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Jun 30, 2020
Tootsie Roll Q2 2020 Earnings Report
Net sales and net earnings decreased due to the Covid-19 pandemic.
Key Takeaways
Tootsie Roll Industries reported a decrease in net sales and net earnings for the second quarter of 2020, primarily due to the adverse effects of the Covid-19 pandemic, which led to closures of businesses and changes in consumer shopping habits.
Second quarter net sales decreased by 25% to $79,796,000 compared to $106,021,000 in 2019.
Second quarter net earnings decreased to $7,388,000 from $11,556,000 in the prior year.
Net earnings per share decreased by 35% to $0.11 compared to $0.17 in 2019.
Sales decline and lost profit margin were the principal drivers of the decline in net earnings.
Tootsie Roll
Tootsie Roll
Forward Guidance
The company anticipates that the adverse trends experienced in the second quarter of 2020 will continue to affect net earnings in the third and fourth quarters of 2020.
Positive Outlook
- The Company is well positioned to return to higher sales and profits when the adverse effects of the Covid-19 pandemic subside.
- We are focused on the longer term.
- We are continuing to make investments in plant manufacturing operations to meet new consumer and customer demands.
- Achieve product quality improvements.
- Increase operational efficiencies and provide genuine value to consumers.
Challenges Ahead
- The Company has continued to experience declines in customer orders and sales in third quarter 2020.
- This trend is expected to adversely affect net earnings in third quarter 2020
- This trend is likely to affect net earnings in fourth quarter 2020 as well.
- The effects of Covid-19 pandemic are unprecedented.
- The Company is unable to determine its effects on its sales and net earnings for the balance of 2020