Private Brand manufacturer TreeHouse Foods said on Monday during its Third Quarter 2021 Earnings Call that it was “Exploring Strategic Alternatives” including a sale of the company or divestment of a unit, months after hedge-fund activist investor Jana Partners pushed for changes saying the manufacturer was undervalued.

TreeHouse Foods reported third-quarter GAAP earnings per diluted share from continuing operations of $0.12 compared to earnings of $0.20 for the third quarter of 2020. Adjusted earnings per diluted share from continuing operations¹ was $0.46 in the third quarter of 2021 compared to $0.71 in the third quarter of 2020.

“Building on the improvements we have made over the past several years to enhance execution, we continue to make purposeful decisions to fulfill orders and partner with our customers to keep their shelves stocked during this period of unprecedented supply chain disruption,” said Steve Oakland, Chief Executive Officer and President. “In the quarter, our intense focus on high levels of service enabled us to outperform private label in seven of our ten largest categories. We are encouraged by strengthening demand for our products. As expected, the pricing actions we took earlier this year are being reflected in our results. While it will be more costly to fulfill our customers’ orders in the near term and impact our profitability, we believe it is the right choice, and one that will strengthen our customer relationships and drive performance over time.”

Mr. Oakland continued, “As the Board explores strategic alternatives to maximize value, we remain committed to serving our customers, enhancing the efficiency and resiliency of our supply chain and operations and driving growth, cash generation and value.”

“Our third-quarter results were in line with our expectations,” said Bill Kelley, EVP and Chief Financial Officer. “Importantly, as anticipated, our pricing actions to recover our first half of the year inflation estimates are beginning to be reflected in our results, with pricing accounting for three percentage points of the 5.3% year-over-year net sales growth in the third quarter. Third-quarter gross profit margin declined primarily due to the escalation in industry-wide inflation and supply chain disruption, and was partially offset by lower selling, general and administrative expenses and favorable interest expense. We continue to work diligently to mitigate supply chain disruption, and we are confident that we are implementing the necessary pricing actions to recover higher input costs over the inflationary cycle.”

Key Takeaways from the Third Quarter 2021 Earnings Call

• TreeHouse Board Has Approved a Plan to Explore Strategic Alternatives
• We Remain Focused on Supporting Our Customers
• Pricing to Offset Inflationary Pressures Has Been Collaborative With Our Customers
• Demand is Strengthening and We Are Outperforming the Market
• Long‐Term Consumer Demand Trends and Fundamentals of Our Underlying Business Are Strong
• We are Fulfilling As Much Demand As We Can Despite a Significant Near‐Term Impact on Profitability