OAK BROOK, ILL. — Since Steven T. Oakland took over as president and chief executive officer of TreeHouse Foods, Inc., the private label manufacturer has been downsizing, divesting businesses, selling manufacturing plants and executing a sweeping stock-keeping unit (s.k.u.) rationalization program. The top- and bottom-line results have been tepid through the first two quarters of fiscal 2019, but management sees the second half of the year as a period of modest improvement.

During the quarter ended June 30, TreeHouse Foods recorded a loss of $171.8 million, an increase compared with the loss recorded during the same period of the previous year of $19.5 million.

Sales during the quarter fell 14% to $1,250.7 million from $1,455.8 million.

“Revenue of $1.25 billion fell short of our expectations, and we still have some work to do to improve the top line for Baked Goods, Beverages and Meal Solutions, where we still are lapping lost volume and will continue to do so until we get to the fourth quarter,” Mr. Oakland said during an Aug. 1 conference call with analysts. “Additionally, our more disciplined pricing process pruned some less profitable volume also impacting the second quarter.”

Specifically, the company lost some baked foods distribution that was below its established margins, and a large customer more tightly managing inventory impacted quarterly results, according to the company.

TreeHouse Foods took two impairment charges during the quarter. The first was a $67 million asset write down for its Snacks business unit. Divestment of the Snacks business to Atlas Holdings L.L.C., Greenwich, Conn., was completed on Aug. 2.

“Secondly, we impaired $64 million in assets related to the ready-to-eat (R.-T.-E.) cereal  business in connection with the reclassification to assets held for sale to account for the difference between the net book value of the assets and the anticipated proceeds,” said Matthew J. Foulston, chief financial officer.

TreeHouse Foods agreed to sell its ready-to-eat cereal business to Post Holdings, Inc., St. Louis, on July 23. Closing of the transaction has been delayed due to concerns raised by the Federal Trade Commission.

Starting in the third quarter both the Snacks and R.-T.-E. cereal businesses will be classified as discontinued operations. Despite the change, management does not expect a strong third quarter.

Sales during the quarter are expected to be in the range of $1.04 billon and $1.14 billion, a decline compared to the same period of the previous year. Weaker sales in the Baked Goods and Meal Solutions business units were cited as the reason.

“As we look forward, we’re guiding to a third quarter decline that is approaching flat, while our fourth quarter is expected to be up slightly,” Mr. Foulston said. “The fourth quarter year-over-year dollars sales growth is expected to be modest. However, we believe the most important take away here is that we’re moving in the right direction and we’re delivering sequential improvement in our year-over-year comparisons.

“With the majority of our announced portfolio optimization efforts nearing completion, we continue to believe that beyond 2019, for the next few years, we can grow the top line of our business of 1% to 2% organically, deliver 10% or more e.p.s. growth and about $300 million in cash generation on an annual basis.”

For the first six months of the fiscal year, TreeHouse Foods recorded a loss of $198.7 million, which compared with a loss of $53.1 million during the first half of fiscal 2018.

Sales fell to $2,551.8 billion from $2,937 billion during the period.