TreeHouse Foods’ first quarter results were met with a negative market reaction, as investors responded to ongoing volume declines and a dynamic operating environment. Management attributed the year-over-year sales drop to deliberate margin management actions, supply disruptions from the frozen griddle facility, and broad consumer caution impacting private label purchases. CEO Steve Oakland described the company’s approach as “focused on controlling what we can control,” highlighting continued discipline in prioritizing profitability and cash flow over unprofitable volume. Operational improvements and cost reduction efforts were noted as partial offsets, but the company acknowledged the impact of exiting certain low-margin businesses and the lingering effects of last year’s griddle recall.
Is now the time to buy THS? Find out in our full research report (it’s free).
TreeHouse Foods (THS) Q1 CY2025 Highlights:
- Revenue: $792 million vs analyst estimates of $789.6 million (3.6% year-on-year decline, in line)
- Adjusted EPS: $0.03 vs analyst estimates of -$0.16 (significant beat)
- Adjusted EBITDA: $57.5 million vs analyst estimates of $48.46 million (7.3% margin, 18.7% beat)
- The company reconfirmed its revenue guidance for the full year of $3.37 billion at the midpoint
- EBITDA guidance for the full year is $360 million at the midpoint, above analyst estimates of $357 million
- Operating Margin: -0.7%, in line with the same quarter last year
- Organic Revenue fell 3.5% year on year (-7.7% in the same quarter last year)
- Sales Volumes fell 8.3% year on year (3.8% in the same quarter last year)
- Market Capitalization: $986.8 million
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions TreeHouse Foods’s Q1 Earnings Call
- Jon Andersen (William Blair) asked how TreeHouse is factoring broader macro uncertainty and private label demand into guidance. CEO Steve Oakland said guidance assumes no improvement, so any consumer shift to private label would be upside.
- Jon Andersen (William Blair) followed up on margin management’s impact on volumes for the rest of the year. CFO Patrick O’Donnell explained that full-year organic volume is expected to decline about 1%, with Harris Tea offset by business exits and the griddle recall.
- Jim Salera (Stephens, Inc.) questioned whether TreeHouse’s decision not to pursue certain business was driven by retailers pushing for lower prices. Oakland clarified it was more about TreeHouse streamlining its assortment for efficiency, not retailer pricing pressure.
- Scott Marks (Jefferies) asked about pressure in snacking categories and the outlook for improvement in the second half. O’Donnell noted tough comparisons early in the year but expects seasonal improvement and recovery from supply disruptions.
- William Reuter (Bank of America) inquired about the pace of griddle facility recovery and leverage targets. Oakland said all lines are running and expects second-half benefits, while O’Donnell confirmed leverage targets remain unchanged and capital allocation will be revisited later in the year.
Catalysts in Upcoming Quarters
In coming quarters, our analysts will monitor (1) the volume recovery and revenue impact from a fully restored griddle facility, (2) the company’s ability to maintain or expand margins through continued cost discipline and selective product mix, and (3) the pace of integration and performance of the Harris Tea acquisition. Shifts in consumer demand for private label and changes in tariff policies will also be important variables to watch.
TreeHouse Foods currently trades at $19.78, down from $23.41 just before the earnings. In the wake of this quarter, is it a buy or sell? The answer lies in our full research report (it’s free).
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