Consumer Non-Cyclical Sector Review: TreeHouse Costs, Lance Conversion

TreeHouse Foods Inc. (NYSE:THS): Despite indications for higher costs primarily in the first half of the year, the company anticipates input costs to stabilize as the year progresses. Although much of the company’s needed pricing is in place for certain crop inputs, targeted increases will be required. Therefore, the company expects to see revenues increase 8%-9%, driven primarily by a combination of pricing and 2.5%-3.5% of volume growth. Gross margin dollars are expected to grow in line with sales, resulting in relatively flat gross margin percentages. Operating expenses will increase due to re-instating the incentive compensation programs that did not pay out in 2011. For full year, TreeHouse expects its adjusted EPS to increase by a range of 10%-16%, to $3.00-$3.15 per share.

The shares closed at $57.46, up $2.39, or 4.34%, on the day. Its market capitalization is $2.06 billion.

Snyder S Lance Inc (NASDAQ:LNCE): Lower pricing associated with the conversion to an independent business operator, or IBO, model in the Company’s direct store delivery, or DSD, network is expected to reduce net revenues between 4% and 5% for 2012 as company-owned routes transition during the first half of the year. However, the company believes that its overall net revenue for the full year 2012 will only decline 1% to 3% overall, and that its EPS per diluted share will increase between 30% and 45%.

The shares closed at $21.98, down $0.91, or 3.98%, on the day. Its market capitalization is $1.49 billion.

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To contact the reporter on this story: Stella Mariz at staff.writers@wallstcheatsheet.com

To contact the editor responsible for this story: Damien Hoffman at editors@wallstcheatsheet.com