Back in January, things got a little sticky for Wm.Wrigley Jr.
Wrigley's No. 1 in gum, which is probably no surprise judging by childhood favorites such as Wrigley's Spearmint and Doublemint (nor will it surprise most of us that it's got dibs on the URL bubblegum.com). Other well-known Wrigley brands include Big Red, Eclipse, and Orbit.
In the second quarter, Wrigley's earnings increased 11% to $139 million, or $0.62 per share. Sales gained 21% to $958 million, though that rather steep increase related to Wrigley's recent acquisition of Joyco. It might bode well for investors to watch the company's consolidated gross margins, which dipped to 56.4% in both the first and second quarters, which the company linked to the Joyco acquisition as well as higher costs associated with new products.
The effects of foreign currency benefits -- the weak dollar overseas -- helped boost Wrigley's fortunes by $0.03 per share. As longtime Fool contributor Rick Munarriz mentioned in January, that's a fairly common angle to Wrigley's earnings picture.
Although the weak dollar may have pumped up Wrigley's fortunes somewhat, it has not been a lost point here at the Fool that stocks such as Wrigley, despite the sugar shock, are sometimes good for investors. After all, gum is a popular item that tends to do well regardless of economic trends, judging by the fact that it's a treat that's not too hard on the pocketbook and therefore easily justifiable in the checkout line.
Also, Wrigley keeps on paying investors -- it pays out a dividend, which is one of the criteria that Mathew Emmert's Motley Fool Income Investor newsletter searches out for investors who are looking to double their fun.
Despite it all, though, Wrigley shares continue to trade at about 27 times forward earnings. When it comes to the stocks that vie for your sweet tooth, Hershey
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Alyce Lomax does not own shares of any of the companies mentioned. Wrigley recently announced that it plans to reintroduce Hubba Bubba, a bubble gum sensation from her childhood.