The Hershey Co. announced sales and earnings for the third quarter ended Sept. 29, 2013. Highlights include net sales increase 6.1 percent driven by volume and earnings per share-diluted of $1.03 as reported and $1.04 adjusted.
Consolidated net sales were $1,853,886,000 compared with $1,746,709,000 for the third quarter of 2012. Reported net income for the third quarter of 2013 was $232,985,000 or $1.03 per share-diluted, compared with $176,716,000 or $0.77 per share-diluted for the comparable period of 2012.
“Organic sales growth of 6.6 percent this quarter, as has been the case all year, was driven by volume, resulting in solid gross margin expansion and earnings per share-diluted growth,” said John P. Bilbrey, president and chief executive officer, The Hershey Co., in a prepared statement. “Our performance continues to reflect the strategy we outlined over the last year that focuses on investments in our core brands, innovation pipeline and international markets that provide us with the greatest opportunities for growth. Over the remainder of the year, we have many exciting products, promotions, programs and merchandising in place across all channels, and our major customers have indicated their expectations for a solid confectionery holiday season. The fourth quarter will also benefit from the shipments of some select 2014 new products to retailers that will occur in December. Therefore, we expect solid fourth quarter net sales growth that will result in a full-year 2013 net sales increase of about 7 percent, including the impact of foreign currency exchange rates.”
Hershey's third-quarter net sales increased 6.1 percent. Volume was a 6.1 point benefit in the quarter driven by core brand growth and new products in U.S. and key international markets. Net price realization was a 0.5 point benefit and foreign currency exchange rates a 0.5 point headwind.
Hershey’s U.S. candy, mint and gum (CMG) retail takeaway for the 12 weeks ended Oct. 5, 2013, in the expanded all outlet combined plus convenience store channels, which accounts for approximately 90 percent of our U.S. retail business, was up 5.0 percent, resulting in a market share gain of 0.7 points.
Third-quarter adjusted gross margin increased 300 basis points driven by lower commodity costs, supply chain productivity and cost savings initiatives, favorable sales mix and fixed cost absorption from volume gains.