Treehouse Foods, Inc. (NYSE:THS) Q3 2023 Earnings Conference Call November 6, 2023 8:30 AM ET

Company Participants

Steve Oakland - Chairman, President & CEO

Pat O'Donnell - EVP & CFO

Colleen Fiocchi - IR

Conference Call Participants

Andrew Lazar - Barclays

Rob Dickerson - Jefferies

Matt Smith - Stifel

Carla Casella - J.P. Morgan

Jon Andersen - William Blair

Jim Salera - Stephens Inc.

Operator

Hello. Welcome to the Treehouse Foods Third Quarter 2023 Conference Call. [Operator Instructions]. At this time, I would like to turn the call over to Treehouse Foods for the reading of the Safe Harbor statement.

Colleen Fiocchi

Good morning, and thanks for joining us today. Our press release and earnings deck, both issued this morning, are available in the Investor Relations section of our website at Treehousefoods.com.

Before we begin, we would like to advise you that all forward-looking statements made on today's call are intended to fall within the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements are based on current expectations and projections, and involve risks and uncertainties that may cause actual results to differ materially from our forward-looking statements. Information concerning those risks is contained in the company's filings with the SEC. On September 29, 2023, we completed the divestiture of our Snack Bars business. For purposes of our discussion today, we will briefly cover our third quarter results on a whole company basis, as the third quarter guidance that we previously issued incorporated the Snack Bars business. Results for the quarter are also provided on a continuing and discontinued operations basis in the press release, with the Snack Bars business reported in discontinued operations. The majority of our discussion today around our operating and financial results will center around performance on an adjusted continuing operations basis. We have provided recast historical financials for Treehouse continuing operations, for 2019, 2020 2021, and 2022, on an annual basis, and 2022 and 2023 on a quarterly basis, so that you can best compare operating performance. A reconciliation of non-GAAP measures to their most direct comparable GAAP measures can be found in today's press release and the appendix tables of today's earnings deck.

With that, let me turn the call over to our Chairman, CEO, and President, Mr. Steve Oakland, for his opening remarks.

Steve Oakland

Thank you, Colleen, and good morning, everyone. I'm pleased to be here today to discuss our third quarter financial results and provide an update on our outlook for the remainder of the year. Treehouse has made important progress, executing our strategy today, positioning the company to capitalize on industry and consumer trends, and create long-term value for our shareholders. On Slide 3, we've noted the key takeaways for the quarter, and we'll discuss each of them in detail on the call. Turning to our results. For the third quarter, we delivered year-over-year net sales and volume growth, and outperformed the broader private brand market in the retail channel. We were particularly pleased to see our core retail volume increase 1% despite a voluntary product recall and a discreet supply chain disruption late in the quarter. These factors, combined with weaker co-manufacturer and food-away-from-home sales, and lower than anticipated consumption in select retail categories, resulted in sales below our original expectations. Importantly, as a result of our team's strong execution, we grew adjusted EBITDA from continuing operations by nearly 13% year-over-year, in line with the high end of our guidance range.