US private-label manufacturer TreeHouse Foods has issued a profit warning as a result of a fourth-quarter fall in volumes.
The company said an 8% decline in December volumes, well below historical levels, means adjusted earnings are now expected to be between US$2.70 and $2.73 per diluted share – a drop from the company’s previously-issued guidance of $2.90 to $3.00 per diluted share.
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TreeHouse said the volume decline was driven by a reduction in consumer food purchases, a sales shift away from traditional grocery customers toward alternate channel retailers and the negative effect of warm weather in the Midwest and north-east of the US on seasonal sales.
“Given our solid top line growth earlier in the year, we were surprised by the sudden decrease in December volumes,” chairman, president and CEO Sam Reed said today (20 January).
“Although our sales teams did an outstanding job in 2011 recovering pricing and bringing in new business in line with our expectations, the combination of consumer purchase behaviour, retail channel shifts and abnormal seasonality adversely affected our results in the quarter.”
The company will announce its fourth-quarter full-year earnings on 10 February.
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By GlobalData
