Hostess second-quarter earnings dip under pressure
Source Food Business News
Even as the company continued to gain market share in the sweet
baked foods category, earnings were under significant pressure in the
second quarter at Hostess Brands, Inc.
Net income at Hostess in the three months ended June 30 was
$24,620,000, equal to 19c per share on the common stock, down 13% from
$28,207,000, or 19c per share, in the second quarter of 2017. Sales were
$215,849,000, up 6% from $203,178,000.
Adjusted EBITDA in the second quarter was $47.6 million, down 25% from $63.2 million.
“The decreases in adjusted earnings per share and adjusted EBITDA
were primarily attributable to higher costs as a result of the
integration of the Chicago bakery and higher transportation costs and
other inflationary pressures,” Hostess said. “Reduced Hostess branded
display volume also negatively impacted adjusted EBITDA.”
In early morning trading on the Nasdaq exchange, Hostess shares
tumbled as much as 18%, trading at $11.50, down from $13.94 the previous
Andrew P. Callahan, who joined Hostess May 7 as president and chief
executive officer, said the company was caught off guard by the degree
to which cost pressures would weigh on earnings and by reduced sales to a