Walmart customers eating up Twinkies, Ding Dongs

Hostess Brands is on the cusp of celebrating a sweet anniversary, 100 years in business which includes bouncing back from bankruptcy.

CEO Andy Callahan tells FOX Business the company has been relaunched while also maintaining its roots.

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"We have the entrepreneurial spirit of a new team and the iconic brand of 100 years," he said during an interview on Varney & Co.

And it is paying off at the world's largest retailer. FOX Business recently reported that Walmart customers have a sweet tooth when it comes to Twinkies and other Hostess Brand snacks, according to one top Wall Street firm.

Hostess’ “sweet baked goods” segment, which includes Twinkies, Ding Dongs and other iconic snacks, earned a record $52 million in sales in the first quarter of 2019, according to an analysis by JP Morgan. Sales at Walmart and Sam’s Club amounted for 23 percent of all revenue from the category.

JP Morgan added Hostess Brands to its “Analyst Focus List” and raised its December 2019 price target for the company’s stock to $16, up $2 from its previous level. The Twinkie maker is also “gaining meaningful business in non-measured channels,” the firm said.

“In our follow-up call with the company, management seemed to indicate that its recovery with a large customer (Walmart, surely) was merely on track. This may be conservative,” JP Morgan analysts said in a research note.

There are also signs that Hostess is expanding beyond its usual retail partners. Demand outside retailers in the food, pharmacy and convenience store sectors “accelerated greatly” early this quarter, the note added.

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Hostess reported better-than-expected earnings and revenue on Thursday, including a total of $212.9 million in the sweet baked goods category. The company went public in 2016, years after it was forced to liquidate amid plunging sales for Twinkies and other brands.

"We are a growing company....we are making a profit" Callahan noted on Tuesday.

*This article was originally published on 5/9/19 and updated on 5/14/19.