Tootsie Roll Industries reported third-quarter 2024 net sales of $223.9 million, a 10% decrease from $248.3 million in the third quarter of 2023. Net earnings for the quarter also declined to $32.8 million, or $0.46 per share, compared to $34.4 million, or $0.48 per share, in the prior year period. Management attributed the sales decline primarily to increased customer and consumer resistance to higher price realization efforts.
For the nine months ended September 30, 2024, net sales decreased by 8% to $524.2 million from $567.9 million in the same period of 2023. Despite the sales pressure, net earnings for the nine-month period increased to $64.3 million, or $0.90 per share, from $62.5 million, or $0.87 per share, in 2023. This improvement in nine-month earnings was supported by increased investment income, higher leasing revenue, and favorable foreign exchange rates.
Gross profit margins in both the third quarter and nine-month periods benefited from higher price realization and improvements in plant manufacturing operating efficiencies. However, lower sales volumes negatively impacted results as many plant overhead costs and certain other operating expenses did not decrease proportionally. The company also noted that earnings per share benefited from stock repurchases over the preceding twelve months, which resulted in fewer shares outstanding.
Management indicated that cocoa and chocolate costs have risen significantly in the markets this year, and these increases are expected to continue to adversely affect input costs and margins in the fourth quarter of 2024 and into 2025. The company is monitoring input costs but remains mindful of the limits when passing these higher costs on to customers and consumers. Tootsie Roll Industries is continuing investments in plant manufacturing operations to meet new demands, improve product quality, expand capacity, and increase operational efficiencies.
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