TreeHouse Foods, Inc. (NYSE:THS) shares skyrocketed 18.3% in premarket trading Monday after the company announced it had entered into a definitive agreement to be acquired by Investindustrial in a deal valued at $2.9 billion, even as its latest quarterly results came in mixed.
For the third quarter, the private-label food manufacturer reported adjusted earnings of $0.43 per share, missing analyst expectations of $0.57. Revenue reached $840.3 million, slightly below the consensus forecast of $851.99 million and nearly flat compared to $839.1 million a year earlier, marking a modest 0.1% year-over-year increase.
TreeHouse’s results were weighed down by a non-cash goodwill impairment charge of $289.7 million, leading to a net loss of $265.8 million. Adjusted EBITDA also declined to $91.6 million, compared with $102.5 million in the same quarter last year.
“In light of the pending transaction, TreeHouse Foods will not host its conference call previously scheduled for today, and the Company is withdrawing guidance,” the company said in a statement.
Revenue gains were primarily supported by favorable pricing adjustments to offset commodity inflation, along with the acquisition of a private-label tea business and new distribution wins. However, these benefits were offset by lower volumes tied to macroeconomic consumption headwinds, distribution losses, planned margin optimization efforts, and the company’s exit from the ready-to-drink segment.
Despite the earnings miss, gross profit margin improved to 18.8% from 15.6% a year ago—an increase of 3.2 percentage points—largely reflecting $17.5 million in insurance recoveries linked to voluntary product recalls during the quarter.
Following the acquisition announcement, TreeHouse withdrew all forward-looking financial guidance and confirmed it will not issue future projections, as the company transitions toward completion of the deal with Investindustrial.