Jun. 22, 2011 (PR Newswire) --
OAK BROOK, Ill., June 22, 2011 /PRNewswire/ -- TreeHouse Foods, Inc. (NYSE: THS) today announced that the lag in the Company's pricing actions in response to higher freight, transportation, packaging and other related commodity costs has continued and is expected to be most acute during the second quarter. As a result, the Company is lowering its full year 2011 adjusted earnings per share guidance to a range of $2.90 to $3.00 with the second quarter results expected to be between $0.42 and $0.44 per share.
For the second quarter, the Company estimates strong organic sales growth of 3.5%-4.0% and total net sales of nearly $490 million. Gross margins, however, are expected to decline approximately 250 bps versus the second quarter of 2010 to between 22% and 23%. For the year, TreeHouse expects gross margins to be flat to slightly below last year, as pricing actions initiated in the second quarter will be realized during the Company's third and fourth quarters.
Sam K. Reed, Chairman and CEO, said, "While we are encouraged by our ongoing top line strength, I am disappointed that we are delivering results below our expectations. The challenges we faced in the first quarter from rising fuel and other inputs have persisted, and as a private label company, a lag in pricing has a direct effect on earnings. While our pricing efforts have been aggressive, the impact will not be realized in time to offset the higher cost environment of our second quarter."
"The premise of our private label strategy remains intact. The market for house brands is robust, as budget conscious consumers continue to seek value without compromise. I am confident in our strategic vision, and we remain committed to generating long-term superior shareholder value," continued Mr. Reed.
CONFERENCE CALL AND WEBCAST
TreeHouse management will host a conference call tomorrow, Thursday, June 23, 2011 at 8:30 a.m. EDT to discuss this announcement.