TreeHouse Foods shares fall more after broker downgrades
(Reuters) - Several analysts cut their ratings on TreeHouse Foods Inc (THS.N) after falling sales in the company's private label soup business led it to cut its full-year profit outlook and shut one its plants.
Treehouse shares were down 7 percent, adding to their Wednesday losses. The stock has now lost 15 percent of its value, or about $300 million, over the past two days.
Sales in the soup business, which makes store-branded products for retailers, have been declining over the last five years, leading to the shut down at its soup facility in Mendota, Illinois.
"After the discontinuation of some of its baby food business and ending some low margin pickle sales, the soup restructuring is the third product line in three years that will slow the top line growth for TreeHouse," Jefferies analysts led by Thilo Wrede wrote.
The company has been closing pickle manufacturing plants as well as downsizing its baby foods business after acquiring it from Del Monte Foods Co in 2006.
TreeHouse, which also produces the E.D. Smith-branded jams and spreads, said it would also close a salad dressing plant in Ontario, Canada and expects annual savings of $30 million from the closures.
However, analyst William Chappell of SunTrust Robinson Humphrey Inc said he was uncertain about how much of the savings would actually trickle down to the bottom line. He cut his rating on the stock to "neutral" from "buy".
Shares of the Oak Brook, Illinois-based company were trading down about 8 percent at $46.92.on Thursday on the New York Stock Exchange. They touched a 21-month low of $46.15 earlier.
(Reporting by Aditi Shrivastava in Bangalore; Editing by Sreejiraj Eluvangal)
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