Yahoo Finance Everyone is reaching for a Twinkie again at stores as people begin venturing out post-COVID-19 crisis
Hostess donuts, cupcakes and Twinkies are still flying off the shelves at supermarkets to comfort a mostly quarantined and worried United States.
But for the first time in a while, Hostess sales at convenience stores have started to pick up as people venture back out into the wild for work. The return of those single-serve sales is good news for Hostess Brands (TWNK), seeing as it represents a sizable high margin business for the sweet snacks giant. It’s probably a nice sign for the U.S. economy, too, that yes — it’s kicking back into gear at long last.
“Our individual impulse purchases had been down [during the worst of the pandemic]. But we’re starting to see that come back over the last several weeks. Think about convenience stores, that’s about a third of our business. We saw a decline and then a comeback. The traditional grocery stores, dollar stores, larger stores those eat-at-home occasions we saw a larger increase. We’re starting to see a sustained increased in those stores, but really starting to see the single serve and convenience stores starting to improve over the last several weeks,” said Hostess Brands CEO Andy Callahan on Yahoo Finance’s The First Trade.
Hostess is fresh off a better than expected first quarter as consumers stocked their pantries with shelf stable foods as the health crisis took hold.
The company’s overall sales rose 14.4%, boosted by gains in its sweet baked goods segment and the recent acquisition of cookie maker Voortman. Adjusted operating profits rose 6.4% from the prior year.
“We still view the company’s robust top-line growth profile, Voortman accretion upside, and sustainable margin improvement opportunities all attractive at the current market valuation,” wrote Jefferies food analyst Rob Dickerson.
If you are wondering what Hostess is selling the most of right now, it’s not the iconic Twinkie. “Our number one product and the number one selling cupcake in America — is our cupcake,” says Callahan.
Brian Sozzi is an editor-at-large and co-anchor of The First Trade at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.
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