What Happened:

Shares of private label food company TreeHouse Foods (NYSE:THS) fell 9.8% in the morning session after the company reported first-quarter results and provided revenue guidance for the next quarter, which fell below Wall Street's expectations. EPS also missed during the quarter, while profitability was generally impacted by downtimes at its broth facilities. Looking ahead, the company expects the restart of the facility, in addition to supply chain savings initiatives, to drive improved profits heading into the back half of the year. On the other hand, revenue came in ahead of consensus estimates. However, sales continued to decline in absolute terms, with revenue impacted by unfavorable volume/mix, pricing, and the restart of one of the broth facilities. Overall, this was a mediocre quarter for TreeHouse Foods.

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What is the market telling us:

TreeHouse Foods's shares are not very volatile than the market average and over the last year have had only 4 moves greater than 5%. In context of that, today's move is indicating the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business. 

The biggest move we wrote about over the last year was 3 months ago, when the stock dropped 14.8% on the news that the company reported fourth-quarter results, with organic revenue coming in weak and below expectation. The company highlighted a "difficult consumer environment in the food and beverage industry." Also, its revenue and adjusted EBITDA guidance for the coming year both missed analysts' expectations. Management expects growth in the first half of the year to be impacted by weakness in the broth business. Overall, the results could have been better.

TreeHouse Foods is down 20.5% since the beginning of the year, and at $33.32 per share it is trading 37.9% below its 52-week high of $53.69 from May 2023. Investors who bought $1,000 worth of TreeHouse Foods's shares 5 years ago would now be looking at an investment worth $595.54.

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