Executive Summary

Q1 2025 came in mixed on the top line but strong on profitability: net sales $792.0M (-3.5% YoY) while Adjusted EBITDA rose 25% to $57.5M, above the upper end of guidance; Adjusted diluted EPS was $0.03 versus GAAP EPS of -$0.63 .
Results beat Wall Street on all three key metrics: Revenue $792.0M vs $789.8M consensus (+$2.2M), Adjusted EBITDA ~$56–58M vs ~$48.5M consensus, and Adjusted EPS $0.03 vs -$0.16 consensus; FY25 outlook was reaffirmed (Adjusted Net Sales $3.34–$3.40B; Adj. EBITDA $345–$375M; FCF ≥$130M)* .
Management cited margin management, supply chain savings, and Harris Tea accretion as key profit drivers; Brantford frozen griddle capacity was restored and is expected to benefit 2H25 .
Near-term narrative catalyst: clear beat vs guidance/consensus, reaffirmed FY guide, and Q2 guidance bracketed around consensus (Adj. Net Sales $785–$800M; Adj. EBITDA $61–$71M), with H2 tailwinds from griddle recovery and seasonal uplift .

What Went Well and What Went Wrong

What Went Well
- Profitability outperformed: Adjusted EBITDA $57.5M (+$11.5M YoY) with margin +160 bps YoY to 7.2%, reflecting supply chain savings, favorable pricing, and Harris Tea accretion .
- Operational progress: “all of our [Brantford] lines are running” with pipeline fill ongoing; benefit expected in 2H25 .
- Strategic discipline: margin management and portfolio simplification (exiting complex/low-margin items) improved mix and plant efficiency; “deliberate choices on bidding or not bidding on pieces of business that do not meet our margin hurdles” .
What Went Wrong
- Top-line pressure: Net sales -3.5% YoY driven by planned margin management, softer consumption (including Easter shift), and griddle recall service impacts; organic vol/mix declined .
- Higher non-operating expense: Total other expense rose to $38.1M (+$28.0M YoY) on unfavorable mark-to-market (interest rate swaps), higher interest expense, and debt extinguishment .
- Cash usage: Operating cash flow -$53.5M and FCF -$75.3M in Q1 on working capital timing and capex .

Financial Results

Metric	Q3 2024	Q4 2024	Q1 2025
Net Sales ($M)	$839.1	$905.7	$792.0
Adjusted Net Sales ($M)	$854.4	$911.4	$796.0
GAAP Diluted EPS	-$0.07	$1.15	-$0.63
Adjusted Diluted EPS	$0.74	$0.95	$0.03
Gross Profit Margin % (GAAP)	15.6%	19.5%	14.5%
Adjusted EBITDA ($M)	$102.5	$118.3	$57.5
Adjusted EBITDA Margin %	12.0%	13.0%	7.2%

Estimate comps (S&P Global) – Q1 2025 actual vs consensus: Revenue $792.0M vs $789.8M estimate; Adjusted EPS $0.03 vs -$0.16 estimate; EBITDA ~$56–58M vs ~$48.5M estimate*. Values retrieved from S&P Global.

Q1 2025 vs S&P Global	Consensus*	Actual
Revenue ($M)	789.8	792.0
Primary/Adjusted EPS ($)	-0.16	0.03
EBITDA ($M)	48.5	~56–58 (Adj. EBITDA $57.5)

KPIs (Q1 2025): Operating cash flow -$53.5M; Free cash flow -$75.3M; Capex $25.9M .

Note: TreeHouse does not provide a segment revenue table in the release/8-K for Q1 2025; commentary highlights drivers across categories (cookies, snacking, beverages) and Harris Tea acquisition .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Adjusted Net Sales	FY 2025	$3.340–$3.400B (Feb 14)	$3.340–$3.400B (May 6)	Maintained
Adjusted EBITDA	FY 2025	$345–$375M (Feb 14)	$345–$375M (May 6)	Maintained
Free Cash Flow	FY 2025	≥$130M (Feb 14)	≥$130M (May 6)	Maintained
Net Interest Expense	FY 2025	$80–$90M (Feb 14)	$80–$90M (May 6)	Maintained
Capital Expenditures	FY 2025	~$125M (Feb 14)	~$125M (May 6)	Maintained
Adjusted Net Sales	Q2 2025	—	$785–$800M	New
Adjusted EBITDA	Q2 2025	—	$61–$71M (incl. $6M timing shift)	New

Additional context: Company reiterated posture on tariffs/ingredients policy; current guide assumes policies in place “as of today” .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q3’24, Q4’24)	Current Period (Q1’25)	Trend
Supply chain savings/efficiency	Achieved expected savings; sequential margin improvement in 2H’24	Early returns driving EBITDA beat; visibility to $250M gross savings by 2027	Improving execution
Griddle recall/restoration	Recall impacted Q3 sales/margins; restoration underway	Brantford lines running; pipeline fill in progress; H2 uplift expected	Recovering into 2H
Margin management/portfolio	Margin mgmt actions and exits highlighted into FY25 plan	Continued capacity allocation to higher-margin mix; disciplined bidding	Ongoing discipline
Consumer/macro/private label	Softer consumption Q3; sequential improvement Q4	March trough (Easter timing), April bounce; price gaps favorable; share gains LT	Stabilizing/constructive
Tariffs/regulatory	Limited disclosure prior	USMCA mitigates U.S. duty exposure; limited Canada tariffs; reformulations for ingredients standards	Managed exposure
Capital allocation/leverage	Buybacks in 2024; focus on cash build	Target leverage 3–3.5x; rebuild cash before evaluating buybacks later in 2025	Deleveraging bias

Management Commentary

“Adjusted EBITDA…exceeded the upper-end of our guidance range…. We restored production capacity at our Brantford frozen griddle facility and implemented plans to drive margin and execution consistent with our focus on profitability and cash flow growth.” – Steve Oakland, CEO .
“All of our [Brantford] lines are running, and we are in the process of filling the customer pipeline. We are on plan to have this business in place to positively impact the second half of the year.” .
“We continue to strengthen our margin management function…allocating our capacity to the most attractive mix…This quarter’s results are an example of making deliberate choices on bidding or not bidding on pieces of business that do not meet our margin hurdles.” .
On tariffs/ingredients policy: “All of the products made in Canada that are shipped into the United States do so duty-free… we are executing alternative sourcing strategies or pricing to address these costs…we have been working on reformulation for some time.” .
CFO on outlook: Reiterated FY25 Adj. Net Sales $3.34–$3.40B, Adj. EBITDA $345–$375M, FCF ≥$130M; Q2 Adj. Net Sales $785–$800M, Adj. EBITDA $61–$71M .

Q&A Highlights

Demand/macro and private label: Guide assumes “zero trend” in consumption; any incremental trade-down to private label would be upside .
Margin management and bidding: Company prioritizing core items and operational efficiency; exited complex seasonal SKUs to unlock capacity; some specialty items may go to smaller vendors .
Category dynamics: Snacking comped tough early ’25; beverages performing well; consumers still snacking albeit mix shift .
H2 uplift: Organic vol/mix implies improvement in back half on normal seasonality plus griddle recovery; Q4 a positive lap .
Leverage and buybacks: Maintain 3–3.5x target; rebuild cash in 1H; reassess options (including repurchases) later in the year .

Estimates Context

Q1 2025 beats: Revenue +$2.2M vs S&P ($792.0M vs $789.8M); Adjusted EPS $0.03 vs -$0.16; EBITDA ~$56–58M vs ~$48.5M*. Values retrieved from S&P Global. Actuals cited above .
Q2 2025 guide vs S&P: Company Adj. Net Sales $785–$800M vs revenue consensus ~$788.1M*; Adj. EBITDA $61–$71M vs EBITDA consensus ~$65.9M*; EPS not guided (consensus ~$0.12*) . Values retrieved from S&P Global.

Key Takeaways for Investors

Profit over volume is working: deliberate portfolio/margin actions and supply chain savings drove an EBITDA beat despite lower sales; expect continued mix-led profitability in 2025 .
Near-term set-up: Q2 guidance brackets consensus while $6M expense timing normalizes; H2 should improve with fully restored griddle capacity and seasonality .
FY25 risk guardrails: Guide maintained despite macro uncertainty, with tariff exposure mitigated via USMCA and sourcing/pricing; watch consumption trajectory and category mix .
Cash/FCF trajectory: Q1 FCF negative on working capital and capex; full-year ≥$130M FCF intact; deleveraging to 3–3.5x targeted before reconsidering buybacks .
Watch execution KPIs: adjusted gross margin and EBITDA margin progression, service levels, and Harris Tea integration accretion; any acceleration in private label trade-down could be upside vs conservative sales planning .

Footnote: Asterisk-marked estimate figures are Values retrieved from S&P Global.

TreeHouse Foods, Inc. (THS)·Q1 2025 Earnings Summary