TreeHouse Foods today (4 May) insisted that it would pursue “aggressive” price increases in the remainder of the year as it looks to mitigate the impact of rising costs on profitability.
The US company, which produces private-label products across a number of categories, said that first-quarter net income rose to US$19.8m, or $0.54 per share, up from $16.3m, or $0.47 per share, in the previous year. On an adjusted basis, stripping out exceptional items and acquisitions, EPS remained flat at $0.59.
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Net sales for the first quarter totalled $493.5m, up from $397.1m last year. Sales for TreeHouse’s North American retail grocery segment increased 35%, or 1.1% excluding acquisitions. The company attributed the gain to continued growth in the private label sector. Sales for TreeHouse’s food away from home division increased 1.1% over last year, or fell 2.8% excluding acquisitions. TreeHouse’s industrial and export segment grew revenues by 6.3%, or 3.1% excluding acquisitions.
“We had a strong start to the year on the top line and are encouraged by our progress,” TreeHouse chairman and CEO Sam Reed said.
However, Reed continued, while TreeHouse benefited from favourable forward positions on agricultural commodities in the quarter, these benefits were “more than offset” by a rising energy environment.
Looking to the remainder of the year, Reed said the company would offset higher costs with price increases. “We have aggressive plans in place to recover these costs through price increases during the remainder of the year,” he said.
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