Shares of Hostess Brands Pop 11% After Strong Fourth Quarter

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What happened?

Shares of Hostess Brands, Inc. (NASDAQ: TWNK), a company focused on manufacturing, marketing, and selling a range of snack cakes, doughnuts, and related sweet baked goods, were up 11% as of 11:50 a.m. EST. This came after the company posted better than expected fourth-quarter earnings.

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So what

Starting from the top: Hostess' net revenue climbed 9.7% to $196.2 million. That was driven by a strong 8.2% point-of-sale increase across the top seven brands; those seven brands drive almost 75% of net revenue. Adjusted earnings per share checked in with a 13.3% gain to $0.17. The results topped analysts' estimates calling for adjusted earnings of $0.14 per share, on revenue of $194 million.

"We are pleased with our strong finish to the year," commented Bill Toler, president and CEO of Hostess, in a press release. "We were able to capitalize on the momentum provided by our robust product innovation and continued distribution gains to increase our market share. We are optimistic about the continued growth opportunity from our product innovation, including our Hostess Bakery Petites platform and the new breakfast opportunities from our acquisition of the Big Texas and Cloverhill brands."

Now what

This was a great quarterly result for Hostess investors. Not only did the company top estimates, but it did so in the face of healthier eating trends in America -- giving investors confidence the company can continue to innovate new products, such as its Bakery Petites snacks, to grow revenue. As management continues to make acquisitions and expand its distribution, upside remains for investors, too.

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Daniel Miller has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.