TreeHouse Foods Inc.
) earnings per share of 84 cents in the second quarter fiscal 2014
surpassed the Zacks Consensus Estimate by a penny. Results also
went up 29.2% from the year-ago level backed by higher sales and
margins during the quarter.
Treehouse Foods, Inc - Earnings Surprise |
Net sales went up 19.3% to $628.0 million backed by strong sales
in all the segments. Sales benefited from the company's private
label strategy and varied portfolio of products and services.
Sales, however, missed the Zacks Consensus Estimate by 2.4%.
Although cost of sales went up 18.1% gross profit increased
23.8% year over year to $135.7 million due to higher sales,
improved sales mix and operational efficiencies. Despite a 33%
increase in operating expense, operating income went up 8.8% to
North American Retail Grocery
segment, net sales went up 18.2% to $444.2 million backed by
benefits from acquisitions and higher volume/mix, partly offset by
unfavorable foreign exchange. Strong sales growth in pickles, salad
dressings and beverages along with triple-digit year-over-year
growth in the company's single serve coffee business drove sales in
the retail grocery segment. Operating income margin inflated 20
basis points (bps) on the back of higher volume of higher-margin
products, specifically single-serve hot beverages and cost savings
from operating efficiencies.
Food Away From Home
segment, net sales increased 13.6% to $97.3 million backed by
higher volume. Operating margin decreased 160 bps to 12.4% due to
lower margin sales from the Cains Foods and Associated Brands
acquisitions and unfavorable foreign exchange movements.
segment, net sales increased 33.1% to $86.4 million backed by
favorable volume/mix and benefits from recent acquisitions.
Reported Operating margin decreased 520 bps to 15.6% due to
acquisition and integration costs that increased cost of sales.
TreeHouse Foods raised its fiscal 2014 guidance to a range of
$3.60 to $3.75 from $3.50 to $3.60. The increased guidance reflects
benefits from the recently acquired Flagstone Foods and Protenergy
The company acquired Protenergy Natural Foods for approximately
$150 million (CAD $170 million), which was completed on May 30.
Protenergy Natural Foods is an industry leading developer and
manufacturer of premium quality food and beverage products. The
acquisition added items such as soups, broths and gravies to
Again, in July, TreeHouse acquired Flagstone Foods - a
Minneapolis-based distributor of dried fruits and nuts - from
Gryphon Investors and other shareholders for $860 million in
TreeHouse carries a Zacks Rank #1 (Strong Buy). Other stocks
that are also performing well in the sector include Pinnacle Foods
), J&J Snack Foods Corporation (
) and Senomyx Inc. (
). All the stocks carry a Zacks Rank #2 (Buy).
Want the latest recommendations from Zacks Investment Research?
Today, you can download 7 Best Stocks for the Next 30 Days.
Click to get this free report
J&J SNACK FOODS (JJSF): Free Stock Analysis
PINNACLE FOODS (PF): Free Stock Analysis Report
TREEHOUSE FOODS (THS): Free Stock Analysis
SENOMYX INC (SNMX): Free Stock Analysis Report
To read this article on Zacks.com click here.