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

Company: TreeHouse Foods, Inc.
Filing Date: 2025-07-31
Form: 10-Q
Item: Part I, Item 2
Chunk 10
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The net sales decrease of 1.2% was primarily due to unfavorable 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. This was partially offset by the acquisition of the private brand tea business, favorable pricing to recover commodity inflation, and distribution gains.

Gross Profit — Gross profit as a percentage of net sales was 16.0% in the first six months of 2025, compared to 14.9% in the first six months 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 $232.6 million in the first six months of 2025 compared to $249.5 million in the first six months of 2024, a decrease of $16.9 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, lower freight and commission costs, and cost reduction activities. This was partially offset by increased restructuring costs primarily from professional fees and severance and an increase in operating expenses from the Harris Tea acquisition.

Total Other Expense  — Total other expense was $71.0 million in the first six months of 2025 compared to $27.0 million in the first six months of 2024, an increase in expense of $44.0 million. The increase was due to a $40.2 million unfavorable change in non-cash mark-to-market impacts from hedging activities, driven by interest rate swaps and commodity contracts, primarily coffee. Additionally, the Company had an increase of $10.3 million in interest expense primarily due to an increase in borrowings on our Revolving Credit Facility. This was partially offset by a favorable currency exchange rate impact of $9.9 million between the U.S. and Canada.

Income Taxes — Income taxes were recognized at an effective rate of 29.5% in the first six months of 2025 compared to 21.5% recognized in the first six months of 2024.