overvaluation, further impacting the score.
Positive Factors
Margin Improvement
Exceeding guidance in sales and EBITDA indicates effective margin improvement strategies, enhancing profitability and operational efficiency.
Strategic Acquisitions
Strategic acquisitions like Harris Tea bolster product offerings and market reach, supporting long-term revenue growth and competitive positioning.
Supply Chain Optimization
Commitment to significant supply chain savings enhances cost efficiency, potentially improving margins and financial flexibility over the long term.
Negative Factors
Volume Decline
Expected volume decline indicates potential market share loss and revenue pressure, challenging growth and competitive positioning.
Commodity Inflation
Commodity inflation pressures margins and profitability, requiring effective cost management to mitigate long-term financial impact.
Plant Closures
Plant closures may reduce operational capacity and flexibility, potentially impacting product availability and market responsiveness.
TreeHouse Foods (THS) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$877.69M
Dividend YieldN/A
Average Volume (3M)864.54K
Price to Earnings (P/E)44.4
Beta (1Y)0.49
Revenue Growth-1.52%
EPS GrowthN/A
CountryUS
Employees7,400
SectorConsumer Defensive
Sector Strength42
IndustryPackaged Foods
Share Statistics
EPS (TTM)0.17
Shares Outstanding50,500,000
10 Day Avg. Volume790,544
30 Day Avg. Volume864,542
Financial Highlights & Ratios
PEG Ratio-1.51
Price to Book (P/B)1.18
Price to Sales (P/S)0.55
P/FCF Ratio14.54
Enterprise Value/Market Cap2.97
Enterprise Value/Revenue0.78
Enterprise Value/Gross Profit4.64
Enterprise Value/Ebitda10.38
Forecast
1Y Price Target
$20.83Price Target Upside19.85% Upside
Rating ConsensusHold
Number of Analyst Covering7
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 sale of its private label products to retailers and foodservice operators. The company's revenue model is centered on producing and marketing a diverse range of food items that cater to consumer demand for affordable alternatives to branded products. Key revenue streams include sales from their various product lines, which are often sold under the retailer's brand name, as well as contract manufacturing services for other companies. Significant partnerships with major grocery chains and foodservice providers enhance their market reach and contribute to steady sales. Additionally, TreeHouse Foods focuses on cost efficiencies in production and supply chain management to maintain profitability.
TreeHouse Foods Earnings Call Summary
Earnings Call Date:Jul 31, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Nov 10, 2025
Earnings Call Sentiment Neutral
TreeHouse Foods experienced a mixed quarter with several positive achievements, including exceeding sales and EBITDA guidance and operational improvements. However, challenges such as volume declines, commodity inflation, and plant closures tempered the overall performance. While strategic acquisitions and cost-saving initiatives show promise for future growth, current headwinds in volume and mix remain a concern.Q2-2025 Updates
Positive Updates
Exceeded Guidance in Adjusted Net Sales and EBITDA
TreeHouse Foods achieved adjusted net sales and adjusted EBITDA results that exceeded the upper end of their guidance ranges for the second quarter of 2025.
Strong Performance in Certain Segments
The company's adjusted net sales were up 1.4% year-over-year, and adjusted EBITDA was $73.3 million, up about 4% year-over-year. This demonstrates the success of their margin improvement plan.
Operational Improvements and Cost Savings
$10.6 million benefit in operations and supply chain was achieved through supply chain cost savings and improved operational execution.
Strategic Acquisitions
The acquisition of Harris Tea added a benefit of almost 5% to net sales, contributing positively to the company's performance.
Commitment to Supply Chain Savings
The company is taking actions to deliver its commitment of $250 million of gross supply chain savings through 2027.
Negative Updates
Decline in Volume and Mix
There was a decline in volume and mix due to planned margin management actions, slower takeaway, and service impacts from the Griddle facility restoration.
Commodity Inflation and Pricing Challenges
Pricing net of commodities (PNOC) was a drag of $9.7 million year-over-year, driven by higher costs due to commodity inflation.
Griddle and Broth Production Issues
Net sales were negatively impacted by Griddle recall-related returns and service issues in the broth category, affecting performance.
Volume Decline Expected to Continue
Company volume and mix are expected to decline approximately 1% year-over-year, reflecting ongoing challenges.
Plant Closures
The company decided to close two plants to rightsize their network within the pickles and cookies businesses.
Company Guidance
In the second quarter of 2025, TreeHouse Foods reported adjusted net sales and adjusted EBITDA that exceeded the upper end of their guidance ranges, indicating successful execution of their margin improvement plan. Adjusted net sales grew by 1.4% year-over-year, while adjusted EBITDA improved by 4% to $73.3 million, raising the adjusted EBITDA margin by 20 basis points to 9.1%. The company anticipates full-year adjusted net sales to range between $3.36 billion and $3.415 billion, with an expected adjusted EBITDA of $345 million to $375 million. They also project free cash flow of at least $130 million. Despite challenges from macroeconomic factors and competitive pressures, TreeHouse Foods remains focused on cost reduction, supply chain optimization, and strategic investments, such as their acquisition of Harris Tea, to enhance profitability and cash flow. Looking ahead, the third quarter adjusted net sales are expected to range from $840 million to $870 million, with an adjusted EBITDA forecast between $90 million and $110 million.TreeHouse Foods Financial Statement Overview
Summary
TreeHouse Foods shows a balanced financial profile with stable revenue and operational cash flow, albeit with low net profitability and higher leverage. Continued focus on improving profit margins and managing debt could enhance financial stability and growth prospects.Income Statement
TreeHouse Foods demonstrated stable revenue generation with a slight decline in recent years. The gross profit margin for the TTM (Trailing-Twelve-Months) was 16.87%, indicating a moderate level of profitability. The net profit margin was relatively low at 0.62%, reflecting limited net income in comparison to revenue. EBIT and EBITDA margins for TTM were 4.02% and 6.60%, respectively, suggesting operational challenges but some resilience in earnings before interest, taxes, depreciation, and amortization.70
Positive
Balance Sheet
The company's balance sheet indicates a moderate level of leverage with a debt-to-equity ratio of 1.08. The return on equity (ROE) for TTM stands at 1.35%, suggesting low returns on shareholders' equity. The equity ratio is 37.71%, denoting a reasonable proportion of equity financing. However, the overall financial stability is challenged by substantial debt levels.65
Positive
Cash Flow
Operating cash flow is strong compared to net income, with an operating cash flow to net income ratio of 11.50 for TTM, indicating efficient cash generation from operations. The free cash flow shows growth, although it remains modest. Free cash flow to net income ratio of 4.58 suggests positive cash retention after capital expenditures.72
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 3.33B | 3.35B | 3.43B | 3.30B | 2.81B | 4.35B |
| Gross Profit | 562.50M | 548.40M | 576.10M | 522.40M | 471.60M | 802.20M |
| EBITDA | 251.60M | 243.60M | 300.10M | 210.60M | 129.30M | 325.10M |
| Net Income | 20.60M | 26.90M | 53.10M | -146.30M | -12.50M | 13.80M |
Balance Sheet | ||||||
| Total Assets | 4.04B | 3.98B | 4.11B | 4.25B | 5.21B | 5.49B |
| Cash, Cash Equivalents and Short-Term Investments | 17.10M | 289.60M | 320.30M | 43.00M | 304.50M | 364.60M |
| Total Debt | 1.65B | 1.57B | 1.60B | 1.59B | 2.06B | 2.39B |
| Total Liabilities | 2.52B | 2.43B | 2.44B | 2.57B | 3.36B | 3.62B |
| Stockholders Equity | 1.53B | 1.55B | 1.66B | 1.69B | 1.85B | 1.86B |
Cash Flow | ||||||
| Free Cash Flow | 94.30M | 126.10M | 16.50M | -245.50M | 209.00M | 311.00M |
| Operating Cash Flow | 236.90M | 265.80M | 157.30M | -150.70M | 324.90M | 416.70M |
| Investing Cash Flow | -347.10M | -138.30M | 226.70M | 412.00M | -16.80M | -332.40M |
| Financing Cash Flow | 22.80M | -159.30M | -107.50M | -522.70M | -362.30M | 74.00M |
TreeHouse Foods Technical Analysis
Negative
17.38
Price Trends
18.92
Negative
20.36
Negative
25.50
Negative
Market Momentum
-0.46
Positive
41.80
Neutral
20.28
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 17.38 is below the 20-day moving average (MA) of 17.94, below the 50-day MA of 18.92, and below the 200-day MA of 25.50, indicating a bearish trend. The MACD of -0.46 indicates Positive momentum. The RSI at 41.80 is Neutral, neither overbought nor oversold. The STOCH value of 20.28 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 (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | 5.62B | 9.91 | 21.28% | 2.29% | -1.19% | 78.79% | |
72 Outperform | 711.13M | 16.53 | 6.74% | ― | 7.30% | -13.73% | |
71 Outperform | 8.85B | 7.72 | 12.90% | 7.55% | -3.64% | 231.77% | |
61 Neutral | $877.69M | 44.42 | 1.34% | ― | -1.52% | ― | |
59 Neutral | 1.81B | 62.14 | 2.27% | 2.00% | -0.09% | 316.21% | |
57 Neutral | 1.99B | 57.27 | 9.86% | 2.85% | -4.30% | -70.31% | |
62 Neutral | $20.33B | 14.63 | -3.31% | 3.23% | 1.93% | -12.26% |
* Consumer Defensive Sector Average
Performance Comparison
THS
TreeHouse Foods
17.38
-24.19
-58.19%
BGS
B&G Foods
4.64
-3.37
-42.07%
JJSF
J & J Snack Foods
100.00
-64.95
-39.38%
SENEA
Seneca Foods
103.05
41.45
67.29%
STKL
SunOpta
6.23
-0.52
-7.70%
HAIN
Hain Celestial
1.53
-6.04
-79.79%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.