In a release dated August 8th TreeHouse Foods Inc. (THS) posted results for the second quarter of fiscal 2022. This company is a manufacturer of private label products for supermarket chains and is impacted by inflation in ingredient, labor and packaging costs. Both operating segments face pressure from customers to hold prices thereby reducing margins.
For the period ending June 30th, 2022 the company lost $29.4 million on net revenue of $1,198 million. Comparable values for the second quarter of FY 2021 ending June 30th comprised net income of $8.4 million on net sales of $1,003 million. Diluted EPS fell from $0.15 in the second quarter of 2021 to $(0.53) for the most recent quarter.
The Meal Preparation Segment posted revenue of $765 million up 18.8 percent from Q2 of 2021 and contributed $56 million to operating income. The Snacking and Beverage Segment posted revenue of $431 million up 21.7 percent from Q2 of 2021 and contributed $39 million to operating income.
In commenting on results Steve Oakland, CEO and President stated "I'm incredibly proud of our TreeHouse team as we delivered strong top-line results, reflecting the impact of our pricing and our ability to capture incremental volume in Snacking & Beverages," He added "The value proposition of private label is becoming increasingly important as consumers navigate this inflationary environment. In addition, the breadth of the retail landscape, improved quality and assortment, and our customers' strategic commitment to private label are driving trial and share gains. Our unwavering focus on the customer over the last several years positions us well to build on this momentum to drive growth and profitability."
Patrick O'Donnell, Interim Chief Financial Officer and Chief Accounting Officer opined on the results stating, "Our second quarter performance was very much in line with expectations. We are encouraged by robust demand for private label food and beverage and we are working diligently to improve service and execute pricing to recover inflation. Despite ongoing challenges related to labor and materials availability, we continue to make gradual progress toward improving profitability and believe we are on track to deliver our full-year guidance."
On August 11th Treehouse announced sale of most of the Meal Preparation segment to the Investindustrial Group in a $950 million transaction. The objective of the sale was to "simplify the business" according to the CEO, allowing greater concentration on manufacture of house brands.
On June 30th 2022 TreeHouse posted total assets of $5,267 million of which $2,702 million comprised goodwill and intangibles. The company carries $2,050 million in long-term debt and lease obligations. TreeHouse had a market capitalization of $2,480 million on August 10th. The share has traded in a 52-week range of $29.47 to $47.50 with a 50-day moving average of $42.23. On a trailing 12-month basis, operating margin was 2.1 percent and profit margin -1.2 percent. The Company generated a return on assets of 1.2 percent and -3.0 percent on equity. THT closed on Friday 5thAugust at $42.71 and opened post-release on Monday 10th August at $45.69.