- Hostess Brands reported pro forma combined net revenue of $727.6 million in its fiscal 2016 year, an increase of $106.8 million from 2015, the company said in a press release. Pro forma combined earnings per share on a fully diluted basis were $0.54 per share.
- The company said revenue growth last year was due largely to new product launches including its Deep Fried Twinkies, Hostess Sweet Shop brownies and the relaunch of Suzy Qs, as well as its purchase of Superior Cake Products. Bill Toler, president and chief executive officer of Hostess Brands, told The Wall Street Journal the company's market share has grown to 16.7% of the market for packaged sweet baked goods.
- “Our financial performance this year benefited from increased distribution and product innovation initiatives as well as continuing to build market share on our core products,” Toler said in a statement. “We continue to feel confident with our momentum heading into 2017.”
Following an eight-month absence from the marketplace after the company went bankrupt and liquidated, Hostess relaunched in 2013 around its Twinkie and CupCakes brands. Recently, the company tapped into these well-known brands for growth, a common trend throughout the food industry. In just the last year alone, the company has introduced or announced plans for a Twinkies Cappuccino for the convenience store channel, a line of collaborative ice cream products under Hostess brands and Deep Fried Twinkies found exclusively at Wal-Mart.
Hostess, which completed its IPO last November, has been posting strong growth since it emerged from bankruptcy. It has thrived from extended product shelf life and a change to a warehouse-centered supply chain rather than direct-store delivery, which allows the manufacturer to invest in other areas of the business. While important, those changes will likely only offer short-term benefits. The company's future lies in its ability to roll out new products.
As the company noted in its earnings release, it benefited from building market share in its core brands— evidenced by its move into new markets like frozen foods. For the company to maintain its high margins and grab market share, it will need to further leverage its brands while acquiring others to add to its portfolio. Meanwhile, it could face similar challenges plaguing other food makers as consumers move away from sugary foods and drinks. As the glow of its IPO and financial boosts following its emergence from bankruptcy wear off, the challenges could become more noticeable at Hostess even as shoppers purchase its sweet snacks.