Vending

Hostess Brands lifts Q3 2021 sales, maintains earnings

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November 10, 2021

Hostess Brands Inc. improved its Q3, 2021 revenue and maintained its earnings compared to the prior year's third quarter, according to an earnings release.

Net revenue was $288 million for the quarter ending Sept. 30, 2021, an increase of 10.4%, or $27.1 million, compared to $260.9 million, primarily driven by sweet baked goods net revenue, which increased $24.7 million or 10.6%.

This growth was led by gains in the club, dollar, convenience, drug and grocery channels with continued momentum of single-serve products driving favorable product mix.

Cookies net revenue of $29.2 million increased 9% or $2.4 million due to expanded distribution and strong point of sale growth.

Net income was $26.2 million, matching the prior year period. Adjusted net income of $28.9 million increased 14.2% from the same period last year.

Diluted earnings per share rose from 18 cents to 19 cents in the comparative quarters, while adjusted EPS rose from 19 cents to 21 cents.

The $287.96 million in quarterly revenue beat analyst expectations by $7.08 million and the non-GAAP EPS of 21 cents beat expectations by one cent and the GAAP EPS of 19 cents missed expectations by one cent, according to Seeking Alpha.

Shares traded at $18.36 today against a 52-week range of $13.25-$19.26.

"Our solid momentum continued in the third quarter enabling us to exceed our top and bottom-line expectations," Andy Callahan, president and CEO, said in the press releases. "Third quarter sales increased by 10% as strong execution across our retail network and exciting innovation generated meaningful volume growth in both Hostess and Voortman branded portfolios."

The company boosted its nine months revenue from $760.5 million to $844.8 million from the prior year. Net income declined from $108.9 million to $82.7 million in the comparable periods, while diluted EPS rose from 33 cents to 60 cents.

The company raised full year 2021 guidance for net revenue growth from 9% to 10% and reiterated adjusted EBITDA and adjusted EPS guidance of $260 million to $268 million and 83 cents to 87 cents.