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Factors Likely to Influence TreeHouse Foods' (THS) Q3 Earnings

TreeHouse Foods, Inc. THS is scheduled to release third-quarter 2020 results on Nov 5. The company delivered an earnings surprise of 23.4% in the last reported quarter. Further, it outperformed the Zacks Consensus Estimate by 8.3%, on average, in the trailing four quarters.

The Zacks Consensus Estimate for third-quarter earnings has remained stable in the past 30 days at 61 cents per share. This also suggests 10.9% growth from 55 cents reported in the year-ago quarter. However, the consensus mark for revenues stands at $1,066 million, indicating growth of 0.8% from the year-ago period’s reported figure.

Factors to Note

TreeHouse Foods has been benefiting from rising demand due to the coronavirus-led stockpiling and increased at-home consumption. Keeping in these lines, the company remains focused on organic foods owing to consumers shifting preference for foods described as being “better for you,” which include fresh or freshly prepared foods, and natural, organic, or specialty foods. We believe that a rise in demand and growth in these categories are likely to have continuedin the third quarter as well.

Hence, the company had issued a decent third-quarter view in its last earnings call. Net sales for the third quarter of 2020 are expected in a band of $1.04-$1.08 billion, nearly flat (on a year-over-year basis) at the midpoint. Organic sales are likely to rise 2%. Further, adjusted earnings from continuing operations are envisioned to be 55-65 cents, suggesting a roughly 9% increase at the midpoint.

However, it is reeling under higher costs incurred in connection with the pandemic, including increased sanitization measures and protective equipment, a rise in production shifts,and availability of labor at all manufacturing and distribution facilities. Moreover, increased stay-at-home trends have been hurting the Food Away From Home business, which is anticipated to have continued in the third quarter. Also, unfavorable currency movements remain a woe.

TreeHouse Foods, Inc. Price and EPS Surprise

What the Zacks Model Unveils

Our proven model does not conclusively predict an earnings beat for TreeHouse Foods this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter

TreeHouse Foods has a Zacks Rank #3 but an Earnings ESP of 0.00%.

Stocks With Favorable Combinations

Here are some more companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat.

Purple Innovation PRPL presently has an Earnings ESP of +5.82% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

NuSkin Enterprises NUS currently has an Earnings ESP of +3.54% and a Zacks Rank #2.

Grocery Outlet Holding Corp. GO has an Earnings ESP of +10.76% and a Zacks Rank #2, at present.

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Nu Skin Enterprises, Inc. (NUS): Free Stock Analysis Report
 
TreeHouse Foods, Inc. (THS): Free Stock Analysis Report
 
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