US private-label heavyweight TreeHouse Foods has said it will consider making acquisitions to add capacity amid an increase in consumer demand.

Reporting its Q4 and full-year 2022 results yesterday (13 February), TreeHouse revealed it had made a profit in the quarter but said it has been unable to meet “robust” demand from cash-strapped consumers trading down from higher-priced branded products.

The company saw Q4 net sales increase by 22% year-on-year to US$996.2m but admitted this was “primarily driven by pricing action”. Net income of $40.1m compared to a loss of $30.8m a year earlier.

Over the 12 months, sales increased from $2.94bn to $3.45bn while bottom-line losses narrowed from $80.9m to $16.1m.

In August, TreeHouse announced it had sold what it described as a “significant portion” of its meal preparation business to European investment group Investindustrial for $950m.

Speaking yesterday, CEO Steve Oakland said the company had closed out 2022 as “a more focused company, operating in faster growing, more profitable categories” and was well-positioned to capitalise on “a clear consumer shift toward value”.

But he added: “Our near-term priorities continue to be on increasing service levels and mitigating supply chain disruption so that we can better capture the robust demand for our products and drive growth for our customers.”

In a post-results call with analysts, Oakland said “a couple of things outside our control hit us and that softened our sales number”.

He added: “We think we are in a great group of categories. We just need to sell more. The demand is there.”

On using M&A to increase supply, he said: “If we have a chance to buy that capacity we would. Acquisitions for us would be capability-driven. If the assets are there we will use M&A to do it.”

Quizzed by analysts on the inflation outlook, interim CFO Patrick O’Donnell said he is expecting to see mid-single-digit inflation this year.

On pricing actions he said: “We will continue to have these very fact-based discussions with customers.”

But Oakland said: “A good piece of this [pricing] was taken already in January so much of that is already in.”

For fiscal 2023, TreeHouse expects net sales growth of 6% to 8% and adjusted EBITDA between $345m and $365m, representing a year-on-year improvement of 20% to 27%.