Things to Know Ahead of TreeHouse Foods (THS) Q2 Earnings

TreeHouse Foods, Inc. THS is scheduled to release second-quarter 2020 results on Aug 6. The company delivered an earnings surprise of 15.6% in the last reported quarter. Further, it outperformed the Zacks Consensus Estimate by 8.5%, on average, in the trailing four quarters.

The Zacks Consensus Estimate for second-quarter earnings has gone up by a penny in the past seven days to 47 cents per share. This also suggests 30.6% growth from 36 cents reported in the year-ago quarter. However, the consensus mark for revenues stands at $1,069 million, indicating a decline of 14.5% from the year-ago period’s reported figure.

Key Factors to Note

TreeHouse Foods has been one among the food companies that have benefited from the rising demand owing to the increased at-home consumption and stockpiling trends on the coronavirus outbreak. The company has also been gaining on its TreeHouse 2020 program and the focus on refining the portfolio.

On the lastearnings call management expected the rise in demand due to pantry hoarding and increased stay-at-home trends to continue in second-quarter 2020. It predicted net sales of $1.05-$1.09 billion, indicating growth of 4% at the midpoint from the year-ago reported figure on anticipation of increased demand and greater at-home consumption. Further, management expects adjusted earnings from continuing operations of 40-50 cents, suggesting a 13% increase at the midpoint from the year-ago reported figure.

TreeHouse Foods, Inc. Price and EPS Surprise


TreeHouse Foods, Inc. Price and EPS Surprise

TreeHouse Foods, Inc. price-eps-surprise | TreeHouse Foods, Inc. Quote

However, it is expected to have incurred incremental costs to cater to the rising demand. The company has been witnessing higher costs to increase production shifts and ensure the availability of labor at all manufacturing and distribution facilities. Also, costs related to increased sanitization measures and protective equipment are expected to have affected margins.

Moreover, increased stay-at-home trends have dented the Food Away From Home business, which is anticipated to have continued in the second quarter. Also, competition from private label brands is concerning.

What the Zacks Model Unveils

Our proven model predicts an earnings beat for TreeHouse Foods this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

TreeHouse Foods has a Zacks Rank #2 and an Earnings ESP of +4.63%.

Other Stocks With Favorable Combinations

Here are some more companies you may want to consider, as our model shows that these too have the right combination of elements to post an earnings beat.

Flowers Foods, Inc. FLO presently has an Earnings ESP of +4.49% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Medifast, Inc. MED currently has an Earnings ESP of +2.53% and a Zacks Rank #2.

Conagra Brands Inc. CAG has an Earnings ESP of +0.19% and a Zacks Rank #3 at present.

Biggest Tech Breakthrough in a Generation

Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.

A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.

See 8 breakthrough stocks now>>

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
Conagra Brands Inc. (CAG): Free Stock Analysis Report
TreeHouse Foods, Inc. (THS): Free Stock Analysis Report
Flowers Foods, Inc. (FLO): Free Stock Analysis Report
MEDIFAST INC (MED): Free Stock Analysis Report
To read this article on click here.
Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

More Related Articles

Sign up for Smart Investing to get the latest news, strategies and tips to help you invest smarter.