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COVID-19 economy: Hostess sees jumbo donuts fly off the shelves as pandemic rages on

Brian Sozzi
·Editor-at-Large
·2 min read

The 2020 sweet treat snacking craze among quarantined U.S. consumers is showing no signs of letting up. In fact, it may be reaccelerating as people venture back indoors amid COVID-19 infections returning in force.

“We did see a [stock-up] surge during the pandemic, but what we have seen getting into phase two is more a continuation of maybe at a higher rate of continued behavior where consumers either look to treat or reward themselves and Hostess is a great option,” Hostess Brands CEO Andy Callahan said on Yahoo Finance Live. “We’re seeing that continue and actually accelerate with the number of households and in repeat purchases.”

Hostess Brands’ latest earnings report backs up those claims as products such as Jumbo Donettes and Cream Cheese Coffee Cakes appeared to fly off the shelves.

Hostess is selling a lot of Twinkies during the pandemic.
Hostess is selling a lot of Twinkies during the pandemic.

Third-quarter sales rose 18.5% from the prior year to $260.9 million on the back of momentum for those aforementioned breakfast snacks. Adjusted operating profits increased 29.2% year-over-year to $60.2 million.

Executives told analysts on an earnings call that Hostess-branded breakfast sales have surged 14.3% over the past 13 weeks. Original Donette sales are up 14.5%, coffee cake sales are up 29.3% and single-serve Jumbo Donette sales have skyrocketed 45%.

Hostess is feeling so confident in the sustainability of the snacking craze — and full pipeline of innovation such as Super Grain Cookies — it announced a new $100 million stock buyback plan.

Says Callahan, “I don’t expect the indulgent trend to really slow down. It has been sustainable. It has been steady. It has happened before the pandemic. It has happened after the pandemic. So I don’t expect it to change. We’re not looking for over-indulgence. We are looking for an appropriate one occasion, reward yourself behavior as part of a balanced diet.”

Brian Sozzi is an editor-at-large and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.

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