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Dec 31, 2024
Tootsie Roll Q4 2024 Earnings Report
Tootsie Roll Industries, Inc. reported a decrease in fourth quarter 2024 net sales and net earnings compared to the same period in 2023.
Key Takeaways
Tootsie Roll Industries, Inc. experienced a challenging fourth quarter in 2024, with net sales decreasing by 2% to $191.36 million and net earnings falling by 22% to $22.51 million, primarily due to a nonrecurring non-cash charge from the write-off of deferred tax assets.
Fourth quarter 2024 net sales decreased by $4,012,000 (2%) to $191,356,000 compared to $195,368,000 in Q4 2023.
Fourth quarter 2024 net earnings were $22,509,000, a decrease of $6,894,000 (22%) from $29,403,000 in Q4 2023.
Net earnings per share for Q4 2024 were $0.32, down from $0.41 in Q4 2023.
The company wrote off $11,010,000 of deferred tax assets in Q4 2024, which negatively impacted net earnings.
Tootsie Roll
Tootsie Roll
Forward Guidance
Tootsie Roll Industries anticipates continued challenges from resistant customers and consumers to higher prices, and expects higher cocoa and chocolate costs in 2025 as older supply contracts expire. However, the company is focused on long-term investments in manufacturing operations to meet demand, improve quality, expand capacity, and increase operational efficiencies.
Positive Outlook
- Gross profit margins benefited from higher price realization.
- Improvements in plant manufacturing operating efficiencies contributed to gross profit margins.
- Increased investment income from marketable securities.
- Higher leasing revenue from real estate.
- More favorable foreign exchange.
Challenges Ahead
- Customers and consumers are more resistant to higher price realization.
- Lower sales volumes adversely affected results due to fixed overhead costs.
- Cocoa and chocolate costs have moved significantly higher.
- Expectation of even higher cocoa and chocolate costs in 2025.
- LIFO liquidation benefited operating and net earnings, indicating higher current costs.