Vending

Hostess Brands lifts Q2 2023 revenue, earnings

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August 9, 2023

Hostess Brands Inc. lifted its Q2 2023 revenue and income over the prior year period and reaffirmed its full year guidance, according to an earnings release.

Highlights include:

• Net revenue rose 3.5% from $340.5 million in Q2 2022 to $352.4 million in the quarter ending June 30, 2023, as 10.4% contribution from price/mix more than offset lower volume in the quarter.
• Net income rose from $30.5 million to $32.5 million in the comparative quarters.
• EPS on both a basic and diluted basis rose from 22 cents to 24 cents.
• Adjusted EPS rose from 22 cents to 28 cents.
• The company's sweet baked goods point-of-sale business increased 2.9% for the quarter, 18.5% on a two-year stacked basis.
• Voortman branded POS business grew 7.2% in the quarter, 32.2% on a two-year stacked basis.

Shares traded today at $23.16 against a 52-week range of $21.59-$29.

The $352.4 million in quarterly revenue missed analyst expectations by $6.68 million and the GAAP EPS of 24 cents missed expectations by 2 cents, according to Seeking Alpha.

"Hostess Brands delivered another strong quarter with double-digit profit growth and higher margins driven by favorable net price realization, normalizing supply chain and contributions from productivity initiatives," Andy Callahan, president and CEO, said in the press release. "We are executing well against our growth initiatives with strong customer support behind back-to-school merchandising, leading innovation in the category and increased investment in our brands, which provide confidence in our ability to generate stronger sales growth in the second half of 2023."

The company reaffirmed its full year guidance for net revenue growth from 4%-6% and its adjusted diluted EPS of $1.08-$1.13.