Net revenue

Hostess Brands’ Second Quarter Delivers Double-Digit Net Revenue Growth on Market Share Expansion

Hostess Brands Inc. (Nasdaq: TWNK, TWNKW), based in Lenexa, KS, reported net revenue of $291.5 million in the second quarter of 2021, an increase of 13.8%, or 35, $3 million, compared to $256.2 million for the same period last year.

Adjusted net income was $291.5 million, an increase of 10.8%, compared to $263 million in the same period of the previous year. The growth in adjusted net revenues was primarily attributable to net revenues from sweet bakery products, which increased by $29.9 million or 12.9%. This growth was driven by double-digit point-of-sale growth in the grocery, dollar and convenience chains, with continued momentum in single-serve products and innovation. Voortman POS trends remained strong with growth of 23.7% in the quarter.

Gross profit amounted to $105.1 million, or 36.1% of net revenues, compared to 34.9% in the same period last year.

KEY POINTS

  • Net revenues of $291.5 million increased by 13.8%. Adjusted net revenue was $291.5 million, an increase of 10.8% over the same period last year, reflecting the strong performance of Hostess branded products in the convenience, groceries and a dollar.
  • 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-over-year comparison as we topped 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 increased $0.23 from $0.22 in the same period a year ago.
  • Adjusted EBITDA increased by 5.1% to $68.4 million, or 23.5% of adjusted net income. The increase is primarily due to higher Hostess® brand sales, a favorable product mix and operational efficiencies that more than offset inflation and investments made for future growth.
  • Cash and cash equivalents were $218.8 million as of June 30, 2021. The net leverage ratio decreased to 3.4x due to improved cash flow from operations.
  • Raising full-year 2021 guidance for revenue growth to 7.5%-9.0% and Adjusted EBITDA to $260m-$268m.

“We had another excellent quarter with double-digit net sales growth as our investments for growth pay off. Our revenue remains strong while outpacing the filling of the Voortman pipeline from 2020. Our point-of-sale growth and market share gains in the breakfast, snack and biscuit consumer segments day are driven by strong new product innovation and strong execution as we leverage our extensive distribution strength across all channels,” commented Hostess President and CEO Andy Callahan.