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Sep 30, 2020
Tootsie Roll Q3 2020 Earnings Report
Tootsie Roll Industries' Q3 2020 earnings decreased due to the Covid-19 pandemic.
Key Takeaways
Tootsie Roll Industries reported a decrease in net sales and net earnings for Q3 2020, primarily due to the adverse effects of the Covid-19 pandemic. Net sales decreased by 14%, and net earnings decreased by 16% compared to Q3 2019.
Net sales for the third quarter of 2020 were $156,962,000, a 14% decrease compared to $181,913,000 in the third quarter of 2019.
Net earnings for the third quarter of 2020 were $24,673,000, a decrease compared to $29,854,000 in the third quarter of 2019.
Net earnings per share for the third quarter of 2020 were $0.37, compared to $0.44 in the third quarter of 2019.
The decline in sales and lost profit margin was the primary driver of the decrease in net earnings, with lower sales volumes impacting plant manufacturing overhead costs and gross profit margins.
Tootsie Roll
Tootsie Roll
Forward Guidance
The company anticipates the adverse trend subsiding in fourth quarter 2020 but is unable to determine the full effects of Covid-19 on its sales and net earnings for the balance of 2020 and in 2021.
Positive Outlook
- The Company is well positioned to return to higher sales and profits when the adverse effects of the Covid-19 pandemic subside.
- Focused on the longer term.
- 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
- Due to the adverse effects of the Covid-19 pandemic on the Company’s business and the overall economy, the Company has continued to experience declines in customer orders and sales in third quarter 2020.
- This trend has had a significant adverse effect on net sales and net earnings in second and third quarter 2020.
- 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
- The Company is unable to determine its effects on its sales and net earnings in 2021.