It sounds like Twinkie the Kid's been having some problems lassoing up consumers. Interstate Bakeries
Interstate Bakeries now expects a third-quarter loss of $0.08 to $0.12 per share, including $0.02 per share in restructuring charges, with quarterly sales down about 2.5%. Analysts had been anticipating earnings to come in at $0.13 per share.
The writing was pretty much on the wall as far back as September. Though Interstate beat estimates then, profits were down 59%, and the company said it planned to cut jobs and close plants to boost profits. In December, the company reported disappointing sales across its product categories.
For months, there have been clear trends at work, including loads of competition from companies like Sara Lee
While Interstate's announcement was short (can't say it was sweet), it didn't give a specific reason for the unexpected loss. However, it's not too hard to imagine that crazes like the Atkins and South Beach diets have taken a toll on Interstate.
The products Interstate's known for include the Hostess line of snack cakes -- including Twinkies, Ho Ho's, and Snowballs -- and Wonder Bread. Of course, breads and sweets are Public Enemy No. 1 to Atkins dieters, and Interstate's behind the times, since it's still working on a low-carb bread offering.
Upcoming woes could include snack-food taxes. That idea's being putted around as a way to fatten up state coffers while giving citizens an economic incentive to cut out the fatty foods.
On last check, Interstate's shares had fallen 10% to $14.01. Right now, it's hard to see the bright spots when signs point to Interstate becoming a victim of the times.
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Alyce Lomax does not own shares of any of the companies mentioned. She will partake of an occasional Zinger, though she'd prefer a fresh, hot Krispy Kreme any day.
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