Tootsie Roll Industries Inc.: Q3 FY2025 earnings call

What management said about Q3 FY2025, from the documents filed with the SEC on 23 October 2025: press release. The quarter’s numbers.

Key takeaways

Quarter sales rose 3%: Net sales were $230,614,000, up $6,723,000 or 3% from $223,891,000. Net earnings were $35,659,000 against $32,844,000 a year earlier. Source
Earnings per share rose 9%: Net earnings per share were $0.49 against $0.45 a year earlier, an increase of $0.04 or 9%. Source
Consumers resisted higher prices: Management said customers and consumers became more resistant to higher prices, which had some adverse effect on sales in the first nine months. Source
Cocoa and chocolate costs elevated: Cocoa and chocolate costs remain at significantly elevated levels compared with historical prices, and certain ingredient and packaging unit costs rose in nine months 2025 versus 2024. Source
Margins helped by pricing and efficiency: Gross margins benefited in the third quarter and nine months from higher price realization, plant operating efficiencies and certain cost reductions. Source
LIFO magnifies input cost pressure: Because the company uses LIFO inventory accounting, higher input costs, including cocoa and chocolate, put increasing pressure on gross margins this year. Source
Bond accretion added to other income: Other income rose on a favorable $3.4 million cumulative after-tax adjustment to record bond accretion on discounted bonds not previously reported. Source
Tariff effect not yet determinable: Management said it cannot yet determine the effect of tariffs on the business until more clarity on tariffs and possible retaliatory tariffs is available. Source

“Although we made progress in restoring our margins in third quarter and nine months 2025, certain ingredients and packaging materials unit costs, particularly cocoa and chocolate, have increased in nine months 2025 compared to 2024.”
Ellen R. Gordon, Chairman

What changed from last quarter

New: Other income in the third quarter included a favorable $3.4 million cumulative after-tax adjustment for bond accretion not previously reported on discounted bonds. Source

Third quarter results

Quarter sales rose 3%: Net sales were $230,614,000, up $6,723,000 or 3% from $223,891,000. Net earnings were $35,659,000 against $32,844,000 a year earlier. Source
Earnings per share rose 9%: Net earnings per share were $0.49 against $0.45 a year earlier, an increase of $0.04 or 9%. Source
Pre-Halloween programs aided sales: Management credited successful marketing and sales programs, including pre-Halloween sales programs, for higher third quarter sales than the prior year quarter. Source
Nine-month sales rose 1%: Nine-month net sales were $530,325,000, up $6,151,000 or 1%. Nine-month net earnings were $71,261,000, and EPS was $0.98 against $0.87. Source

Pricing and consumer demand

Consumers resisted higher prices: Management said customers and consumers became more resistant to higher prices, which had some adverse effect on sales in the first nine months. Source
Price increases offset input costs: Price increases were implemented to offset input cost increases and recover margin declines. Management said it made progress restoring margins in the third quarter and nine months. Source
Limits on passing costs to customers: Management said it weighs the effects and limits of passing higher input costs on to customers and final consumers. Source

“Many companies in the consumer products industry have increased selling prices in order to improve price realization in response to increasing input costs in recent years.”
Ellen R. Gordon, Chairman

Input costs and gross margin

Cocoa and chocolate costs elevated: Cocoa and chocolate costs remain at significantly elevated levels compared with historical prices, and certain ingredient and packaging unit costs rose in nine months 2025 versus 2024. Source
Margins helped by pricing and efficiency: Gross margins benefited in the third quarter and nine months from higher price realization, plant operating efficiencies and certain cost reductions. Source
LIFO magnifies input cost pressure: Because the company uses LIFO inventory accounting, higher input costs, including cocoa and chocolate, put increasing pressure on gross margins this year. Source

Other income and tax rate

Bond accretion added to other income: Other income rose on a favorable $3.4 million cumulative after-tax adjustment to record bond accretion on discounted bonds not previously reported. Source
Investment income and insurance recoveries: Net earnings also rose on higher investment income from marketable securities and insurance recoveries. Source
Effective tax rate rose: Effective tax rates were 26.7% in the third quarter and 27.2% for nine months, against 22.6% and 22.4% a year earlier. Management attributed the rise to deferred compensation not deductible when paid. Source

Tariffs and cross-border sourcing

Tariffs added to non-USMCA input costs: Cocoa, chocolate, edible oils and some packaging have foreign origins outside USMCA, and related higher tariffs added to costs in the third quarter and nine months. Source
Tariff effect not yet determinable: Management said it cannot yet determine the effect of tariffs on the business until more clarity on tariffs and possible retaliatory tariffs is available. Source
USMCA covers Canada and Mexico trade: Operations and sales are principally in North America, and cross-border trade with Canada and Mexico qualifies under the USMCA free-trade agreement. Source

Plant investment

Continued plant investment: Management said it continues long-term investment in plant manufacturing to meet new customer and consumer demands, improve quality, add capacity and raise efficiency. Source

Share count and capital

Buybacks reduced share count: Earnings per share benefited from open-market stock purchases over the preceding twelve months, leaving fewer shares outstanding than a year earlier. Source
Per-share figures adjusted for stock dividend: Share and per-share figures are adjusted for 3% stock dividends distributed April 4, 2025 and April 5, 2024. Source

Coming up, as management said on 23 October 2025

Higher ingredient costs into 2026: Management expects higher ingredient costs to continue in fourth quarter 2025 and into 2026, as many older lower-priced supply contracts expired in early 2025. Source

Risks management discussed

Regulatory: Some ingredients and packaging have foreign origins outside USMCA, so tariffs on these purchases increase costs. Source
External: Cocoa and chocolate prices remain elevated against historical levels, raising input costs. Source
Demand: Customers and consumers have shown resistance to higher prices, which affected sales in the first nine months. Source
Financial: Higher input costs under LIFO accounting have pressured gross profit margins this year. Source

Earlier plans management reported on

Not stated: The company implemented price increases to mitigate input cost increases and recover margin declines. Source
Not stated: Management said it is continuing plant manufacturing investments aimed at customer demands, quality, capacity and efficiency. Source

Other quarters

Summarised with AI from the documents the company filed with the SEC. Every point is checked against the filing before it is shown: management’s own words word for word, figures against the line or table row they come from. A point that fails the check is left out. Source opens the filing at that line.

As filed with the SEC

Open the filing on EDGAR

TOOTSIE ROLL INDUSTRIES, INC.

7401 South Cicero Avenue

Chicago, IL 60629

Phone 773/838-3400

Fax 773/838-3534

STOCK TRADED: NYSE	FOR IMMEDIATE RELEASE
TICKER SYMBOL: TR	Wednesday, October 22, 2025

CHICAGO, ILLINOIS - October 22, 2025 - Ellen R. Gordon, Chairman, Tootsie Roll Industries, Inc. reported third quarter and nine months 2025 net sales and net earnings.

Third quarter 2025 net sales were $230,614,000 compared to $223,891,000 in third quarter 2024, an increase of $6,723,000 or 3%. Third quarter 2025 net earnings were $35,659,000 compared to $32,844,000 in third quarter 2024, and net earnings per share were $0.49 and $0.45 in third quarter 2025 and 2024, respectively, an increase of $0.04 per share or 9%.

Nine months 2025 net sales were $530,325,000 compared to $524,174,000 in nine months 2024, an increase of $6,151,000 or 1%. Nine months 2025 net earnings were $71,261,000 compared to $64,318,000 in nine months 2024, and net earnings per share were $0.98 and $0.87 in nine months 2025 and 2024, respectively, an increase of $0.11 per share or 13%.

Mrs. Gordon said, “Successful marketing and sales programs, including pre-Halloween sales programs, contributed to higher sales in third quarter 2025 compared to the prior year third quarter. We continued to face some challenges in nine months 2025 as customers and consumers became more resistant to higher prices, and these headwinds had some adverse effect on sales in nine months 2025.

Many companies in the consumer products industry have increased selling prices in order to improve price realization in response to increasing input costs in recent years. We have implemented price increases as well during this period in order to mitigate certain input cost increases and recover our margin declines. Although we made progress in restoring our margins in third quarter and nine months 2025, certain ingredients and packaging materials unit costs, particularly cocoa and chocolate, have increased in nine months 2025 compared to 2024. Cocoa and chocolate markets continue at significantly elevated levels compared to historical prices in past years. We have experienced continuing higher costs for these ingredients during 2025 and expect this to continue in fourth quarter 2025 and into 2026 because many of our older supply contracts at lower prices expired in early 2025. Although the Company continues to monitor its input costs, we are mindful of the effects and limits when passing on the above-discussed higher input costs to our customers as well as the final consumers of our products.

Third quarter and nine months 2025 gross profit margins benefited from higher price realization, improvements in plant manufacturing operating efficiencies, and certain cost reductions. The Company uses the Last-In-First-Out (LIFO) method of accounting for inventory and costs of goods sold which generally results in lower current net earnings and income taxes during such periods of increasing costs and higher inflation. As a result, the above discussed higher input costs, including cocoa and chocolate, have had increasingly adverse effects on our gross profit margins this year.

Third quarter and nine months 2025 net earnings benefited from increased Other income, net which includes a favorable $3.4 million cumulative after-tax adjustment to record bond accretion not previously reported on certain bonds purchased at a discount in the Company’s investment portfolio. Third quarter and nine months 2025 net earnings also benefited from increased investment income from the Company’s investments in marketable securities as well as insurance recoveries. The Company’s effective income tax rates were 26.7% and 22.6% in third quarter 2025 and 2024 respectively, and 27.2% and 22.4% in nine months 2025 and 2024, respectively. These higher effective tax rates in third quarter and nine months 2025 principally reflect the adverse effect of certain deferred compensation that will not be deductible for income taxes when paid in future periods. Earnings per share did benefit from stock purchases in the open market over the preceding twelve months resulting in fewer shares outstanding in third quarter and nine months 2025 compared to the corresponding periods in 2024.

Our operations and sales are principally in North America, and our cross-border transactions with Canada and Mexico qualify under the USMCA free-trade agreement. Certain ingredients, including cocoa, chocolate and edible oils, as well as some packaging and other purchases, do have foreign origins outside of USMCA and the related higher tariffs on these purchases added to our costs in third quarter and nine months 2025. Until such time that more clarity regarding tariffs, as well as possible retaliatory tariffs, is forthcoming, we are not able to ascertain the effects of tariffs on our business.

We are focused on the longer term and therefore are continuing to make investments in plant manufacturing operations to meet new customer and consumer product demands, achieve product quality improvements, expand capacity in certain product lines, and increase operational efficiencies in order to provide genuine value to consumers.”

Safe Harbor Statement

Forward-looking statements notice

This release contains forward-looking statements that are based largely on the Company’s current expectations and are made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by the use of words such as “anticipated,” “believe,” “expect,” “intend,” “estimate,” “project,” “plan” and other words of similar meaning in connection with a discussion of future operating or financial performance and are subject to certain factors, risks, trends and uncertainties that could cause actual results and achievements to differ materially from those expressed in the forward-looking statements. Such factors, risks, trends and uncertainties, which in some instances are beyond the Company’s control, include the effects of U.S. tariffs as well as retaliatory tariffs and other import fees and surcharges by other countries, the overall competitive environment in the Company’s industry, the ability to recover increases in input costs and tariffs through price increases, successful distribution and sell-through during Halloween and other seasons, and changes in assumptions, judgments and risk factors discussed in our Annual Report on Form 10-K for the year ended December 31, 2024.

The risk factors referred to above are believed to be significant factors, but not necessarily all of the significant factors that could cause actual results to differ from those expressed in any forward-looking statement. Readers are cautioned not to place undue reliance on such forward-looking statements, which are made only as of the date of this report. The Company undertakes no obligation to update such forward-looking statements.

TOOTSIE ROLL INDUSTRIES, INC.

CONSOLIDATED SUMMARY OF SALES & EARNINGS

FOR THE PERIODS ENDED

September 30, 2025 and 2024

	Third Quarter Ended
	2025	2024
Net Sales	$230,614,000	$223,891,000
Net Earnings	$35,659,000	$32,844,000
Net Earnings Per Share*	$0.49	$0.45
Average Shares Outstanding*	72,879,000	73,497,000

	Nine Months Ended
	2025	2024
Net Sales	$530,325,000	$524,174,000
Net Earnings	$71,261,000	$64,318,000
Net Earnings Per Share*	$0.98	$0.87
Average Shares Outstanding*	72,910,000	73,520,000

* Based on average shares outstanding adjusted for 3% stock dividends distributed April 4, 2025 and April 5, 2024.