02:14 PM EDT, 08/05/2024 (MT Newswires) -- Treehouse Foods ( THS ) on Monday narrowed its full-year core profitability outlook while maintaining its sales expectations after its second-quarter financial results topped Wall Street's views.

The food and beverage company now expects 2024 adjusted earnings before interest, taxes, depreciation, and amortization between $360 million and $380 million, lowering the upper end of its previous range from $390 million.

"This update accounts for our performance for the first half of the year where our adjusted EBITDA was a few million dollars short of the upper end of our guidance range," Chief Financial Officer Patrick O'Donnell said on an earnings conference call, according to a Capital IQ transcript. The outlook also assumes that some of the consumer-driven mix trends will continue into the second half of 2024, he added.

TreeHouse shares were down 3.2% in Monday afternoon trade amid a stock market selloff.

The company continues to expect full-year net sales of $3.43 billion to $3.50 billion. Analysts surveyed by Capital IQ project $3.46 billion. TreeHouse's broth business is expected to be a "stronger contributor" in the second half, O'Donnell told analysts, adding that the company continues to expect its organic volume and mix to drive sales growth this year.

"From a pricing perspective, we are still planning for a modest commodity-driven decline year-over-year," O'Donnell said. "We continue to anticipate this will be mostly offset by a slight volume and mix benefit from the coffee and pretzel acquisitions that we completed last year."

For the quarter through June 30, adjusted earnings fell to $0.29 a share from $0.43 a year earlier, while net sales dropped 1.9% to $788.5 million. The results, however, topped the Street's views for $0.13 and $785.4 million, respectively. The company attributed the sales decline to pricing adjustments and unfavorable volume and mix tied to planned distribution exits mainly in its coffee and in-store bakery categories.

"Importantly, we are now through the impact of those business exits and, coupled with pipeline wins and strong private brand consumer trends, we have great confidence in returning to volume growth in (the third and fourth quarters)," O'Donnell said on the call. Second-quarter adjusted EBITDA from continuing operations fell to $70.6 million from $76.3 million a year earlier.

For the ongoing quarter, TreeHouse expects net sales of $865 million to $895 million, representing roughly flat to 4% growth from a year earlier. Three analysts polled by Capital IQ are looking for $889 million. Adjusted EBITDA from continuing operations is expected between $98 million and $108 million, while pricing is seen approximately flat.

"We have positioned the business well to deliver on our annual net sales targets and to achieve our updated profitability guidance," Chief Executive Steve Oakland said on the call. "Importantly, it's coming at a time when the private brand consumer landscape is also improving."

Price: 38.14, Change: -1.17, Percent Change: -2.98