OAK BROOK, ILL. — A broth recall and supply chain issues related to its cookies and pretzels businesses that occurred during TreeHouse Foods, Inc.’s third quarter continued to affect the company in the fourth quarter and will continue to have an impact during the first half of fiscal 2024, according to the company.

Net income for the fourth quarter ended Dec. 31 was $7.5 million, equal to 12c per share on the common stock, and an improvement over the fourth quarter of fiscal 2022 when the company incurred a loss of $23.4 million.

Quarterly sales fell to $910.8 million from $967.7 million the year before.

“Our net sales decline was primarily driven by challenges at our broth facility as well as discrete supply chain disruptions within our pretzel and cookie business,” said Patrick O'Donnell, chief financial officer, during a Feb. 16 conference call with securities analysts. “The remaining decline was primarily due to planned exits of lower-margin business.”

Mr. O’Donnell added the company will be dealing with the issues created by the broth recall early in fiscal 2024.

“With regard to the first quarter, we are expecting net sales of $780 million to $810 million, which represents a year-over-year decline of approximately 7% at the midpoint,” he said. “The decline will be driven primarily by the impact of the broth facility, which will also adversely impact our volumes.”

For the year, TreeHouse Foods earned $53.1 million, equal to $1.06 per share on the common stock and better than the $146.3 million loss the company recorded in fiscal 2022.

Annual sales were $3.43 billion, up slightly from $3.3 billion the year before.

“Fiscal 2023 represented our first full year operating as a more simplified private brands snacking and beverage (company),” said Steve Oakland, chairman, president and chief executive officer. “With this sharpened focus, we successfully executed on our strategic priorities, including initiatives to build depth in our higher-growth, higher-margin categories, better optimize our supply chain, and improve our service levels.”

In fiscal 2024, TreeHouse Foods is guiding for sales to be between $3.43 billion and $3.5 billion, which represents growth of approximately zero to 2%. Adjusted EBITDA from continuing operations is expected in the range of $360 to $390 million.

“From a macro perspective, we've seen weakness in overall food and beverage consumption volumes over the last year,” O’Donnell said. “Recently, while national brand volume has been down, private brands volume has been flat in our categories. We believe it is prudent to assume no significant changes to the consumption environment in the near term.

“Therefore, we are not assuming a return to historical consumption trends in 2024. Having said that we see a number of opportunities to grow our top line organically, particularly in the businesses where we strengthened our capabilities last year, including coffee, pretzels and pickles.”

In the past, TreeHouse Foods has guided a sales growth target of 2% to 3%. The company’s fiscal 2024 guidance reflects challenging market dynamics, Oakland said.

“We guided to a midpoint of 1% growth … for this year,” he said, “if you think about a macro environment where units are flat, and we've guided deflation. That means we've got to have a couple of percent unit growth to make that happen. We just think guiding stronger than that with the uncertain consumer environment is imprudent at this time.”