12:00 PM EST, 11/12/2024 (MT Newswires) -- TreeHouse Foods ( THS ) lowered its full-year core profitability outlook on Tuesday as the food and beverage company's third-quarter results trailed market expectations amid a product recall and volume declines.

The company now anticipates adjusted earnings before interest, taxes, depreciation and amortization of $335 million to $345 million for 2024, down from its previous projections of $360 million to $380 million. The lowered guidance reflects deteriorating consumption trends and softer mix, as well as the impact of a voluntary recall of the company's frozen griddle products, it said.

Last month, TreeHouse Foods ( THS ) initiated the recall of certain frozen waffle products made at its Ontario facility over food quality and safety concerns following a routine quality assurance test. The company has temporarily closed the facility and plans to resume manufacturing in the first quarter of 2025, Chief Executive Steve Oakland said during an earnings call, according to a Capital IQ transcript.

The company expects adjusted sales to be in a range of $3.37 billion to $3.4 billion for the ongoing year, representing an annual decrease of 1% to 2%, including the estimated impact from the recall. In August, the company forecast net sales of $3.43 billion to $3.5 billion.

For the quarter ended September, TreeHouse Foods ( THS ) posted adjusted earnings of $0.74 per share, up from $0.57 the year before, but just shy of the Capital IQ-polled consensus of $0.75. Sales declined 2.8% to $839.1 million. Excluding the griddle product recall, revenue came in at $854.4 million, trailing the Street's view for $874.4 million. The stock tumbled 16% in midday trading.

The product recall was a 1.4% drag on the top-line. Volume and mix edged down 0.8% due to a negative impact of $5 million to $10 million from Hurricane Helene, which disrupted distribution in the US southeastern region, according to the company. Prices were down 0.5%.

"Our third-quarter results were mixed, as a tough operating environment with softer consumer takeaway led to sales below our expectations," Oakland said in a statement. "I was pleased with our supply chain savings, which led to margin improvement and profit that was within our guidance range."

TreeHouse expects adjusted sales to come in between $900 million and $930 million for the ongoing quarter, representing an annual drop of 1% to growth of 2%. Organic volume and mix are set to be up low-single-digits for the period, while pricing is anticipated to be a "slight drag," the company said.

"Our current expectation is that the growth from new business wins and strength in our broth business will likely be offset by the impact of our griddle recall and softness in recent consumption trends that are likely to persist," Chief Financial Officer Patrick O'Donnell said on the call while discussing initial thoughts for fiscal 2025. "As a result, we will focus on our supply chain and margin management initiatives to improve efficiency and optimize costs to drive year-over-year EBITDA growth that is not dependent on top line performance."

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