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Factors to Watch Before TreeHouse Foods' (THS) Q2 Earnings
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TreeHouse Foods, Inc. (THS - Free Report) is likely to register a top and bottom-line decline when it reports second-quarter 2024 earnings on Aug 5. The Zacks Consensus Estimate for revenues is pegged at $783.7 billion, which indicates a 7.1% decrease from the year-ago period.
The consensus mark for earnings has remained unchanged in the past 30 days at 13 cents per share, which suggests a decline of 69.1% from the year-ago quarter’s figure. THS has a trailing four-quarter negative earnings surprise of 4.5%, on average.
Factors to Note
TreeHouse Foods has been battling supply-chain headwinds for a while now. In the second quarter of 2024, operations and supply-chain-related challenges served as a headwind of $8 million, mainly due to increased labor costs and the broth facility restart effect. Supply-chain hurdles associated with the broth facility also affected the gross margin. Considering the company's commodity basket and the trends observed so far this year, certain input costs have remained inflationary. THS expects modest overall inflation across its basket for the full year, per its last earnings call. These factors raise concerns for the quarter under review.
TreeHouse Foods, Inc. Price, Consensus and EPS Surprise
TreeHouse Foods’ view for the second quarter of 2024 suggests a decline from the year-ago period. For the second quarter, TreeHouse Foods anticipates net sales between $770 million and $800 million, implying a roughly 2% decline at the midpoint but showing improvement compared to the first quarter. This drop from the previous year is attributed to the organic volume mix, particularly due to planned downtime at the broth facility. However, the slight decline in pricing is expected to be offset by a positive contribution from acquisition volumes, mainly related to coffee.
Adjusted EBITDA for the second quarter is projected to fall between $55 million and $65 million compared with adjusted EBITDA from continuing operations of $76.4 million recorded in the second quarter of 2023. Challenges such as the restart of the broth facility affecting the volume and mix, along with the lag in pricing adjustments to counter cocoa inflation, are likely to have served as headwinds in the second quarter of 2024.
However, consistent market share gains that private brands have achieved over the past two decades indicate substantial growth opportunities. Additionally, THS has been committed to implementing the TreeHouse Management Operating System and other supply-chain initiatives aimed at enhancing execution, margin performance and enriching ties with customers. These factors, along with strength in categories like cookies, coffee, pickles and pretzels, are likely to have offered respite in the quarter under review.
What the Zacks Model Unveils
Our proven model doesn’t conclusively predict an earnings beat for TreeHouse Foods this time. 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, which is not the case here.
Though TreeHouse Foods currently sports a Zacks Rank #1, it has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks With the Favorable Combination
Here are three companies worth considering, as our model shows that these have the correct combination to beat on earnings this time:
The company is likely to register a decline in the top line and an increase in the bottom line when it reports second-quarter 2024 numbers. The Zacks Consensus Estimate for International Flavors’ quarterly revenues is pegged at $2.82 billion, which indicates a decrease of 3.6% from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for International Flavors’ quarterly earnings of 91 cents suggests an increase of 5.8% from the year-ago quarter’s levels. IFF has a trailing four-quarter earnings surprise of 6.5%, on average.
Clorox (CLX - Free Report) currently has an Earnings ESP of +1.20% and a Zacks Rank of 3. The company is likely to register a top and bottom-line decline when it reports fourth-quarter fiscal 2024 numbers. The Zacks Consensus Estimate for Clorox’s quarterly revenues is pegged at $1.97 billion, which calls for a decrease of 2.4% from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for Clorox’s quarterly earnings of $1.54 implies a drop of 7.8% from the year-ago quarter’s levels. However, CLX has a trailing four-quarter earnings surprise of 128.5%, on average.
Coty (COTY - Free Report) has an Earnings ESP of +22.73% and a Zacks Rank of 3 at present. The company is expected to register top and bottom-line growth when it reports fourth-quarter fiscal 2024 numbers. The Zacks Consensus Estimate for COTY’s quarterly earnings has remained unchanged in the past 30 days at 5 cents per share. The consensus mark for earnings indicates a 400% surge from the figure reported in the year-ago quarter.
The consensus estimate for quarterly revenues is pegged at $1.38 billion, which suggests a rise of 1.8% from the figure reported in the year-ago quarter. COTY delivered a trailing four-quarter average negative earnings surprise of 22.2%.
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Factors to Watch Before TreeHouse Foods' (THS) Q2 Earnings
TreeHouse Foods, Inc. (THS - Free Report) is likely to register a top and bottom-line decline when it reports second-quarter 2024 earnings on Aug 5. The Zacks Consensus Estimate for revenues is pegged at $783.7 billion, which indicates a 7.1% decrease from the year-ago period.
The consensus mark for earnings has remained unchanged in the past 30 days at 13 cents per share, which suggests a decline of 69.1% from the year-ago quarter’s figure. THS has a trailing four-quarter negative earnings surprise of 4.5%, on average.
Factors to Note
TreeHouse Foods has been battling supply-chain headwinds for a while now. In the second quarter of 2024, operations and supply-chain-related challenges served as a headwind of $8 million, mainly due to increased labor costs and the broth facility restart effect. Supply-chain hurdles associated with the broth facility also affected the gross margin. Considering the company's commodity basket and the trends observed so far this year, certain input costs have remained inflationary. THS expects modest overall inflation across its basket for the full year, per its last earnings call. These factors raise concerns for the quarter under review.
TreeHouse Foods, Inc. Price, Consensus and EPS Surprise
TreeHouse Foods, Inc. price-consensus-eps-surprise-chart | TreeHouse Foods, Inc. Quote
TreeHouse Foods’ view for the second quarter of 2024 suggests a decline from the year-ago period. For the second quarter, TreeHouse Foods anticipates net sales between $770 million and $800 million, implying a roughly 2% decline at the midpoint but showing improvement compared to the first quarter. This drop from the previous year is attributed to the organic volume mix, particularly due to planned downtime at the broth facility. However, the slight decline in pricing is expected to be offset by a positive contribution from acquisition volumes, mainly related to coffee.
Adjusted EBITDA for the second quarter is projected to fall between $55 million and $65 million compared with adjusted EBITDA from continuing operations of $76.4 million recorded in the second quarter of 2023. Challenges such as the restart of the broth facility affecting the volume and mix, along with the lag in pricing adjustments to counter cocoa inflation, are likely to have served as headwinds in the second quarter of 2024.
However, consistent market share gains that private brands have achieved over the past two decades indicate substantial growth opportunities. Additionally, THS has been committed to implementing the TreeHouse Management Operating System and other supply-chain initiatives aimed at enhancing execution, margin performance and enriching ties with customers. These factors, along with strength in categories like cookies, coffee, pickles and pretzels, are likely to have offered respite in the quarter under review.
What the Zacks Model Unveils
Our proven model doesn’t conclusively predict an earnings beat for TreeHouse Foods this time. 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, which is not the case here.
Though TreeHouse Foods currently sports a Zacks Rank #1, it has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks With the Favorable Combination
Here are three companies worth considering, as our model shows that these have the correct combination to beat on earnings this time:
International Flavors & Fragrances Inc. (IFF - Free Report) currently has an Earnings ESP of +21.04% and a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.
The company is likely to register a decline in the top line and an increase in the bottom line when it reports second-quarter 2024 numbers. The Zacks Consensus Estimate for International Flavors’ quarterly revenues is pegged at $2.82 billion, which indicates a decrease of 3.6% from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for International Flavors’ quarterly earnings of 91 cents suggests an increase of 5.8% from the year-ago quarter’s levels. IFF has a trailing four-quarter earnings surprise of 6.5%, on average.
Clorox (CLX - Free Report) currently has an Earnings ESP of +1.20% and a Zacks Rank of 3. The company is likely to register a top and bottom-line decline when it reports fourth-quarter fiscal 2024 numbers. The Zacks Consensus Estimate for Clorox’s quarterly revenues is pegged at $1.97 billion, which calls for a decrease of 2.4% from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for Clorox’s quarterly earnings of $1.54 implies a drop of 7.8% from the year-ago quarter’s levels. However, CLX has a trailing four-quarter earnings surprise of 128.5%, on average.
Coty (COTY - Free Report) has an Earnings ESP of +22.73% and a Zacks Rank of 3 at present. The company is expected to register top and bottom-line growth when it reports fourth-quarter fiscal 2024 numbers. The Zacks Consensus Estimate for COTY’s quarterly earnings has remained unchanged in the past 30 days at 5 cents per share. The consensus mark for earnings indicates a 400% surge from the figure reported in the year-ago quarter.
The consensus estimate for quarterly revenues is pegged at $1.38 billion, which suggests a rise of 1.8% from the figure reported in the year-ago quarter. COTY delivered a trailing four-quarter average negative earnings surprise of 22.2%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.