Why TreeHouse Foods Shares Climbed

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 food manufacturer TreeHouse Foods (NYSE: THS  ) popped 11% today, after its fourth-quarter results impressed Wall Street.

So what: The stock was slammed last summer on concerns over sluggish sales and spiking input costs, but a wide fourth-quarter beat -- revenue of $592.8 million versus the consensus of $577.9 million -- reinforces recent optimism over management's recent initiatives. In fact, TreeHouse's North American Retail Grocery segment saw volume/mix growth of 8.7%, despite weak performance in the sector, giving investors plenty of good vibes about its competitive position going forward.

Now what: For 2013, management sees a net sales increase of 3.5%-4.5%, and expects gross margins to expand by up to 100 basis points. According to Chairman and CEO Sam Reed:   

As we enter 2013, we believe we are better prepared despite challenges related to the economy, changing consumer shopping patterns, or the weather. We are maintaining our internal focus on lowering our cost to serve, but also escalating our efforts to find product adjacencies that will help drive incremental organic growth.

Of course, with the stock now up roughly 30% from its 52-week low, and trading at a 20-plus P/E, much of that growth might already be reflected in the price.

Interested in more info TreeHouse? Add it to your watchlist.

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

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.

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: 2270244, ~/Articles/ArticleHandler.aspx, 3/6/2015 3:14:36 PM

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...

Apple's next smart device (warning, it may shock you

Apple recently recruited a secret-development "dream team" to guarantee its newest smart device was kept hidden from the public for as long as possible. But the secret is out. In fact, ABI Research predicts 485 million of this type of device will be sold per year. But one small company makes Apple's gadget possible. And its stock price has nearly unlimited room to run for early-in-the-know investors. To be one of them, and see Apple's newest smart gizmo, just click here!