OAK BROOK, Ill. (AP) — TreeHouse Foods' first-quarter profit beat market expectations thanks to higher prices. But the company lowered its revenue expectations for the year, citing weakness at groceries.
The company, based in Oak Brook, Ill, sells private label foods to grocers and other foods to restaurant and industrial customers.
TreeHouse reported Tuesday that it earned $22.1 million, or 60 cents per share, for the quarter that ended March 31. That's up from $19.8 million, or 54 cents per share, in the same quarter last year. After adjusting for several one-time items, it earned 63 cents per share versus 59 cents per share last year.
Its total quarterly revenue climbed to $523.8 million from $493.5 million on higher prices across all its lines.
Analysts were expecting TreeHouse to earn 60 cents per share on revenue of $523.9 million, according to data from FactSet.
Sam Reed, the company's chairman, president and CEO said the company is lowering its revenue growth expectations for the year based on the first quarter results. It expects its revenue growth to be slightly less than its original guidance of 8 to 9 percent, but did not specify a specific range.
"As weakness in the retail grocery environment persists, we are maintaining our cautious stance on the coming two months, and believe that our second quarter results will be very similar to this quarter," Reed said.
The company's grocery revenue rose 7.2 percent during the quarter but that was largely due to prices that were 6 percent higher. Its sales volume rose only 1.4 percent.
TreeHouse said it plans to put further price hikes in place and cut its costs internally in the coming quarters to offset softness in its grocery business. As a result, it kept its earnings guidance of $3 to $3.15 per share for the year intact. Analysts are expecting earnings of $3.09 per share for the year.
Shares of TreeHouse Foods Inc. rose $2.06, nearly 4 percent, to $57.12 in midday trading. Its shares have traded between $50.02 and $67.25 in the past 52 weeks.