The hostess updates the year-end forecast.
Hostess Brands, Inc. increased its forecast for the fiscal year after benefiting from increased consumer mobility and persistently high levels of at-home snacking in the second quarter.
Executives at the Kansas City-based company now anticipate profits per share of 83¢ to 87¢, up from 80½ to 85¢ in the previous outlook, and adjusted net revenue growth of 7.5% to 9%, up from a previous guidance of 3% to 4.5%.
Andrew P. Callahan, president and chief executive officer, stated during a conference call with analysts on August 4 that Hostess observed sales growth across both single-serve and multi-pack offers in addition to gaining market share in the supermarket and convenience channels.
“We’re seeing better on-the-go and immediate consumption sales as a result of increased mobility,” he stated. “There are still a lot of consumers in the home, even with the return of that mobility. Customers nibble more when they spend more time at home.
Hostess’s net income increased by 10.3% to $32.2 million, or 23¢ per share, on common stock for the second quarter that ended on June 30 from $29.2 million, or 22¢ per share, for the same period the previous year. Between the two years, net income increased by 25%. Sales rose 12% from $256.2 million two years ago and nearly 11% to $291.5 million from $265.4 million the previous year.
Due to growth in the convenience and grocery channels, Hostess recorded a 21.8% market share in the sweet baked goods category for the second quarter.
The convenience channel saw an almost 325 basis point gain in the company’s market share, reaching 29.9%. With Hostess, its market share in the supermarket channel climbed by roughly 180 basis points to 15.7%.posting 5.4% point-of-sale-growth in the channel, despite lapping strong COVID-driven growth last year. Sales of single-serve offerings grew 19.4% year-over-year and 15.4% on a two-year basis, while the company’s multipack business was up 5.4% from 2020 and 24.2% from 2019.
During the quarter, sales of morning pastries and donuts under the Hostess brand increased by 35% and 12%, respectively. The business gained from new breakfast products as well, such as the recently introduced Baby Bundt cakes.
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“We’re seeing great success across a number of channels with Baby Bundts, one of our breakfast innovation items,” Mr. Callahan stated. “In fact, over the last four weeks ending July 17, Baby Bundts Lemon and Baby Bundts Cinnamon were the No. 1 and No. 4 fastest-growing SKUs in the category across the entire Nielsen Universe.”
Other new breakfast offerings are Pecan Spins and Muff’n Stix. Later this year, new Baby Bundt tastes are anticipated to launch, which should maintain the trend for new products, according to Mr. Callahan.Additionally, we’ll be launchinga number of other new products, including On-The-Go versions of Cr!spy Minis in the coming months,” he said.