Tootsie Roll Industries Reports 6.3% Decrease in Net Product Sales for Fiscal Year 2024

Tootsie Roll Industries, Inc. reported a decrease in net product sales for the fiscal year ending December 31, 2024, totaling $715.5 million, down from $763.3 million in 2023, marking a decline of 6.3%. The company's earnings attributable to Tootsie Roll decreased to $86.8 million, or $1.22 per share, compared to $91.9 million, or $1.28 per share, in the previous year. The decline in sales and profitability was attributed to lower sales volumes as customers and consumers became more resistant to price increases implemented to restore margins affected by rising input costs.

In terms of operational metrics, Tootsie Roll's cost of goods sold decreased to $468.1 million in 2024 from $510.7 million in 2023, reflecting a reduction of 8.4%. The company reported improvements in gross profit margins, which benefited from enhanced manufacturing efficiencies, despite the challenges posed by lower sales volumes. Selling, marketing, and administrative expenses also saw a slight decrease, totaling $152.7 million in 2024 compared to $155.0 million in 2023. However, these expenses increased as a percentage of net product sales due to the decline in sales volume.

Strategically, Tootsie Roll continues to focus on managing its input costs through price adjustments and operational efficiencies. The company has also been actively engaged in hedging its major ingredient requirements, particularly sugar, to mitigate price volatility. As of December 31, 2024, Tootsie Roll's total cash, cash equivalents, and investments amounted to $527.0 million, an increase from $427.0 million in 2023, indicating a strong liquidity position. The company employed approximately 2,300 full-time employees, with seasonal hiring to meet production demands during peak sales periods, particularly around Halloween.

Looking ahead, Tootsie Roll anticipates continued challenges in the market, particularly with rising cocoa and chocolate costs expected in 2025 as existing supply contracts expire. The company remains cautious about passing these costs onto consumers, which could further impact sales volumes. Despite these challenges, Tootsie Roll is committed to investing in its manufacturing operations to enhance product quality and expand capacity, aiming to provide value to consumers while navigating the competitive confectionery landscape.