Tootsie Roll Industries Inc.: Q2 FY2026 earnings call

What management said about Q2 FY2026, from the documents filed with the SEC on 23 July 2026: press release. The quarter’s numbers.

Key takeaways

Sales declined 1 percent year-over-year: Second quarter 2026 net sales were $151.9 million compared to $153.2 million in Q2 2025, down $1.2 million or 1%. First half 2026 net sales were $301.4 million versus $299.7 million in first half 2025, up 1%. Source
Earnings per share fell 22 percent: Second quarter 2026 net EPS were $0.18 versus $0.23 in Q2 2025, a decline of $0.05 or 22%. First half 2026 net EPS were $0.41 versus $0.47 in first half 2025, down 13%. Source
Trade promotions reduced reported sales: Management said higher trade promotion levels to support brands had adverse effects on reported net sales. Trade promotions are accounted for as a reduction to reported sales, creating headwind to reported figures. Source
Seasonal sales shifted from Q2 to Q3: Management attributed Q2 and first half adversity to the timing of seasonal sales between Q2 and Q3 2026 compared to prior years' corresponding quarterly periods. This timing shift was the primary driver of the quarterly underperformance. Source
Cocoa and chocolate costs remain elevated: Q2 and first half 2026 gross profit margins were adversely affected by significantly higher cocoa and chocolate unit costs compared to the corresponding 2025 periods. Cocoa commodity markets have retreated from extraordinarily high 2025 levels but remain above historical norms. Source

“Second quarter and first half 2026 were adversely impacted by the timing of sales, including seasonal sales, between second and third quarter 2026 when compared to the prior years' corresponding quarterly periods”
Ellen R. Gordon, Chairman

Second Quarter Sales and Earnings

Sales declined 1 percent year-over-year: Second quarter 2026 net sales were $151.9 million compared to $153.2 million in Q2 2025, down $1.2 million or 1%. First half 2026 net sales were $301.4 million versus $299.7 million in first half 2025, up 1%. Source
Earnings per share fell 22 percent: Second quarter 2026 net EPS were $0.18 versus $0.23 in Q2 2025, a decline of $0.05 or 22%. First half 2026 net EPS were $0.41 versus $0.47 in first half 2025, down 13%. Source
Trade promotions reduced reported sales: Management said higher trade promotion levels to support brands had adverse effects on reported net sales. Trade promotions are accounted for as a reduction to reported sales, creating headwind to reported figures. Source

Timing and Seasonality of Sales

Seasonal sales shifted from Q2 to Q3: Management attributed Q2 and first half adversity to the timing of seasonal sales between Q2 and Q3 2026 compared to prior years' corresponding quarterly periods. This timing shift was the primary driver of the quarterly underperformance. Source
Forward guidance on seasonal dynamics: Management noted the quarter-to-quarter timing shifts had created visibility challenges but emphasized a longer-term focus on brand support and customer relationships despite quarterly volatility. Source
Successful marketing programs in earlier quarter: Q1 2026 benefited from successful marketing and sales programs that contributed to higher sales compared to prior year, demonstrating effectiveness of brand support strategies.

“Second quarter and first half 2026 gross profit margins were adversely affected by significantly higher cocoa and chocolate unit costs, when compared to the corresponding periods in 2025”
Ellen R. Gordon, Chairman

Gross Margins and Input Costs

Cocoa and chocolate costs remain elevated: Q2 and first half 2026 gross profit margins were adversely affected by significantly higher cocoa and chocolate unit costs compared to the corresponding 2025 periods. Cocoa commodity markets have retreated from extraordinarily high 2025 levels but remain above historical norms. Source
Energy and packaging material costs increased: Elevated energy costs contributed to higher freight and delivery expenses. Energy cost inflation also increased costs for resin-based packaging materials and certain other materials and supplies. Source

Pricing Strategy and Cost Management

Limited ability to recover costs through pricing: The company continues to monitor input costs but is mindful of the effects and limits when passing higher costs to customers and final consumers of products, balancing margin needs with competitive positioning. Source
International results deteriorated: Q2 and first half 2026 results were adversely affected by unfavorable international results, which combined with higher input costs and increased marketing expenses created additional pressure on earnings. Source
Brand support remains strategic priority: Management continues to support brands and drive distribution with trade promotions and marketing support activities despite short-term impact on reported sales, maintaining long-term brand investment.

“As these lower costs begin to be reflected in our supply chain costs, we should realize lower cocoa and chocolate costs in second half 2026 and into 2027”
Ellen R. Gordon, Chairman

Capital Investments and Operations

Continuing plant and manufacturing investments: The company is making ongoing investments in plant and manufacturing operations to meet new customer and consumer demands, achieve product quality improvements, expand capacity in certain product lines, and increase operational efficiencies. Source
Long-term value creation focus: Management emphasizes a longer-term perspective and commitment to providing genuine value to consumers through manufacturing improvements and product quality enhancements despite quarterly volatility. Source
Capacity expansion in key product lines: Capital investments target expansion of capacity in certain product lines alongside efforts to achieve quality improvements and enhance overall operational efficiency across manufacturing. Source

Taxes and Investment Income

Effective tax rates varied between periods: Second quarter 2026 effective tax rate was 26.9% compared to 33.1% in Q2 2025. First half 2026 rate was 25.9% versus 27.7% in first half 2025. Changes principally reflect effects of deferred compensation timing. Source
Investment income supported first quarter earnings: Q1 2026 net earnings benefited from increased investment income from the company's investments in marketable securities, which provided some offset to margin pressure from elevated costs. Source
Deferred compensation timing affects tax rates: Changes in effective tax rates between periods principally reflect adverse effects of certain deferred compensation that will not be deductible for income taxes when paid in future periods. Source

Coming up, as management said on 23 July 2026

Cocoa costs expected to decline in H2: Management expects cocoa and chocolate costs to improve as lower commodity prices work through the supply chain in the second half of 2026 and continuing into 2027. Source
Continuing manufacturing capacity investments: The company will continue making investments in plant and manufacturing operations targeting new customer demands, quality improvements, capacity expansion in product lines, and operational efficiencies. Source

In management's words

“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”
Ellen R. Gordon, Chairman

Earlier plans management reported on

On track: Management reiterated commitment to support brands and drive distribution through trade promotions and marketing support activities with increased investment levels. Source
On track: Company continues making investments in plant and manufacturing operations targeting quality improvements, capacity expansion, and operational efficiencies as previously stated. 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, July 22, 2026

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

Second quarter 2026 net sales were $151,943,000 compared to $153,190,000 in second quarter 2025, a decrease of $1,247,000 or 1%. Second quarter 2026 net earnings were $13,347,000 compared to $17,544,000 in second quarter 2025, and net earnings per share were $0.18 and $0.23 in second quarter 2026 and 2025, respectively, a decrease of $0.05 per share or 22%.

First half 2026 net sales were $301,431,000 compared to $299,711,000 in first half 2025, an increase of $1,720,000 or 1%. First half 2026 net earnings were $31,008,000 compared to $35,602,000 in first half 2025, and net earnings per share were $0.41 and $0.47 in first half 2026 and 2025, respectively, a decrease of $0.06 per share or 13%.

Mrs. Gordon said, “Second quarter and first half 2026 were adversely impacted by the timing of sales, including seasonal sales, between second and third quarter 2026 when compared to the prior years’ corresponding quarterly periods. We are focused on the long term and are continuing our higher support levels of our brands with increased trade promotions, as well as advertising. Because trade promotions are accounted for as a reduction in reported net sales, these higher levels of trade promotions had some adverse effects on our reported net sales for second quarter and first half 2026.

In addition to the sales impact of timing between second and third quarter as discussed above, second quarter and first half 2026 gross profit margins were adversely affected by significantly higher cocoa and chocolate unit costs, when compared to the corresponding periods in 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 second half 2026 and into 2027. During second quarter and first half 2026, elevated energy costs also contributed to increases in freight and delivery expenses and higher costs for resin-based packaging materials, as well as certain other materials and supplies. 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. Second quarter and first half 2026 results were also adversely affected by unfavorable international results, increased marketing expenses, and higher professional fees, as well as increased trade promotion and advertising as discussed above.

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 26.9% and 33.1% in second quarter 2026 and 2025, respectively, and 25.9% and 27.7% in first half 2026 and 2025, respectively. The changes in the effective tax rates in the comparative periods principally reflect the effects of changes in 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, the effects of future changes to natural colors, including related higher costs and availability of supply, 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

June 30, 2026 and 2025

	Second Quarter Ended
	2026	2025
Net Sales	$151,943,000	$153,190,000
Net Earnings	$13,347,000	$17,544,000
Net Earnings Per Share*	$0.18	$0.23
Average Shares Outstanding*	75,035,000	75,060,000

	Six Months Ended
	2026	2025
Net Sales	$301,431,000	$299,711,000
Net Earnings	$31,008,000	$35,602,000
Net Earnings Per Share*	$0.41	$0.47
Average Shares Outstanding*	75,046,000	75,105,000

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