Earlier this week TreeHouse Foods, Inc. reported results for the fourth quarter and full year ended December 31, 2022.

Steve Oakland, TreeHouse Foods Chief Executive Officer and President, said, “I’m incredibly proud to have closed out 2022 as a more focused company, operating in faster growing, more profitable categories. Today, we are better positioned to capitalize on the strong market dynamics in private label snacking & beverages. The macro-environment continues to support a clear consumer shift toward value, as demonstrated by private label unit share gains for 54 consecutive weeks in the categories in which we operate. Importantly, in the fourth quarter, we outperformed the broader private label market in retail measured channels by more than 300 basis points, demonstrating the significant efforts our teams are putting forth to improve service and deliver for our customers.”

“We continue to work diligently to drive growth and profitability, and in the fourth quarter, we demonstrated those efforts are paying off – we delivered sequential profit improvement and increased service by more than 100 basis points,” said Patrick O’Donnell, Interim Chief Financial Officer and Chief Accounting Officer. “In 2023, we will build on this momentum as our pricing actions to recover inflation and our focus on service will drive the top-line and consistent execution will expand profitability, in turn driving shareholder value.”

Mr. Oakland continued, “Our near-term priorities continue to be on increasing service levels and mitigating supply chain disruption so that we can better capture the robust demand for our products and drive growth for our customers. Our purpose – to engage and delight, one customer at a time – is supported by our work to refine our enterprise strategy around four key pillars: world-class supply chain; category leadership; strategic customer partnerships; and talent leader. We are energized and excited about our future as a private label snacking and beverages leader, and it is reflected in our strong outlook for 2023.”

OUTLOOK

TreeHouse issued the following outlook and guidance for fiscal year 2023:

• The Company assumes that the macro environment will continue to be net inflationary. TreeHouse is recovering higher input costs through targeted pricing actions.
• Net sales growth of 6% – 8% year-over-year, driven by pricing. The year-over-year pricing contribution is expected to be most impactful in the first half of the year. Volume is assumed to be flat for the full year, as the Company continues to mitigate supply chain disruption and improve service.
• Adjusted EBITDA from continuing operations of $345 to $365 million, up approximately 24% year-over-year at the midpoint. EBITDA margins are expected to improve on a year-over-year basis each quarter, driven by 2022 pricing actions to recover inflation and continued supply chain recovery.
• Net interest expense of $20 to $25 million, which includes interest expense of $65 to $70 million and interest income of approximately $45 million related to the note receivable.
• Capital expenditures of approximately $130 million.

In regard to the first quarter, TreeHouse anticipates year-over-year net sales growth between 9% – 12% driven by pricing actions to recover inflation, and a 300 – 450 basis point year-over-year improvement in adjusted EBITDA margin from continuing operations.

In addition, TreeHouse introduced the following annual growth targets expected over 3+ years beginning in 2024:

• Net sales growth of 3% to 5%, in-line with the historical private label growth rates of the Company’s snacking & beverage categories;
• Adjusted EBITDA growth of 8% to 10%; and
• Annual free cash flow of at least $200 million.