CHICAGO — The closing of certain channels where its products are sold led to lower earnings and sales at Tootsie Roll Industries, Inc. in the third quarter.
Net income in the third quarter ended Sept. 30 totaled $24.67 million, equal to 37¢ per share on the common stock, down 17% from $29.85 million, or 44¢ per share, in the same period a year ago.
Net sales decreased 14% to $156.96 million from $181.91 million.
“Third-quarter sales were adversely impacted by the effects of the COVID-19 pandemic, including mandates and public health guidelines issued by state, local, federal and foreign governments and agencies,” said Ellen R. Gordon, chair of Tootsie Roll. “The ‘closing’ of the economy in the second quarter, and its gradual ‘reopening’ in the later part of the second quarter and third quarter, has curtailed and at times completely closed certain channels of trade where the company has historically sold its products.”
Ms. Gordon said the changes in consumer lifestyles, shopping habits and daily work routines as a result of the pandemic have hit Tootsie Roll hard, eliminating some of the impulse purchasing opportunities for its products.
“Many of the company’s products are consumed at group events, outings and other gatherings that have been significantly curtailed or in some cases eliminated due to possible infection or spreading of COVID-19,” she said.
Despite the lower earnings and sales, Ms. Gordon said Tootsie Roll is well positioned to return to higher sales and profits when the adverse effects of the COVID-19 pandemic subside.
“We are focused on the longer term and therefore are continuing to make investments in plant manufacturing operations to meet new consumer and customer demands, achieve product quality improvements, increase operational efficiencies and provide genuine value to consumers,” she said.