OAK BROOK, Ill. (AP) — TreeHouse Foods said its adjusted fourth-quarter adjusted earnings took a hit because of unseasonably warm weather this year, which drove down sales volumes in December. Its shares took a hit in premarket trading, too, falling 8 percent.
The company sells of canned soup, instant oatmeal and powdered coffee creamer to both stores and restaurants, products that tend to sell better when consumers are seeking a respite from the cold. Yet there has also been a shift in consumer behavior, the company said. More people are stopping at places like Target Corp., Wal-Mart Stores Inc., and warehouse club operators like Costco Wholesale Corp.
TreeHouse serves mostly more traditional grocers and other distribution channels.
TreeHouse said its sales volumes dropped 8 percent in December, which is well below historical levels.
The food producer said it expects adjusted earnings to come in between 84 and 87 cents per share, which is well below the $1.07 per share expected on Wall Street, according to a poll by FactSet. The company also cut its full-year adjusted earnings guidance on Friday.
While quarterly revenue ticked up 5 percent to about $535 million, due to higher prices and acquisitions, analysts were expecting revenue of $565.1 million.
The company shifted to lower-margin products and that sent quarterly gross margin down from 24.8 percent, to about 22 percent.
TreeHouse lowered its full-year adjusted earnings to $2.70 to $2.73 per share, from prior forecasts of $2.90 to $3 per share. Analysts had been looking for something closer to $2.94 per share for the year.
Shares of TreeHouse Foods Inc., based in Oak Brook, Ill., just outside of Chicago, slumped $5.06 to $57.80 before the opening bell. The company's stock has traded between $46.73 and 67.25 over the past year, peaking in late 2011.
Fourth-quarter and full-year financial results are expected on Feb. 10.