What Happened?
Shares of private label food company TreeHouse Foods (NYSE:THS) jumped 3.1% in the morning session after the stock rebounded from a 52-week low set in the previous session.
Shares hit a new 52-week low of $19.13 the previous day. The stock had been under pressure, falling nearly 39% over the previous six months and almost 50% over the previous year, reflecting broader challenges and investor concerns. Despite the recent downturn, there were some potentially positive signs for investors. The company's President, Steven Oakland, recently purchased $100,000 worth of shares, an insider buying signal that can suggest management's confidence in the business's prospects.
After the initial pop the shares cooled down to $19.27, up 0.7% from previous close.
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What Is The Market Telling Us
TreeHouse Foods’s shares are somewhat volatile and have had 13 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 8 months ago when the stock dropped 17.3% on the news that the company reported weak third-quarter results that missed across key operating metrics we track.
Revenue and EBITDA fell below Wall Street's expectations, and the company also reported underwhelming earnings per share, which came in roughly in line.
Management called out a tough operating environment with softer consumer demand. In addition, the company discovered a potential contamination during routine product testing and initiated a recall of the affected products (frozen griddle). The recall was projected to affect volumes during the next quarter, translating to weaker sales. As a result, the company provided weak sales guidance for the next quarter, which was below consensus estimates.
Overall, this was a challenging quarter, highlighting new issues that the company has to deal with, at least in the short term.
TreeHouse Foods is down 44.7% since the beginning of the year, and at $19.27 per share, it is trading 55.4% below its 52-week high of $43.22 from September 2024. Investors who bought $1,000 worth of TreeHouse Foods’s shares 5 years ago would now be looking at an investment worth $441.12.
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