OAK BROOK, ILL. – Fiscal 2020 was going to be a year of adjustment for TreeHouse Foods, Inc. The company had reorganized for the second time in four years in February 2020 as management was intent on bringing the business’ structure into alignment with the needs of its customers. Then the pandemic happened, sales accelerated and company leadership had to adjust in ways they never imagined.

“We entered 2020 focused on unlocking the potential of our businesses,” said Steven T. Oakland, president and chief executive officer, during a Feb. 11 conference call to discuss financial results. “We reorganized to a two-division structure, Snacking & Beverages and Meal Preparation. Doing so allowed us to better align categories and businesses with how our customers think about the categories’ roles, enabling each business to focus on their unique strategies and tactics that would best position them for success.

“As the pandemic took hold, the unprecedented pantry stocking in March and April was like nothing any of us had ever seen. And as we all know, 2020 was a different year than anyone had imagined.”

That “different” year led to TreeHouse Foods finishing the year with net income of $13.8 million, equal to 87¢ per share on the common stock, and an improvement over fiscal 2019 when the company recorded a loss of $361 million.

Sales rose to $4.35 billion from $4.29 billion the year prior.

“Fundamentally, we are confident that private label continues to present meaningful opportunities for TreeHouse,” Mr. Oakland said. “As the retail landscape and consumers have adapted to the current environment, we’re seeing signs that our customers’ desire to strengthen their own brands is returning. This foundational demand is something that we are in a unique position to deliver. We like our position in the market to meet this opportunity as the company with the deepest capabilities and reach today in private label.”

Sales in TreeHouse’s Meal Preparation business unit rose to $2.7 billion in fiscal 2020 from $2.68 billion in 2019. Unit operating profit declined to $370.6 million from $381.3 million.

“Meal Prep organic growth of 1.3% was driven by a combination of volume, mix and pricing,” said William J. Kelley, chief financial officer. “The addition of the Riviana pasta business in December added 1.7% growth on top.”

Snack & Beverages sales rose to $1.65 billion from $1.61 billion, and operating income jumped to $235 million from $193 million the year prior.

“That growth within Snacking & Beverages was driven by beverages and drink mixes, up 24%,” Mr. Kelley said. “Broth is a good example in this group as it continues to benefit from today’s at-home cooking environment, and we are very pleased by the addition of some new business.

“We’re also encouraged by wins within our ready-to-drink beverage portfolio. New distribution in cookies as well as retailer promotions around candy were the main drivers of 3% growth in sweet and savory in the quarter.”

In fiscal 2021, TreeHouse Foods is guiding for adjusted earnings to fall within a range of $2.80 to $3.20 per share. Sales are expected to be between $4.4 billion and $4.6 billion.

Challenges that may affect fiscal 2021 results include commodity inflation, freight costs, the impact of COVID-19 on staffing and plant operations, and at-home food demand.

“In 2021, we are anticipating $100 million to $110 million of headwinds due to increased ingredient costs,” Mr. Kelley said. “This headwind has already begun to impact our results and will continue through the balance of the year. That’s in addition to increased employee costs, driven by tight labor markets and rising freight costs. We’ve been working hard to mitigate the impact of these inflationary pressures.

“We are confident in our ability to offset these costs through a combination of pricing actions and ongoing lean manufacturing efforts to offset labor increases. We will also realize greater utilization efficiencies from our Riviana integration efforts. On pricing specifically, we expect to start seeing the impact as we enter the second half of the year.”