Company: THS
Filing Date: 2025-07-31
Form Type: 10-Q
Source: 0001320695-25-000099
Chunk: 6

Company: TreeHouse Foods, Inc.
Filing Date: 2025-07-31
Form: 10-Q
Item: Part I, Item 2
Chunk 6
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2 Business exit(7.8)(1.0)Product recall returns(1.8)(0.2)Foreign currency(0.6)(0.1)Total change in net sales$9.5 1.2 %Product recall returns/other2.0 0.2 Total change in adjusted net sales (1)$11.5 1.4 %

(1)Adjusted net sales is a Non-GAAP financial measure. Refer to the "Non-GAAP Measures" section for additional information.

The net sales increase of 1.2% was primarily due to the acquisition of the private brand tea business, favorable pricing to recover commodity inflation, and distribution gains. This was partially offset by volume/mix related to planned margin management actions, broader macroeconomic consumption trends, service impacts related to the voluntary recall of frozen griddle products, and the RTD business exit.Gross Profit — Gross profit as a percentage of net sales was 17.4% in the second quarter of 2025, compared to 16.3% in the second quarter of 2024, an increase of 1.1 percentage points. The increase is primarily due to $13.1 million of insurance recoveries related to voluntary product recalls received during the second quarter of 2025, favorable margin from the Harris Tea acquisition and supply chain savings initiatives. This was partially offset by commodity cost inflation and unfavorable fixed cost absorption due to declining consumption trends.Total Operating Expenses — Total operating expenses were $111.9 million in the second quarter of 2025 compared to $132.3 million in the second quarter of 2024, a decrease of $20.4 million. The decrease in expense is primarily due to a non-cash impairment charge recorded in the second quarter of 2024 of $19.3 million related to the Ready-to-drink beverages asset group, as well as cost reduction activities in 2025.Total Other Expense — Total other expense was $32.9 million in the second quarter of 2025 compared to $16.9 million in the second quarter of 2024, an increase in expense of $16.0 million. The increase was due to a $16.2 million unfavorable change in non-cash mark-to-market impacts from hedging activities, driven by commodity contracts, primarily coffee, and interest rate swaps. Additionally, the Company had an increase of $6.6 million in interest expense primarily due to an increase in borrowings on our Revolving Credit