Hershey Announces 6.7 Percent Net Sales Increase In Second Quarter 2013

The Hershey Co. announced sales and earnings for the second quarter ended June 30, 2013. Consolidated net sales were $1,508,514,000 compared with $1,414,444,000 for the second quarter of 2012. Reported net income for the second quarter of 2013 was $159,504,000 or $0.70 per share-diluted, compared with $135,685,000 or $0.59 per share-diluted for the comparable period of 2012.

“We delivered another quarter of strong sales and earnings growth driven by solid core brand and new product performance,” said John P. Bilbrey, president and chief executive officer, The Hershey Co., in a prepared statement. “Our intellectual capital and Insights Driven Performance program initiatives continue to provide us with a competitive advantage in the marketplace. The marketing and sales teams are working collaboratively against the same goal of winning in the marketplace. This has resulted in solid in-store execution related to core brand merchandising and programming as well as new product distribution. Combined with supply chain efficiencies, we have the financial flexibility to invest in our greatest opportunities to drive global growth and deliver on our objectives.”

For the second quarter of 2013, these results, prepared in accordance with U.S. generally accepted accounting principles (GAAP), included net pre-tax charges of $6.6 million or $0.02 per share-diluted. These charges included $3.6 million or $0.01 per share-diluted related to the Project Next Century program, non-service-related pension expense (NSRPE) of $2.8 million or $0.01 per share-diluted, and acquisition and integration costs of $0.2 million. Reported gross margin of 47.6 percent increased 390 basis points versus last year, while reported income before interest and income taxes (EBIT) increased 21.0 percent, generating EBIT margin of 17.8 percent, an increase of 210 basis points versus 2012. For the second quarter of 2012, results included Project Next Century pre-tax charges of $19.0 million or $0.05 per share-diluted, acquisition and integration costs of $1.3 million or $0.01 per share-diluted as well as NSRPE of $4.5 million or $0.01 per share-diluted. Adjusted net income, which excludes these net charges, was $163,607,000 or $0.72 per share-diluted in the second quarter of 2013, compared with $151,493,000 or $0.66 per share-diluted in the second quarter of 2012, an increase of 9.1 percent in adjusted earnings per share-diluted.

For the first six months of 2013, consolidated net sales were $3,335,940,000 compared with $3,146,508,000 for the first six months of 2012. Reported net income for the first six months of 2013 was $401,410,000 or $1.77 per share-diluted compared with $334,336,000 or $1.46 per share-diluted, for the first six months of 2012.

For the first six months of 2013 and 2012, these results, prepared in accordance with GAAP, included net pre-tax charges of $17.2 million and $58.5 million or $0.04 and $0.16 per share-diluted, respectively. Charges associated with the Project Next Century program for the first six months in 2013 and 2012 were $10.6 million and $42.6 million or $0.03 and $0.12 per share-diluted, respectively. NSRPE for the first six months in 2013 and 2012 were $5.6 million and $8.7 million or $0.01 and $0.02 per share-diluted, respectively. Additionally, for the first six months in 2013, acquisition and integration costs were $1.0 million and in 2012, $7.2 million or $0.02 per share-diluted, respectively. As described in the Note, adjusted net income for the first six months of 2013, which excludes these net charges, was $412,075,000 or $1.81 per share-diluted, compared with $371,403,000 or $1.62 per share-diluted in 2012, an increase of 11.7 percent in adjusted earnings per share-diluted.

For the full year 2013, the company expects reported earnings per share-diluted of $3.60 to $3.65. This projection, prepared in accordance with GAAP, assumes business realignment charges and NSRPE costs of $0.06 to $0.08 per share-diluted. Charges associated with the Project Next Century program are expected to be $0.03 to $0.05 per share-diluted, while NSRPE is expected to be $0.03 per share-diluted. Despite the impact of these charges in 2013, reported gross margin is expected to increase 300 to 310 basis points.

Loading