Hershey Announces Third-Quarter Results

Oct. 29, 2014

HERSHEY, Pa.--(BUSINESS WIRE)--The Hershey Company (NYSE: HSY) today announced sales and earnings for the third quarter ended September 28, 2014. Consolidated net sales were $1,961,578,000 compared with $1,853,886,000 for the third quarter of 2013. Reported net income for the third quarter of 2014 was $223,741,000 or $1.00 per share-diluted, compared with $232,985,000 or $1.03 per share-diluted for the comparable period of 2013.

Third-quarter net sales increased 5.8 percent driven primarily by volume. North America net sales increased 4.2 percent driven by strong Halloween seasonal growth and new products. International net sales increased 18.4 percent, slightly less than estimates. Foreign currency exchange rates were a 0.2 point headwind.

Hershey’s U.S. candy, mint and gum (CMG) retail takeaway for the 12 weeks ended October 4, 2014, in the expanded all outlet combined plus convenience store channels (xAOC+C-store), which accounts for approximately 90 percent of the company’s U.S. retail business, was up 3.3 percent, resulting in a market share gain of 0.5 points. For the year-to-date period ended October 4, 2014, Hershey’s U.S. market share was an industry-leading 31.2 percent, up 0.2 points. In addition, Hershey’s Spreads are not included in the CMG database as Nielsen captures this within grocery items.

Third-quarter adjusted gross margin declined 240 basis points. As previously discussed, input cost inflation, primarily dairy, has pressured gross margin all year. Dairy remained at elevated levels throughout the third quarter and negatively impacted profitability. Additionally, unfavorable sales mix and other supply chain costs more than offset productivity and cost savings initiatives. Selling and administrative expenses declined about 1 percent in the third quarter while advertising and related consumer marketing expense increased 1 percent versus the prior period. Full report.

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