Topps, the US maker of Bazooka gum, posted an increase in quarterly profit yesterday (1 May) despite a decline in the profitability of its confectionery business.
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Topps, which is being bought by an investment firm headed by former Walt Disney boss Michael Eisner, booked fourth-quarter net income of US$2.3m, up from a net loss of $833,000, a year ago. The company said its results were boosted by strong sales from its sports cards business and the absence of a restructuring charge that hurt earnings in the forth quarter of last year.
Arthur T. Shorin, chairman and CEO of Topps, commented: “This represents our fourth consecutive quarter of improved performance. Confectionery, however, remains more of a challenge, experiencing margin pressure and continued weakness in some of our core products.”
In its confectionery segment, net sales rose 8.7% to $33.2m. Topps attributed this rise to the one-time sale of inventory to a new Canadian distributor and the initial sell-in of Vertigo in the US.
Worldwide expansion of Juicy Drop Pops and increased sales of Mega Mouth Spray in Europe offset US declines, the company said.
However, confectionery earnings declined in the fourth quarter, driven by a 3.4% drop in margins due to higher costs on sales to the Far East and increased marketing and trade spending.
