Tootsie Roll Industries (TR) investor relations material

Executive summary

• Net product sales increased 3.0% year-over-year to $230.6 million in Q3 2025 and 1.2% to $530.3 million for the nine months ended September 30, 2025, driven by higher domestic sales and successful marketing programs, though foreign sales declined.

• Net earnings attributable to shareholders rose 8.6% year-over-year to $35.7 million in Q3 and 10.8% to $71.3 million for the nine months, with EPS up 8.9% and 12.6% respectively.

• Gross margin improved due to higher price realization, manufacturing efficiencies, and cost reductions, despite elevated input costs, especially for cocoa and chocolate.

• Marketing and pre-Halloween sales programs drove third quarter growth, while price resistance affected nine-month results.

Financial highlights

• Q3 2025 total revenue was $232.7 million, up from $225.9 million in Q3 2024; nine-month revenue reached $536.2 million.

• Q3 gross margin was $79.4 million (34.1% of revenue), up from $77.1 million; nine-month gross margin was $188.3 million.

• Operating income for Q3 was $32.4 million, down from $35.2 million; nine-month operating income was $67.5 million, up from $61.8 million.

• Other income, net, increased to $16.2 million in Q3 (from $7.2 million) and $30.3 million for nine months (from $21.1 million), reflecting higher investment income and out-of-period bond accretion adjustments.

• Effective tax rate increased to 26.7% in Q3 2025 from 22.6% in Q3 2024; nine months rate rose to 27.2% from 22.4%.

Outlook and guidance

• Management expects continued margin pressure from elevated cocoa and chocolate costs into Q4 2025 and 2026 as older supply contracts expire.

• Plant expansion is planned over the next five years, with $75–85 million in capital expenditures, mostly in 2026–2027, to meet higher demand and improve efficiency.

• Company remains focused on long-term investments in manufacturing and operational efficiency.