TreeHouse Foods, Inc. reported a challenging financial performance for the third quarter and the nine months ended September 30, 2024, compared to the same periods in 2023. Net sales for Q3 2024 were $839.1 million, a decrease of $24.2 million (2.8%) from $863.3 million in Q3 2023. For the nine months, net sales totaled $2,448.3 million, down $72.5 million (2.9%) from $2,520.8 million in the prior year. The decline in sales was attributed to a voluntary recall of frozen griddle products and unfavorable volume/mix performance, exacerbated by Hurricane Helene, which cost the company an estimated $5 million to $10 million.

Gross profit for Q3 2024 was $131.2 million, representing 15.6% of net sales, down from $137.5 million (15.9%) in Q3 2023. For the nine months, gross profit decreased to $371.5 million (15.2% of net sales) from $424.3 million (16.8%) in the same period last year. The decline in gross profit was primarily due to the impact of the recall, which reduced gross profit margins by 3.2 percentage points.

Operating income for Q3 2024 was $31.8 million, slightly up from $33.6 million in Q3 2023. However, for the nine months, operating income plummeted to $22.6 million from $104.8 million, a decrease of $82.2 million (78.4%). The net loss from continuing operations for Q3 2024 was $(3.4) million, compared to a profit of $9.8 million in Q3 2023. For the nine months, the net loss from continuing operations was $(31.8) million, a stark contrast to the $52.6 million profit in the same period last year.

TreeHouse Foods undertook several strategic initiatives, including the exit from the ready-to-drink (RTD) business, which is expected to incur approximately $6.0 million in decommissioning costs. The company also closed facilities in Dallas and Sioux Falls, with total expected costs for these closures estimated at $14.0 million. Additionally, TreeHouse Foods made acquisitions, including pickle branded assets for $25.9 million and a coffee business for $90.6 million, funded through its revolving credit facility.

The company faced significant challenges, including inflationary pressures and rising interest rates, which have negatively impacted food and beverage consumption trends. Despite these challenges, TreeHouse Foods reported an increase in adjusted EBITDA for Q3 2024 to $102.5 million, up from $89.9 million in Q3 2023, indicating some operational efficiencies were achieved amidst the difficulties.