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TreeHouse Foods (THS) Queued for Q1 Earnings: What's in Store?

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·3 min read
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  • THS
  • MNST
  • TSN

TreeHouse Foods, Inc. THS is likely to register growth in the top line, when it reports first-quarter 2021 numbers on May 6. The Zacks Consensus Estimate for revenues is pegged at almost $1.1 billion, which indicates an increase of 0.3% from the prior-year quarter’s reported figure

The company expects the bottom line to decline from the year-ago quarter’s reported figure. The Zacks Consensus Estimate for first-quarter earnings is unchanged in the past 30 days at 35 cents per share, projecting a decline of 5.4%. TreeHouse Foods has a trailing four-quarter earnings surprise of 14.1%, on average. Further, it outperformed the Zacks Consensus Estimate by 0.9% in the last reported quarter.

TreeHouse Foods, Inc. Price and EPS Surprise

TreeHouse Foods, Inc. Price and EPS Surprise
TreeHouse Foods, Inc. Price and EPS Surprise

TreeHouse Foods, Inc. price-eps-surprise | TreeHouse Foods, Inc. Quote

Key Factors to Note

TreeHouse Foods is benefiting from rising demand due to the coronavirus-led increased at-home consumption. To this end, the company’s solid retail demand is yielding. Moreover, it is focused on organic foods owing to consumers’ shifting preference for foods described as being “better for you,” which include fresh or freshly-prepared foods as well as natural, organic, or specialty foods. Apart from this, the inclusion of the Riviana pasta business (purchased in December 2020) is contributing to the company’s top line. We believe that such trends are likely to have aided the company’s first-quarter performance.

However, increased social distancing and at-home consumption trend amid the pandemic have been hurting the Food Away From Home business. Apart from this, the company is grappling with incremental pandemic-led costs. These include costs associated with higher production shifts, increased sanitization measures, supplemental payments and protective equipment. In its last earnings call, management highlighted that the company is witnessing significant inflation across several agricultural commodities, including items like oils, wheat and oats. Certainly, these factors are likely to have had a negative impact on the to-be-reported quarter’s performance. Also, unfavorable currency movements are a persistent threat to the company’s performance.

What the Zacks Model Unveils

Our proven model doesn’t conclusively predict an earnings beat for TreeHouse Foods this time around. 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. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

TreeHouse Foods carries a Zacks Rank #3 and an Earnings ESP of -1.45%.

Stocks With Favorable Combinations

Here are some companies that you may want to consider as our model shows that these have the right combination of elements to post an earnings beat.

Tyson Foods, Inc. TSN currently has an Earnings ESP of +16.03% and a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Monster Beverage Corporation MNST currently has an Earnings ESP of +0.41% and carries a Zacks Rank #3.

Nomad Foods Limited NOMD currently has an Earnings ESP of +0.73% and carries a Zacks Rank #3.

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Tyson Foods, Inc. (TSN) : Free Stock Analysis Report

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TreeHouse Foods, Inc. (THS) : Free Stock Analysis Report

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