Coronavirus outbreak may have unleashed panic buying of Hostess Twinkies and Ding Dongs

Alongside those coronavirus prep bags being filled by shoppers with bleach and hand sanitizer may be boxes of long shelf life Twinkies and Ding Dongs.

“We are seeing that,” Hostess Brands CEO Andy Callahan said on Yahoo Finance’s On the Move, when asked if he is seeing a bump in business as people stock up, should they be trapped at home due to the coronavirus outbreak.

Added Callahan, “We are benefiting likely in the short-term due to traffic. That’s the great thing about Hostess, we are there to celebrate things. We are there to comfort things. So we are seeing a slight uptick in traffic. It’s too early to tell, a lot of our point of sale data lags.”

Even without the bump in business, Hostess has been doing just fine.

Fourth quarter sales rose 6.7% from the prior year to $216.7 million on the back of momentum for breakfast items such as Donettes. Adjusted operating profits increased 6.3% year-over-year to $52.4 million.

PICO RIVERA, CA - JULY 15:  Hostess Twinkie snack cakes and Donettes are on display at a store July 15, 2013 in Pico Rivera, California. Twinkies returned to store shelves after Hostess filed for Chapter 11 bankruptcy late last year, after years of management turmoil and a standoff with its second-biggest union. The company sold off its various brands, with Twinkies and other Hostess cakes going to private equity firms Apollo Global Management and Metropoulos & Co.  (Photo by Kevork Djansezian/Getty Images)
Hostess Twinkie snack cakes and Donettes are on display at a store.. (Photo by Kevork Djansezian/Getty Images)

Hostess shares are up 8% over the past year, outperforming the Dow’s slight gain and the S&P’s 500 7.5% gain. Since joining Hostess as CEO in 2018, Callahan has looked to streamline the business, ramp up product innovation. He also pulled the trigger on the $320 million acquisition of cookie maker Voortman.

“Hostess has been increasingly improving its base for improved go-forward revenue growth — first, with Metropoulos & Co. and Apollo out of bankruptcy; and now, with Andy Callahan as CEO. We’re simply in late stage two of an operational turnaround, which we like,” wrote Jefferies analyst Rob Dickerson in a note to clients.

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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