Company: THS
Filing Date: 2025-07-31
Form Type: 10-Q
Source: 0001320695-25-000099
Chunk: 63

Company: TreeHouse Foods, Inc.
Filing Date: 2025-07-31
Form: 10-Q
Item: Part I, Item 1
Chunk 63
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 Statements of Operations. The Company is seeking to recover additional recall-related costs through its insurance coverage, and such recoveries are recorded in the period in which the recoveries are determined to be probable of realization. Refer to Note 16 to our Condensed Consolidated Financial Statements for additional information.

RTD Business Exit

During the second quarter of 2024, the Company made the decision to exit the RTD business as part of the Company's portfolio optimization strategy to focus on higher-growth, higher margin categories. During the first quarter of 2025, production for the RTD business ceased, and the Company sold the related machinery and equipment. Refer to Note 3 to our Condensed Consolidated Financial Statements for additional information.

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Macroeconomic Conditions and Trends

Persistent inflationary pressures on U.S. households are contributing to sluggish overall food and beverage consumption trends. In the categories where TreeHouse operates, private brands have consistently gained market share when compared to national brands, and many grocery retailers are making strategic investments in private brands. We continue to monitor consumption trends including the increased use and/or prevalence of certain weight loss drugs, which may or may not impact consumer preferences and consumption patterns. Additionally, economic uncertainty may further impact consumer spending and thus, consumption trends.

Many of our ingredients and packaging input costs remain elevated when compared to historical levels, including the prices of coffee and cocoa. In response, from time to time we will implement pricing actions to recover these higher costs. We will continue to monitor the inflationary environment, as well as regulatory impacts on food ingredients, to determine if additional pricing actions will be necessary.

As it relates to tariffs, our manufacturing footprint consists of 22 production facilities in the United States and five in Canada. A substantial portion of our products manufactured in Canada that are shipped to the United States qualify for duty-free treatment under the United States-Mexico-Canada Agreement ("USMCA"). However, we do incur tariffs on certain finished goods imported into Canada, and we source a portion of our raw materials and packaging from international suppliers, which may be subject to additional duties or trade-related costs. We are actively implementing alternative sourcing strategies and pricing actions to help mitigate these impacts.

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Results of Operations 

The following table presents certain information concerning our financial results, including information presented as a percentage of consolidated net sales:

Three Months Ended June 30, 20252024Increase / (Decrease)(Dollars in millions, except per share amounts)DollarsPercentDollarsPercent$ Change% ChangeNet