HERSHEY, Pa.--(BUSINESS WIRE)-- The Hershey Company today announced sales and earnings for the third quarter ended October 4, 2015. Consolidated net sales were $1,960.8 million compared with $1,961.6 million for the third quarter of 2014. Reported net income for the third quarter of 2015 was $154.8 million or $0.70 per share-diluted, compared with $223.7 million or $1.00 per share-diluted for the comparable period of 2014.
Third-Quarter Performance
Consolidated net sales were $1,960.8 million in the third quarter, in line with the third quarter of 2014. Excluding the effect of foreign currency translation, which was greater than estimates and a 2.0 point headwind, net sales increased 2.0% versus the year ago period. Price realization, primarily in the U.S., was a 5.8 point benefit. Volume was off 4.3 points due primarily to elasticity related to the previously announced price increase and lower sales in China. Net acquisitions and divestitures were a 0.5 point benefit. North America net sales were below expectations due to the aforementioned lower consumer trips and a decline of in-store merchandising and programming at some retailers. International and Other net sales, excluding the benefit of the Shanghai Golden Monkey (SGM) acquisition and unfavorable foreign currency exchange rates, declined versus a year ago due primarily to the underperformance of Hershey’s chocolate business in China.
Adjusted gross margin was 46.0% in the third quarter of 2015, compared to 43.8% in the third quarter of 2014. The 220 basis point increase was driven by net price realization, supply chain productivity and costs savings initiatives, partially offset by higher commodity costs and unfavorable sales mix.
Total advertising and related consumer marketing expense was in line with the year ago period as increases in North America were offset by planned reductions in international spending. Selling, marketing and administrative (SM&A) expenses, excluding advertising and related consumer marketing, increased about 2.8%. Excluding the SGM, Krave and Allan Candy acquisitions and the Mauna Loa divestiture, SM&A expenses excluding advertising and related consumer marketing declined 2.8% versus the year ago period. Consolidated adjusted operating profit increased 9.1% to $414.9 million in the third quarter of 2015, compared to $380.4 million in the third quarter of 2014. Full report.
