Oct 28, 2016
Hershey beats estimates on higher U.S. demand
Reuters
Hershey Co (HSY.N), the maker of Hershey's Kisses and Reese's Peanut Butter Cups, reported a better-than-expected quarterly profit as demand strengthened in the U.S. and the company spent less on advertising and marketing.
Hershey's net sales in North America, which account for about 85 per cent of total sales, rose 1.8 per cent to US$1.76 billion in the third quarter ended Oct. 2.
Shares of the company, which is based out of its namesake town in Pennsylvania, were up 2 per cent at US$97.42 in pre-market trading on Friday.
The company, which rejected a US$23 billion buyout offer from Mondelez International Inc in June, said in July it would cut costs by consolidating its supply chain and some factories in China and North America, as well as spending less on advertising.
Hershey is also set to undergo a management overhaul, with chief executive John Bilbrey retiring next year and Hershey's controlling charitable trust reaching a major reform agreement with its overseer, the Pennsylvania attorney general's office, following a months-long investigation.
The trust, whose consent is key for any change in the company's ownership, came in the spotlight earlier this year following its rejection of Mondelez's offer.
Hershey's net income rose to US$227.4 million, or US$1.06 per share, in the quarter, from US$154.8 million, or 70 cents US per share, a year earlier.
The company's costs fell 1.7 per cent to US$1.63 billion. Its year-ago quarter included a US$31-million goodwill impairment charge related to its acquisition of Chinese candy maker Shanghai Golden Monkey.
Excluding items, Hershey earned US$1.29 per share, beating the average analyst estimate of US$1.18 per share, according to Thomson Reuters I/B/E/S.
Net sales rose 2.2 per cent to US$2 billion, in line with analysts' average estimate and marking the second straight rise in quarterly sales after four quarters of no growth.
Hershey raised its 2016 adjusted earnings forecast to US$4.28-$4.32 per share from US$4.24-$4.28, citing cost savings and a slightly more favorable tax rate than expected.
The company's stock had risen 7 per cent this year till Thursday's close, but is down 1.6 per cent since it declined Mondelez's offer.
Hershey's net sales in North America, which account for about 85 per cent of total sales, rose 1.8 per cent to US$1.76 billion in the third quarter ended Oct. 2.
Shares of the company, which is based out of its namesake town in Pennsylvania, were up 2 per cent at US$97.42 in pre-market trading on Friday.
The company, which rejected a US$23 billion buyout offer from Mondelez International Inc in June, said in July it would cut costs by consolidating its supply chain and some factories in China and North America, as well as spending less on advertising.
Hershey is also set to undergo a management overhaul, with chief executive John Bilbrey retiring next year and Hershey's controlling charitable trust reaching a major reform agreement with its overseer, the Pennsylvania attorney general's office, following a months-long investigation.
The trust, whose consent is key for any change in the company's ownership, came in the spotlight earlier this year following its rejection of Mondelez's offer.
Hershey's net income rose to US$227.4 million, or US$1.06 per share, in the quarter, from US$154.8 million, or 70 cents US per share, a year earlier.
The company's costs fell 1.7 per cent to US$1.63 billion. Its year-ago quarter included a US$31-million goodwill impairment charge related to its acquisition of Chinese candy maker Shanghai Golden Monkey.
Excluding items, Hershey earned US$1.29 per share, beating the average analyst estimate of US$1.18 per share, according to Thomson Reuters I/B/E/S.
Net sales rose 2.2 per cent to US$2 billion, in line with analysts' average estimate and marking the second straight rise in quarterly sales after four quarters of no growth.
Hershey raised its 2016 adjusted earnings forecast to US$4.28-$4.32 per share from US$4.24-$4.28, citing cost savings and a slightly more favorable tax rate than expected.
The company's stock had risen 7 per cent this year till Thursday's close, but is down 1.6 per cent since it declined Mondelez's offer.
