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Shares of TreeHouse Foods Inc.(NYSE: THS) were falling today after the private-label food and beverage supplier reported third-quarter earnings, cut its profit forecast, and said it would close a plant. As of 11:10 a.m. EDT, the stock was off 20.4%.
It was an all-around ugly quarter for TreeHouse, whose adjusted earnings per share fell from $0.86 a year ago to $0.70, missing estimates of $0.77. Revenue increased by 98.7%, to $1.59 billion, thanks to its acquisition earlier this year ofConAgra's private-label business, but that figure was also short of expectations of $1.64 billion. While its retail grocery segment saw a volume increase of 2.8%, volume sales fell by 3.7% at food away from home and 7.1% in industrial and export.
CEO Sam Reed noted the discrepancy, saying that private brands fell short of expectations. Separately, the company revealed a new CFO and said it would close a Canadian facility in 2018 and downsize one in Michigan.
The company's guidance was uninspiring as it said it would lower its full-year forecast due to continuing weakness in the private-brands segment. CEO Sam Reed said he believes "this is a short-term situation" and said the company's go-to-market sales structure should help restore it to original expectations. Management now expects full-year EPS of $2.80-$2.85, well below the analyst consensus at $3.07.
The results above seem to indicate that TreeHouse is struggling to integrate the ConAgra acquisition. While it should eventually return to growth, today's plunge is well deserved.
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