Tootsie Roll Industries Reports Q2 2025 Financial Results with Increased Net Earnings

Tootsie Roll Industries, Inc. reported its financial results for the second quarter and first half of 2025, revealing a modest increase in net product sales and net earnings compared to the previous year. For the quarter ended June 30, 2025, net product sales reached $153.2 million, a 2.9% increase from $148.8 million in the same quarter of 2024. However, year-to-date sales showed a slight decline, totaling $299.7 million compared to $300.3 million in the first half of 2024. The company attributed the quarterly growth to successful marketing initiatives, although it noted challenges in the market as consumers became more resistant to price increases.

The company's profitability also improved, with net earnings attributable to Tootsie Roll Industries, Inc. increasing to $17.5 million, or $0.24 per share, in the second quarter of 2025, compared to $15.6 million, or $0.21 per share, in the prior year. Year-to-date net earnings rose to $35.6 million, or $0.49 per share, from $31.5 million, or $0.43 per share, in the first half of 2024. The increase in earnings was supported by a reduction in product costs, which fell to $98.1 million in the second quarter from $99.7 million a year earlier, reflecting improved manufacturing efficiencies and cost management.

In terms of operational developments, Tootsie Roll's domestic sales represented a significant portion of total sales, accounting for 93.8% in the second quarter of 2025. However, foreign sales experienced a decline, with a 16.8% drop in the second quarter compared to the previous year. The company continues to face challenges related to elevated cocoa and chocolate prices, which are expected to impact gross profit margins in the latter half of 2025 and into 2026 as older supply contracts expire.

The company’s balance sheet showed total assets of $1.18 billion as of June 30, 2025, an increase from $1.10 billion a year prior. Current assets also rose to $364.8 million, up from $323.9 million in June 2024. Tootsie Roll's current ratio improved to 4.0, indicating strong liquidity. The company has also been active in managing its capital structure, with share repurchases totaling $6.5 million in the first half of 2025, contributing to a reduction in average shares outstanding.

Looking ahead, Tootsie Roll Industries anticipates continued pressure from rising input costs, particularly in cocoa and chocolate, and is focused on maintaining its pricing strategy to recover margins. The company is also pursuing a plant expansion to enhance production capabilities, with expected capital expenditures of approximately $95 million to $100 million over the next five years. Management remains cautious about the potential impacts of tariffs and market conditions on future operations, emphasizing the need for strategic adjustments in response to evolving market dynamics.