Hershey, PA — While its first quarter results were slightly below expectations, The Hershey Co. is still anticipating five to seven percent net sales growth for 2014, driven by core brand volume increases and innovations.
Net sales for the first quarter were up 2.4 percent for the quarter. Company President and CEO John Bilbrey notes organic sales in the quarter were pressured by softness in Latin American markets, distribution gains for the Brookside brand made during the period in 2013 and the timing of more “meaningful innovations later this year.”
In addition, he says U.S. retail trends varied and were impacted by lower consumer trips in the instant consumable channels and irregular purchasing patterns within food and mass sectors.
“However, toward the end of the first quarter, consumer trends began to normalize and, while preliminary, April Nielsen data indicate a good sell through for the Easter season and a sequential improvement in non-seasonal candy,” Bilbrey says.
Looking toward the remainder of the year, the company reports net sales will be accelerated by core brands and innovation. “Our new product pipeline is robust,” he says, continuing: “Net sales will be driven by core brand volume growth and innovation such as York Minis, Hershey’s Spreads, Lancaster Soft Crèmes Caramels and Brookside Crunchy Clusters in the U.S.”
He explained that the Lancaster brand’s rollout has been successful and is tracking close to where the Brookside brand was at during this stage of its introduction. Hershey’s Kisses Deluxe in the Chinese market along with further rollout of the Reese’s brand in Mexico, Brazil and China during the second half of this year are also anticipated to help the company meet its net sales goals for the year.