OAK BROOK, ILL. –  A recall that occurred in 2023 associated with TreeHouse Foods, Inc.’s broth business and the subsequent shutdown and restarting of a broth processing plant continues to weigh on the private label manufacturer’s financial performance.

“We have a plan in place and are tracking against it,” said Steven T. Oakland, president and chief executive officer, during a May 6 conference call to discuss first-quarter results. “We have upgraded our equipment, refined and improved our process, and have trained and maintained our workforce at the facility with the expectation that production will continue to increase in the coming months.

“This should provide a meaningful lift to our second-half profitability. In the meantime, our other broth facility is performing well, and we have been doing our best to provide as much product as possible to our customers in this period.”

First-quarter profitability was impacted by disruption of the broth business, a carryover impact of planned distribution exits in coffee and some in-store bakery categories, and costs associated with the divestiture of the company’s Meal Preparation business.

For the quarter ended March 31, TreeHouse Foods recorded a loss of $11.7 million, which compared unfavorably to the first quarter of fiscal 2023 when the company earned $15.2 million, equal to 36¢ per share on the common stock.

Quarterly sales fell to $820.7 million from $854 million the year before.

“We are executing well against our plans for 2024, securing numerous opportunities since the start of the year, including wins in cookies, refrigerated dough, pickles, and pretzels, to name a few,” Oakland said. “These will drive growth in the second-half results and showcase our strategy in action within the categories where we have advantaged capabilities and depth.”

Management reaffirmed the company’s fiscal 2024 guidance of sales expected in the range of $3.43 billion to $3.5 billion, and adjusted EBITDA expected in a range of $360 million to $390 million. Thirty percent of the adjusted EBITDA is expected to be earned in the first half of the fiscal year with the rest occurring in the second half, according to the company.

“… With regard to net sales, we typically experience lower sales in the first half of the year, with the second quarter being our seasonally lowest quarter from a volume standpoint, and higher net sales during the second half of the year, which is driven by our seasonally strongest fourth-quarter period,” said Patrick O'Donnell, chief financial officer. “The split is slightly more pronounced on adjusted EBITDA, driven by stronger demand and higher utilization, which is also most pronounced in the fourth quarter.

“There are some differences in this seasonality in 2024, given the constraints impacting us in the first half due to our broth facility. We still believe our net sales will look relatively close to our historical cadence.”

O’Donnell added that two cost savings programs scheduled to begin during the third quarter will save the company approximately $50 million and contribute to second-half profitability.