Tootsie Roll Industries Inc.: Q1 FY2026 earnings call

What management said about Q1 FY2026, from the documents filed with the SEC on 23 April 2026: press release. The quarter’s numbers.

Key takeaways

Sales increased 2% year-over-year: First quarter 2026 net sales were $149.488 million compared to $146.521 million in Q1 2025, an increase of $2.967 million or 2%. Source
Marketing and sales programs drove growth: Management attributed the sales increase to successful marketing and sales programs that contributed to higher sales compared to the prior year period. Source
Cocoa and chocolate costs significantly higher: Gross profit margins were adversely affected by significantly higher cocoa and chocolate unit costs in Q1 2026 compared to Q1 2025, reducing profitability. Source
Commodity prices retreated but remain elevated: Cocoa commodities markets have retreated from extraordinarily high 2025 price levels but prices still remain above historical levels, continuing to pressure input costs. Source
Margin relief expected late 2026 and 2027: As lower commodity prices are reflected through the supply chain, management expects to realize lower cocoa and chocolate costs beginning in late 2026 and continuing into 2027. Source
Net earnings fell year-over-year: Net earnings were $17.661 million in Q1 2026 versus $18.058 million in Q1 2025, declining $397,000 or 2.2% despite 2% sales growth. Source
Multiple pressures offset sales growth: Earnings declined due to margin pressure from commodity costs, increased trade promotions, and unfavorable international results that outweighed the benefits of 2% sales growth. Source

“Successful marketing and sales programs contributed to higher sales in first quarter 2026 compared to the prior year comparative period.”
Ellen R. Gordon, Chairman

Sales Growth from Marketing Programs

Sales increased 2% year-over-year: First quarter 2026 net sales were $149.488 million compared to $146.521 million in Q1 2025, an increase of $2.967 million or 2%. Source
Marketing and sales programs drove growth: Management attributed the sales increase to successful marketing and sales programs that contributed to higher sales compared to the prior year period. Source
Trade promotions and distribution support continued: The company continued to support its brands and drive distribution with trade promotions and other marketing support activities during the quarter. Source

Commodity Costs Pressured Gross Margins

Cocoa and chocolate costs significantly higher: Gross profit margins were adversely affected by significantly higher cocoa and chocolate unit costs in Q1 2026 compared to Q1 2025, reducing profitability. Source
Commodity prices retreated but remain elevated: Cocoa commodities markets have retreated from extraordinarily high 2025 price levels but prices still remain above historical levels, continuing to pressure input costs. Source
Margin relief expected late 2026 and 2027: As lower commodity prices are reflected through the supply chain, management expects to realize lower cocoa and chocolate costs beginning in late 2026 and continuing into 2027. Source
Company constrained in passing costs through: Management is mindful of the effects and limits when passing higher input costs to customers and consumers, which constrains the ability to fully recover margin pressure through pricing. Source

“Although the Company continues to monitor its input costs, we are mindful of the effects and limits when passing on higher input costs to our customers as well as the final consumers of our products.”
Ellen R. Gordon, Chairman

Earnings Declined Despite Sales Growth

Net earnings fell year-over-year: Net earnings were $17.661 million in Q1 2026 versus $18.058 million in Q1 2025, declining $397,000 or 2.2% despite 2% sales growth. Source
EPS remained flat year-over-year: Earnings per share were $0.24 in both Q1 2026 and Q1 2025, unchanged despite earnings decline, reflecting lower share count from buybacks and dividends. Source
Multiple pressures offset sales growth: Earnings declined due to margin pressure from commodity costs, increased trade promotions, and unfavorable international results that outweighed the benefits of 2% sales growth. Source

Tax Rate Increased from Deferred Compensation

Effective tax rate rose significantly: The effective income tax rate increased to 25.1% in Q1 2026 from 21.6% in Q1 2025, an increase of 3.5 percentage points that reduced reported earnings. Source
Deferred compensation reduced tax deduction: The higher effective tax rate in Q1 2026 principally reflects the adverse effect of certain deferred compensation that will not be deductible for income taxes when paid in future periods. Source
Tax increase materially impacted results: The 3.5 percentage point increase in effective tax rate was a significant negative factor for Q1 2026 earnings compared to the prior year period. Source

Investment Income and International Results

Investment income benefited Q1 results: First quarter 2026 net earnings benefited from increased investment income generated from the company's investments in marketable securities. Source
Unfavorable international results pressured earnings: First quarter results were adversely affected by unfavorable international results, indicating challenges in non-domestic operations offset some of the investment income benefits. Source

Manufacturing Investments and Operational Strategy

Continuing investments in plant operations: The company is continuing to make investments in plant and manufacturing operations focused on the longer term value creation and operational improvements. Source
Investments target multiple strategic objectives: Manufacturing investments are aimed at meeting new customer and consumer demands, achieving quality improvements, expanding capacity in certain product lines, and increasing operational efficiencies. Source
Providing genuine value to consumers: The strategic objective of manufacturing investments is to provide genuine value to consumers through improved products and operations. Source

Coming up, as management said on 23 April 2026

Cocoa cost relief expected: Management expects lower cocoa and chocolate costs to begin flowing through the supply chain in late 2026 and continue into 2027 as commodity prices normalize. Source

Figures management reported

Figure	Reported
Net Sales Source	$149.488 million
Net Earnings Per Share Source	$0.24

Risks management discussed

Demand: Cocoa commodities remain elevated above historical levels despite retreating from 2025 highs, creating ongoing exposure to higher input costs in the near term before relief materializes. Source
Operational: Unfavorable international results adversely affected Q1 2026 earnings, indicating geographic and operational challenges in non-domestic markets. Source
Financial: Company faces limits in its ability to pass through higher input costs to customers and consumers, constraining margin recovery potential from commodity cost increases. Source

Earlier plans management reported on

On track: Management reiterated its expectation from the prior quarter that lower cocoa and chocolate costs will be realized as commodity prices flow through the supply chain in late 2026 and into 2027. 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, April 22, 2026

CHICAGO, ILLINOIS - April 22, 2026 - Ellen R. Gordon, Chairman, Tootsie Roll Industries, Inc. reported first quarter 2026 net sales and net earnings.

First quarter 2026 net sales were $149,488,000 compared to $146,521,000 in first quarter 2025, an increase of $2,967,000 or 2%. First quarter 2026 net earnings were $17,661,000 compared to $18,058,000 in first quarter 2025, and net earnings per share were $0.24 in both first quarter 2026 and 2025.

Mrs. Gordon said, “Successful marketing and sales programs contributed to higher sales in first quarter 2026 compared to the prior year comparative period. We continue to support our brands and drive distribution with trade promotions and other marketing support activities.

First quarter 2026 gross profit margins were adversely affected by significantly higher cocoa and chocolate unit costs, when compared to first quarter 2025. Cocoa commodities markets have retreated from their extraordinarily high price levels in 2025, but still remain above historical levels. As these lower costs begin to be reflected in our supply chain costs, we should realize lower cocoa and chocolate costs in late 2026 and into 2027. Although the Company continues to monitor its input costs, we are mindful of the effects and limits when passing on higher input costs to our customers as well as the final consumers of our products. First quarter results were also adversely affected by unfavorable international results as well as increased trade promotions.

First quarter 2026 net earnings did benefit from increased investment income from the Company’s investments in marketable securities. The Company’s effective income tax rates were 25.1% and 21.6% in first quarter 2026 and 2025, respectively, and therefore the higher effective tax in first quarter 2026 adversely affected first quarter 2026 results when compared to first quarter 2025. The higher tax rate in first quarter 2026 principally reflects the adverse effect of certain deferred compensation that will not be deductible for income taxes when paid in future periods.

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, 2025.

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

March 31, 2026 and 2025

	First Quarter Ended
	2026	2025
Net Sales	$149,488,000	$146,521,000
Net Earnings	$17,661,000	$18,058,000
Net Earnings Per Share*	$0.24	$0.24
Average Shares Outstanding*	75,060,000	75,138,000

* Based on average shares outstanding adjusted for 3% stock dividends distributed April 3, 2026 and April 4, 2025.