Hostess Brands’ Q2 sees double-digit net revenue growth driven by market share expansion

Aug. 5, 2021

Lenexa, KS-based Hostess Brands Inc. (Nasdaq: TWNK, TWNKW) reported 2021 second-quarter net revenue of $291.5 million, an increase of 13.8%, or $35.3 million, compared with $256.2 million for same period last year. 

Adjusted net revenue was $291.5 million, an increase of 10.8%, compared with $263 million in the prior year period. Adjusted net revenue growth was primarily driven by sweet baked goods net revenue, which increased $29.9 million or 12.9%. This growth was driven by double-digit POS growth in grocery, dollar and convenience channels with continued momentum of single-serve products and innovation. Voortman POS trends remained strong with 23.7% growth in the quarter.

Gross profit was $105.1 million, or 36.1% of net revenue, compared with 34.9% in the same period last year.

KEY POINTS

  • Net revenue of $291.5 million increased 13.8%. Adjusted net revenue was $291.5 million, an increase of 10.8% from the same period last year, reflecting strong Hostess-branded products performance in the convenience, grocery and dollar channels.
  • Gross profit was $105.1 million, an increase of 17.6%. On an adjusted basis, gross profit increased 7.3% overcoming rising inflation and a difficult year on year comparison as we lapped the Voortman pipeline fill.
  • Net income was $29.8 million or $0.21 per diluted share. Adjusted net income increased 10.3% to $32.2 million and adjusted EPS of $0.23, compared with $0.22 in the prior year period.
  • Adjusted EBITDA increased 5.1% to $68.4 million, or 23.5% of adjusted net revenue. The increase was driven primarily by higher Hostess® branded sales, favorable product mix and operating efficiencies more than offsetting inflation and investments made for future growth.
  • Cash and cash equivalents were $218.8 million as of June 30, 2021. Net leverage ratio declined to 3.4x driven by improved operating cash flow.
  • Raising full year 2021 guidance for revenue growth to 7.5%–9.0% and adjusted EBITDA to $260 million–$268 million.

“We had another excellent quarter marked by double-digit net revenue growth as our investments for growth are paying off. Our top-line remains strong while lapping the Voortman pipeline fill from 2020. Our category-leading point-of-sale growth and market share gains within the breakfast, all-day snacking and cookies consumer segments are driven by robust new product innovation and strong execution as we leverage our broad-based distribution strength across channels,” commented Hostess president and chief executive Andy Callahan.

Related

[Credit: Hostess Brands LLC]
Hostess New Breakfast Hero
Confections, cookies, pastries

Hostess introduces novel breakfast items in convenience packaging

June 9, 2021
Hostess Brands LLC is shaking up breakfast by bringing form and function to convenient, on-the-go snacking with three new breakfast items. New Hostess Muff’n Stix, Pecan Spins...
[Credit: Hostess Brands Inc.
Hostess Logo Flag New
Management

Hostess reports strong Q1 2021 financial results

May 18, 2021
Net revenue growth of 9% and 163 basis points of market share expansion reaffirm company's full-year 2021 outlook