Hostess Brands Inc. has named Travis Leonard, 49, as its CFO. He will succeed Michael Gernigin, who has been interim acting CFO since November, when then CFO Brian Purcell resigned.
Leonard has most recently worked in several positions at Cardinal Health, a drug and medical supplies company, including as senior vice president and CFO of the company’s medical segment, and previously served in several finance and corporate audit roles at Cargill. Earlier he spent nearly 14 years in a variety of roles at Kraft Foods, including as director of finance procurement.
- While Purcell's departure from Hostess last year was "unexpected … we're happy to see they’ve found a very competent person in Travis Leonard to step into the role and we think that he has a good resume and should be able to help Hostess fulfill its growth aspirations,” said Rebecca Scheuneman, an equity analyst at Morningstar.
Leonard will take the finance helm of the sweet snack purveyor that has a portfolio stocked with many iconic products ranging from Twinkies to Ding Dongs to Donettes.
Under the announced transition plan, Leonard will join the company on May 11 and Gernigin, who has been acting in the role, will remain with the company as chief accounting officer, reporting to Leonard. Hostess CEO Andy Callahan, who like Leonard also worked for more than a decade at food giant Kraft Foods, said Leonard’s expertise will help the company continue to build a “snacking powerhouse and achieve cross-channel growth.”
Leonard's move to Hostess is also notable because he is one of a growing — albeit still small — number of Black executives in top finance seats at public companies. Last year the number of Black CFOs nearly doubled off a low base from 12 to 20 (2.9%) of 678 sitting CFOs at Fortune 500 and S&P 500 companies, according to a report from Crist-Kolder.
In response to a question as to whether the company has sought to increase diversity in its executive ranks, Hostess in an emailed response stated, “From our bakeries to our executive team, Hostess Brands is always seeking the best candidates for the job. It also is important for us to ensure our workforce reflects the communities we serve to allow us to continue delivering the products and strategic thinking that meet our stakeholders’ needs and help us drive our business forward.”
Separately, while many food companies are grappling with rising costs, Scheuneman believes Hostess’ strong pricing power should enable it to combat inflation even as consumers are broadly starting to shift away from some branded products to save money amid soaring inflation. In spite of the headwinds, she expects Hostess can increase its long-term operating margins to the 19%-20% area from 18.2% in 2021.
Inflation “shouldn’t impact Hostess too much first because their brand is very strong and second because there’s not a huge amount of private label products in their category,” she said.
The company weathered the early pandemic in part by offsetting declines in convenience store sales with strong sales in grocery stores, Scheuneman said. Looking ahead Scheuneman says Hostess is currently shifting its priorities to mergers and acquisitions after successfully focusing on debt reduction. The company is also growing through developing new products, such as the recently launched Hostess Boost Jumbo Donettes, donuts that contain caffeine.
Leonard’s employment agreement with the company includes an initial annual base salary of $450,000, a target cash bonus at 75% of his base salary, a sign-on equity award in the form of a one-time grant of restricted stock units with a grant date value of $300,000, and a $250,000 sign-on bonus, according to an SEC filing.