TreeHouse Foods Shares Plunged: What You Need to Know

Don't let it get away!

Keep track of the stocks that matter to you.

Help yourself with the Fool's FREE and easy new watchlist service today.

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of private-label food manufacturer TreeHouse Foods (NYSE: THS  ) were spoiling in today's trading, losing as much as 15% on heavier-than-average volume.

So what: "We are not going to make as much money as we thought we would." TreeHouse didn't say that exactly, but that was the gist of the company's press release yesterday. Thanks to rising commodity costs like packaging and freight, combined with a lag in the realization of price increases, the company lowered its second-quarter and full-year earnings outlook to midpoints of $0.43 and $2.95, respectively. Analysts had been expecting $0.71 in the second quarter and $3.07 for the full year.

Now what: TreeHouse CEO Sam Reed summed the situation up pretty well, saying:

The challenges we faced in the first quarter from rising fuel and other inputs have persisted, and as a private label company, a lag in pricing has a direct effect on earnings.  While our pricing efforts have been aggressive, the impact will not be realized in time to offset the higher cost environment of our second quarter.

Rising commodity costs have been a common refrain across the industry, not only from private-label producers but also major branded-goods companies like Procter & Gamble (NYSE: PG  ) and Clorox (NYSE: CLX  ) . So the big question may be how soon the commodity pressure starts to moderate.           

Want to keep up-to-date on these stocks?

The Motley Fool owns shares of Clorox. Motley Fool newsletter services have recommended buying shares of Procter & Gamble and Clorox. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

Fool contributor Matt Koppenheffer does not have a financial interest in any of the companies mentioned. You can check out what Matt is keeping an eye on by visiting his CAPS portfolio, or you can follow Matt on Twitter @KoppTheFool or Facebook. The Fool’s disclosure policy prefers dividends over a sharp stick in the eye.

Read/Post Comments (0) | Recommend This Article (2)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 1511323, ~/Articles/ArticleHandler.aspx, 10/25/2016 8:20:10 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 11 hours ago Sponsored by:
DOW 18,223.03 77.32 0.43%
S&P 500 2,151.33 10.17 0.47%
NASD 5,309.83 52.43 1.00%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

10/24/2016 4:02 PM
THS $87.01 Up +0.72 +0.83%
TreeHouse Foods CAPS Rating: *****
CLX $118.66 Down -0.59 -0.49%
The Clorox Company CAPS Rating: ****
PG $84.10 Down -0.23 -0.27%
Procter and Gamble CAPS Rating: ****