Loading...
•
Jun 30, 2020
TreeHouse Q2 2020 Earnings Report
TreeHouse Foods reported results, with adjusted EPS exceeding expectations and raised full year guidance.
Key Takeaways
TreeHouse Foods reported a 1.6% increase in net sales for the second quarter of 2020, driven by increased retail demand due to the COVID-19 pandemic. Adjusted EPS was $0.58, up 45% year-over-year, and the company raised its full year guidance for adjusted EPS to $2.55-$2.75.
Second quarter adjusted EPS increased by 45% to $0.58, driven by improved operational throughput.
Net sales increased by 1.6% to $1,041.9 million compared to the same period last year.
Organic net sales increased by 3.7% due to increased retail demand from the COVID-19 pandemic.
Full year 2020 guidance for adjusted EPS was raised to $2.55 - $2.75 per diluted share.
TreeHouse
TreeHouse
Forward Guidance
TreeHouse raised its full year 2020 guidance for adjusted earnings from continuing operations to $2.55 to $2.75 per diluted share. The Company now expects 2020 revenue to be at the upper end of its original guidance of $4.10 to $4.40 billion. Free cash flow is also expected to be at the upper end of the guidance range of $250 to $300 million.
Positive Outlook
- Adjusted earnings per diluted share from continuing operations of $0.55 to $0.65, up approximately 9% year-over-year at the midpoint
- Net sales between $1.04 to $1.08 billion, approximately flat year-over-year at the midpoint on a reported basis, and up approximately 2% on an organic basis
- Adjusted EBITDA from continuing operations of $112 to $127 million, up approximately 6% year-over-year at the midpoint
- Revenue will remain strong
- Company feels comfortable in raising its full-year adjusted EPS guidance range
Challenges Ahead
- The Company is not able to reconcile prospective adjusted earnings per diluted share from continuing operations and prospective adjusted EBITDA (Non-GAAP) to the most comparable GAAP financial measure without unreasonable effort due to the inherent uncertainty and difficulty of predicting the occurrence, financial impact, and timing of certain items impacting GAAP results.
- These items include, but are not limited to, mark-to-market adjustments of derivative contracts, foreign currency exchange on the re-measurement of intercompany notes, or other non-recurring events or transactions that may significantly affect reported GAAP results.
- Outlook for the balance of the year takes into account higher costs to implement and maintain heightened COVID-19 safety measures.
- Macro uncertainty remains in the second half of the year
- There exists uncertainty around the nature, timing and magnitude of changes in future sales and earnings attributable to the spread of COVID-19 in North America.