Treehouse Foods Shares Got Crushed: What You Need to Know

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Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of food manufacturer Treehouse Foods (NYS: THS) fell 10% today after the company gave weak earnings guidance for the fourth quarter.

So what: Management said it expects revenue to grow about 5% to $535 million and adjusted earnings per share to be between $0.84 and $0.87. Analysts had expected revenue to be $567.1 million and earnings to be $1.07 per share.  

Now what: The company said warm weather hurts sales of hot cereals and soups that normally sell well in the winter. Also, a higher percentage of sales to lower-margin dollar stores is having an impact on profitability. A miss like this isn't good news, but these seem like temporary problems due to very unusual weather so I think the sell-off may be a bit overdone today.

Interested in more info on Treehouse Foods? Add it to your Watchlist by clicking here.

At the time this article was published Fool contributor Travis Hoium does not have a position in any company mentioned. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings or follow his CAPS picks at TMFFlushDraw.Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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