Tootsie Roll Industries (TR) Q2 2025 earnings summary

Executive summary

• Net product sales rose 2.9% to $153.2M in Q2 2025 year-over-year, with net earnings up 12.2% to $17.5M and EPS up 14.3% to $0.24, while H1 sales dipped 0.2% to $299.7M but net earnings increased 13.1% to $35.6M and EPS rose 14.0% to $0.49.

• Adjusted operating earnings grew 28.2% in Q2 and 16.8% in H1 2025, driven by improved gross margins and cost controls.

• Higher Q2 sales attributed to successful marketing and sales programs, while H1 faced resistance to price increases.

• Share repurchases reduced shares outstanding, boosting EPS.

Financial highlights

• Q2 2025 total revenue: $155.1M; H1 2025: $303.5M.

• Q2 gross margin improved to $56.5M from $50.5M year-over-year; H1 gross margin rose to $108.9M from $100.5M.

• Adjusted product cost of goods sold as % of sales decreased to 63.8% in Q2 2025 from 66.9% in Q2 2024.

• Other income, net, was $14.1M in Q2 2025, up from $4.9M in Q2 2024, reflecting higher investment income and insurance recovery.

• EPS for Q2 2025: $0.24 vs. $0.21; H1 2025: $0.49 vs. $0.43.

Outlook and guidance

• Management expects higher cocoa and chocolate costs to pressure margins in H2 2025 and 2026 as new supply contracts at elevated prices take effect.

• Company remains cautious about passing on further cost increases to customers due to consumer resistance.

• Plant expansion planned over five years, with $95M–$100M in capital expenditures, mostly in 2026–2027, funded by internal cash flow.

• Ongoing investments in manufacturing to meet demand and improve efficiencies.