Tootsie Roll Industries, Inc. reported its financial results for the quarter and nine months ended September 30, 2024, reflecting a decline in net product sales and profitability compared to the same periods in 2023.

For the third quarter of 2024, net product sales totaled $223.9 million, a decrease of 9.8% from $248.3 million in Q3 2023. Year-to-date net product sales also fell by 7.7%, from $567.9 million in 2023 to $524.2 million in 2024. The decline in sales was attributed to reduced domestic and foreign sales, with domestic sales representing 91.6% of total consolidated net product sales in Q3 2024.

Total revenue for Q3 2024 was $225.9 million, down from $249.9 million in the prior year. The product gross margin decreased to $75.6 million from $84.2 million, while total gross margin fell from $85.2 million to $77.1 million. Earnings from operations for the quarter were $35.2 million, down from $45.9 million in Q3 2023. Despite the decline in quarterly earnings, year-to-date net earnings increased to $64.3 million from $62.5 million, with earnings per share rising from $0.87 to $0.90.

The company reported a significant increase in cash and cash equivalents, which rose to $91.7 million as of September 30, 2024, compared to $75.9 million at the end of 2023 and $47.3 million a year earlier. This increase was supported by net cash provided by operating activities, which surged to $70.1 million for the nine months ended September 30, 2024, up from $39.6 million in the same period of 2023.

Tootsie Roll's total assets increased to $1.15 billion, up from $1.08 billion at the end of 2023. The company’s total liabilities and shareholders’ equity also rose to $1.15 billion. The current ratio improved to 3.6:1, indicating a stronger liquidity position compared to 3.2:1 a year earlier.

The company experienced a reduction in selling, marketing, and administrative expenses, which decreased to $41.8 million in Q3 2024 from $39.3 million in Q3 2023. However, these expenses as a percentage of net product sales increased slightly.

Tootsie Roll continues to manage market risks associated with fluctuations in ingredient costs, particularly cocoa and chocolate, which have seen significant price increases. The company has established longer-range supply contracts to mitigate these risks.

Overall, Tootsie Roll Industries, Inc. navigated a challenging market environment, with strategic adjustments leading to improved cash flow and a solid liquidity position, despite declines in sales and profitability.