Hershey, PA — The Hershey Co. reports it earned $168.2 million in second-quarter profits this year compared with $159.5 million for the same period in 2013, and net sales rose by 4.6 percent, driven by volume and solid Easter sales.
However, as a result of rising costs, net sales for the entire year are projected to reach between five and seven percent, skewing toward the lower side of the range. Likewise, adjusted earnings are forecasted to approach nine to 11 percent but are likely to finish out near the low end.
Net U.S. sales for the quarter grew 4.4 percent — less than anticipated — hampered by increased activity in other snack categories, according to President and CEO John P. Bilbrey, who announced the company’s Q2 results.
Bilbrey notes: “Second quarter net sales sequentially improved as expected, versus the first quarter, and we continue to make progress against the initiatives that will drive strong results for the remainder of the year.” Noting the company gained 1.1 market share points from Easter sales, he adds Hershey anticipates seasonal momentum to continue, fueled by strong retail customer orders for Halloween, Chanukah and Christmas.
New products accounted for 60 percent of overall volume growth; core brands contributed about 40 percent of net sales, although higher-than-expected foreign currency exchange rates of 0.7 percent bit into profits.
Alluding to the recent announcement of an eight percent price increase, Bilbrey says the company plans to support category growth through merchandising, programming and innovation. “These initiatives, as well as normal productivity and cost saving programs will enable us to continue to invest in brand building that we expect will drive growth for the long term.”